FRIDAY, 21 JUNE 2002 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 09:03.

The 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.

    SUSPENSION OF COMMENCEMENT OF CROSSING-THE-FLOOR LEGISLATION

                           (Announcement)

The SPEAKER: Order! Hon members, you may already be aware of this, but I wish to advise you that due to an application granted by the court last night, the window period, as we call it, is not operational. So the previous advice I had given members not to complete forms until such time as we hear what the decision of the full bench later this morning is, still holds. We will make an announcement.

I would advise members and parties to ensure that forms are not completed until such time as there is a decision from the court.

                             NEW MEMBER

                           (Announcement)

The Speaker announced that the vacancy caused by the resignation of Mr M C J van Schalkwyk had been filled, in accordance with item 6(3) of Schedule 6 of the Constitution, 1996, by the nomination of Dr R T Rhoda with effect from 20 June 2002.

                                OATH

Dr R T Rhoda, accompanied by Mr J J Dowry, made and subscribed the oath and took his seat.

                          NOTICES OF MOTION

Mr L T LANDERS: Madam Speaker, I shall move on behalf of the ANC:

That the House -

(1) notes that the Head of Hoopstad Prison, Mr L Phokontsi, and the Area Manager of Hoopstad Prison, Mr M Tsoaeli, have worked hard towards -

   (a)  creating an atmosphere for proper rehabilitation of prisoners;


   (b)  creating  conditions  and  opportunities  for  prisoners  to  be
       released, having developed better and progressive  values  which
       contribute towards a crime-free society; and


   (c)   developing  Hoopstad  Prison  into  a   true   institution   of
       transformation;

(2) believes that the efforts made by these prison officials contribute positively towards preventing crime and restoring the moral fibre of our society;

(3) congratulates these officials in their selfless dedication; and

(4) calls on other prison officials to emulate this shining example.

[Applause.]

Mrs S V KALYAN: Madam Speaker, I hereby give notice that I shall move: That the House -

(1) notes that the floor-crossing legislation has temporarily been stopped by the court;

(2) notes further that the will of the voters is what should count in a democracy;

(3) therefore resolves that in the event of floor-crossing not being possible, the ANC/New NP in the Western Cape should hold an election to give the voters an opportunity of expressing their will; and

(4) further resolves that any ward councillors anywhere in South Africa who wish to leave their party should be encouraged to resign and fight a by-election. [Applause.]

Prince N E ZULU: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:

That the House -

(1) compliments the Johannesburg police on having acted swiftly after being tipped off about a bank robbery that was to take place at Absa Bank in Parktown on Wednesday;

(2) further compliments the police on having ensured that neither they themselves, civilians nor robbers were hurt in the attempt to foil the heist, thus allowing the law to take its course in respect of the robbers as they will soon be facing charges;

(3) deplores the fact that the robbers are not even South Africans, but Zimbabwean nationals; and

(4) expresses its unqualified gratitude to the members of the public who blew the whistle on this unbecoming act. [Applause.]

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

That the House -

(1) notes that on Wednesday the ANC won by-elections in the rural stronghold of KwaDlangezwa’s Ward 10 under the Mhlathuze Municipality on the KwaZulu-Natal north coast;

(2) believes that the growing support for the ANC in this area is as a result of its commitment to improving the quality of life of the people and working for peace, so that development can take place; and

(3) congratulates the ANC candidate, Comrade Riot Mkhwanazi, on winning the by-elections convincingly.

[Applause.]

Mnr J DURAND: Mev die Speaker, hiermee stel ek namens die Nuwe NP voor:

Dat die Huis -

(1) daarvan kennis neem dat -

   (a)  die DA in Kimberley, die parlementêre hoofstad  van  die  Noord-
       Kaap, in 'n tussenverkiesing vernietig is;


   (b)  die DA se steun van 1 048 stemme in 2000 na net 137 getuimel het
       en dat selfs die onafhanklike kandidaat byna 3 keer meer  stemme
       as die DA gekry het; en


   (c)  hierdie uitslag bevestig dat die DA -


       (i)   se steun besig is om te kwyn en dat dit nie 'n tuiste bied
             vir denkende kiesers wat nie net wil raas en blaas nie; en


       (ii)  nie 'n party is vir kiesers wat 'n  verskil  wil  maak  in
             Suid-Afrika en deel wil  wees  van  die  hoofstroompolitiek
             nie; en (Translation of Afrikaans follows.)

[Mr J DURAND: Madam Speaker, I hereby move on behalf of the New NP: That the House -

(1) notes that -

   (a)  the DA in Kimberley, the parliamentary capital of  the  Northern
       Cape, was destroyed in a by-election;


   (b)  support for the DA dropped from 1 048 votes in 2000 to only  137
       and that even the  independent  candidate  polled  almost  three
       times more votes than the DA did; and


   (c)  this result confirms that -


       (i)   support for the DA is  dwindling  and  that  it  does  not
             provide a home for thinking voters who do not  simply  wish
             to rave and rave; and


       (ii)  the DA is not a party  for  voters  who  want  to  make  a
             difference  in  South  Africa  and  want  to  be  part   of
             mainstream politics; and]


 (2)    believes it is time South Africans under the  DA  banner  became
     proudly   South   African   by   supporting   the   New   NP    ...
     [Interjections.] ... or stayed partially South  African  under  the
     leadership of Tony Leon and the DA, the ``Defeated Alliance''.

Ms ANNELIZÉ VAN WYK: Madam Speaker, I will move on behalf of the UDM at the next sitting of this House, without commenting on the merits of the case or compromising the legal proceedings underway:

That the House -

(1) notes the ruling of the Cape High Court last night, granting interim relief to the UDM - and suspending floor-crossing - in its urgent application for an interdict, pending a Constitutional Court application on the constitutionality of the floor-crossing legislation; (2) condemns comments made by the presidential spokesperson, Mr Bheki Khumalo, to the effect that the Cape High Court ruling is not applicable to all provinces;

(3) acknowledges that to the best of its knowledge South Africa is a unitary state, where the ruling of a High Court is applicable to the country as a whole; and

(4) notes that the UDM is exercising its legal right and responsibility to protect the rights of the voting public. [Interjections.]

Ms N M TSHEOLE: Madam Speaker, I give notice that …

The SPEAKER: Order! Hon member, I believe that a member can only move one notice of motion in terms of the Rules. Am I correct? [Interjections.] Did you not move an earlier notice of motion?

Ms N M TSHEOLE: [Inaudible.] The SPEAKER: My apologies.

Ms N M TSHEOLE: Thank you, Madam Speaker. I hereby give notice that I shall move on behalf of the ANC:

That the House -

(1) notes -

   (a)  with concern the latest developments in the Middle  East,  which
       may prolong a war that has led to unnecessary loss of  life  and
       destruction of property in the region;


   (b)  that the intervention by the  international  community  has  not
       resulted in the eagerly awaited resumption  of  peace  processes
       that will lead to the establishment of a  sovereign  Palestinian
       state, coexisting alongside a secure state of Israel; and


   (c)  that  Minister  Ariel  Sharon  has  established  30  new  Jewish
       settlements in occupied Palestinian territories since he assumed
       power, and is now installing an electrified  security  fence  to
       control the movement of Palestinians across Israeli boundaries;

(2) believes that the long-term security of the people of Israel lies in the peaceful resolution of the crisis in the Middle East; and

(3) calls on the international community to exert more pressure on all parties to work towards the peaceful resolution of the Middle East crisis.

[Applause.]

Ms C DUDLEY: Madam Speaker, I shall move on behalf of the ACDP:

That the House - (1) expresses its outrage that 47 specialist doctors have been put in a position where they feel honour bound to withdraw their services from Rob Ferreira Hospital in Nelspruit;

(2) acknowledges that the specialist forum is protesting the dismissal of the hospital’s superintendent, Dr Thys von Mollendorff, by the province’s health department, after he had been found guilty of misconduct for allowing the Greater Nelspruit Rape Intervention Project, Grip, to occupy a rape-care room in the hospital;

(3) deplores the actions of MEC Manana, who has handled this situation shamefully, and in so doing has victimised the people of Mpumalanga, especially the rape victims who were so ruthlessly targeted and disadvantaged; and

(4) calls on the Health MEC in Mpumalanga to do the only decent thing and rectify the situation immediately by apologising for her error in judgment, reinstating Dr Von Mollendorff, and supporting Grip in the excellent work they are doing for the people of Mpumalanga.

Mr I S MFUNDISI: Madam Speaker, I give notice that on the next sitting day of the House I shall move on behalf of the UCDP:

That the House -

(1) notes that the leader of the UCDP, Kgosi L M Mangope, is a visionary for all time in that the structures he put up continue to benefit not only South Africa, but the whole world;

(2) further notes that Sun City has recently hosted the discussions revolving around the resolution of the conflict in the Democratic Republic of Congo;

(3) believes that the use of Sun City as a venue for civil society and women’s meetings during the World Summit on Sustainable Development and the fact that the complex will also relieve the shortage of accommodation during the summit, while the Pilansberg Airport will facilitate travel to the summit venue, are a vindication of his vision; and

(4) calls on all people to face up to reality and accept that this leader has brought a legacy of wealth and development into being in South Africa.

Miss M N MAGAZI: Madam Speaker, I shall move on behalf of the ANC: That the House -

(1) notes that -

   (a)  African scholars and  academics  decided  to  launch  their  own
       research studies on the implementation of Nepad during a  three-
       day  meeting  which  took  place  in  Pretoria  and  ended  last
       Thursday; and
   (b)  Prof Adele Jinadu of Nigeria  emphasised  that  this  initiative
       would not  compete  with  formal  Nepad  structures,  but  would
       complement the work they would be doing;

(2) believes that the success of Nepad also depends on the mobilisation of academics and civil society on the continent; and

(3) welcomes the initiative by African academics to embark on multisectoral research programmes to take forward the objectives of Nepad.

[Applause.]

Mrs G M BORMAN: Madam Speaker, I hereby give notice that I shall move:

That the House -

(1) congratulates the DA-run Unicity of Cape Town on the appointment of an audit committee, composed of top business leaders, academics and professionals, with the task of ensuring compliance with best practices in corporate governance;

(2) recognises that this step demonstrates a commitment to good governance, which sets the DA city government way ahead of ANC governments countrywide; and

(3) urges all councils around the country to follow the DA lead.

[Interjections.] [Applause.]

Mr M S M SIBIYA: Madam Speaker, I hereby give notice that on the next sitting day of the House I shall move on behalf of the IFP:

That the House -

(1) notes that a South African rescue team aboard the SA Agulhas is on its way to the Antarctic where over 100 people are marooned on a ship trapped by pack ice; (2) further notes that temperatures can drop to below 50 degrees Celsius and that there are only two hours of daylight in winter in the Antarctic;

(3) hopes that the rescue team reaches the marooned ship soon and that the mission is completed successfully; and

(4) prays for the safe return of all involved in this mission.

Ms M C LOBE: Madam Speaker, I shall move on behalf of the ANC:

That the House -

(1) notes that the ANC Youth League embarked on nationwide marches to highlight the problem of youth unemployment;

(2) further notes that a stable and prosperous future for our country depends on the initiatives of all stakeholders to empower young people to play a meaningful role in the development of our country; and

(3) calls on all stakeholders and the private sector in particular, to embark on concrete steps to address the problem of youth unemployment. [Applause.]

Mnr I J PRETORIUS: Mev die Speaker, hiermee stel ek namens die Nuwe NP voor:

Dat die Huis -

(1) met kommer kennis neem dat navorsing deur die Alliance for Children’s Entitlement to Social Security (Acess) daarop dui dat drie uit vier kinders in armoede grootword en dat 25% van hul groei en ontwikkeling deur wan- of ondervoeding vertraag word;

(2) verder kennis neem dat ongeveer die helfte van Suid-Afrika se bevolking moet oorleef op ‘n inkomste van minder as R144 per maand en dat meer as 18,5 miljoen kinders hierdeur geraak word; en

(3) ook daarop let dat die Nuwe NP homself opnuut verbind tot armoedeverligting, want dit is veral ons kinders wat hieronder ly, en hulle is van ons afhanklik om hulle omstandighede te verbeter en vir hulle die toekoms te gee waarop hulle geregtig is. (Translation of Afrikaans notices of motion follows.)

[Mr I J PRETORIUS: Madam Speaker, I hereby move on behalf of the New NP:

That the House -

(1) notes with concern that research by the Alliance for Children’s Entitlement to Social Security (Acess) indicates that three out of every four children are raised in poverty and that 25% of their growth and development is inhibited by mal- or undernourishment;

(2) further notes that about half of the South African population has to survive on an income of less than R144 per month and that more than 18,5 million children are affected by this; and

(3) also notes that the New NP has once again committed itself to poverty relief, because particularly our children are suffering as a result of this, and they are dependent on us to improve their circumstances and provide them with the future they are entitled to.]

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

That the House -

(1) notes that a large percentage of South African companies in the financial services, retail and manufacturing sectors have been forced to retrench their employees in the past three months; (2) further notes that, according to a recent survey by Deloitte and Touche Human Capital Corporation, the percentage of companies that have retrenched employees is exceedingly high, indicating that the local economy is still depressed; and

(3) calls on the Ministers of Labour and of Finance to heed the findings of this survey and encourage entrepreneurial skills development and thus job creation, thereby alleviating the plight of the poor, who are the harshest hit by these retrenchments. [Applause.]

                      SUSPENSION OF RULE 253(1)

                         (Draft Resolution)

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move the draft resolution printed in my name on the Order Paper, as follows:

That Rule 253(1) be suspended for the purposes of conducting the Second Reading debate on the Mineral and Petroleum Resources Development Bill [B 15 - 2002] (National Assembly - sec 75).

Question put: That the motion be agreed to.

Division demanded.

The House divided.

AYES - 151: Abram, S; Ainslie, A R; Baloyi, M R; Baloyi, O S B; Bekker, H J; Benjamin, J; Bhengu, F; Blaas, A; Bloem, D V; Booi, M S; Cachalia, I M; Cassim, M F; Chalmers, J; Chiba, L; Chiwayo, L L; Cwele, S C; Davies, R H; Diale, L N; Dithebe, S L; Doidge, G Q M; Douglas, B M; Dowry, J J; Duma, N M; Durand, J; Erwin, A; Fankomo, F C; Fazzie, M H; Ferreira, E T; Fihla, N B; Gcina, C I; Geldenhuys, B L; Gerber, P A; Gomomo, P J; Goosen, A D; Greyling, C H F; Gumede, D M; Hanekom, D A; Hogan, B A; Jassat, E E; Jeffery, J H; Joemat, R R; Jordan, Z P; Kalako, M U; Kati, J Z; Kgarimetsa, J J; Kgauwe, Q J; Kgwele, L M; Komphela, B M; Koornhof, G W; Kotwal, Z; Lamani, N E; Landers, L T; Lekgoro, M K; Le Roux, J W; Lishivha, T E; Lobe, M C; Lockey, D; Louw, J T; Louw, S K; Lyle, A G; Mabe, L; Magazi, M N; Magubane, N E; Mahlangu, M J; Maimane, D S; Maine, M S; Makasi, X C; Malebana, H F; Maloney, L; Maphalala, M A; Maserumule, F T; Masithela, N H; Masutha, M T; Mathibela, N F; Maunye, M M; Mayatula, S M; Mbadi, L M; Mbombo, N D; Mbuyazi, L R; Mfundisi, I S; Mguni, B; Middleton, N S; Mnandi, P N; Mndende, O N; Mnumzana, S K; Modise, T R; Mohlala, R J B; Mokoena, A D; Molebatsi, M A; Molewa, B G; Moloto, K A; Morutoa, M R; Motubatse-Hounkpatin, S D; Mpaka, H M; Mpontshane, A M; Mtsweni, N S; Mutsila, I; Nair, B; Ndlovu, V B; Ndzanga, R A; Nefolovhodwe, P J; Nel, A C; Newhoudt-Druchen, W S; Ngcengwane, N D; Ngculu, L V J; Nhleko, N P; Nhlengethwa, D G; Nkabinde, N C; Nobunga, B J; Nqodi, S B; Ntuli, B M; Ntuli, S B; Nzimande, L P M; Olifant, D A A; Phadagi, M G; Pieterse, R D; Pretorius, I J; Rabie, P J; Rajbally, S; Ramgobin, M; Rasmeni, S M; Ripinga, S S; Schippers, J; Schneeman, G D; Schoeman, E A; Seaton, S A; Sekgobela, P S; September, R K; Shilubana, T P; Shope, N R; Sibiya, M S M; Sigwela, E M; Sikakane, M R; Simmons, S; Sithole, D J; Skhosana, W M; Smith, V G; Solomon, G; Tinto, B; Tolo, L J; Tsheole, N M; Vadi, I; Van Deventer, F J; Van Schalkwyk, M C J; Van Wyk, A (Anna); Van Wyk, A (Annelizé); Van Wyk, J F; Van Wyk, N; Vos, S C; Zondo, R P; Zulu, N E.

NOES - 30: Andrew, K M; Borman, G M; Botha, A J; Bruce, N S; Da Camara, M L; Dudley, C; Ellis, M J; Farrow, S B; Gibson, D H M; Green, L M; Grobler, G A J; Heine, R J; Jankielsohn, R; Kalyan, S V; Leon, A J; Madasa, Z L; Maluleke, D K; Moorcroft, E K; Ntuli, R S; Opperman, S E; Pillay, S; Schalkwyk, P J; Schmidt, H C; Selfe, J; Semple, J A; Seremane, W J; Southgate, R M; Swart, P S; Taljaard, R; Waters, M.

The SPEAKER: Order! Hon members, there are only 180 members in the House. The question, therefore, cannot be decided. [Interjections.] [Applause.]

DEBATE ON REPORT OF PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY ON PUBLIC HEARINGS ON INDUSTRIAL POLICY

The SPEAKER: Order! Hon members, please take your seats.

The MINISTER OF TRADE AND INDUSTRY: Madam Speaker, I must commend the House for its commitment to industrial and manufacturing strategies. There is a major world event taking place outside this House, and the score is now one- all.

I would like to address some of the matters raised by the excellent report of the portfolio and joint committees on industrial strategy. I believe there are four areas that are worth addressing, in order for us to obtain some consensus and clarity on these very crucial issues. These areas are the role of exports in our economic strategies; the role of knowledge and its impact on employment and unskilled workers; the role of the trade and industry institutions in the manufacturing strategy; and what specific actions can be taken with the private sector to carry out that strategy.

There was comment at the hearings - and also in the report - that we should possibly be cautious of placing excessive emphasis on exports as leading our growth process. I would like to submit that in some respects there is a misunderstanding here. I submit that in the global economy today, an economy that is not capable of exporting is also not capable of developing itself domestically.

These are not opposing or alternate parts between developing one’s domestic economy and exports. The global economy, as we have seen, is one where there is an increased level of trade in all products. All economies are far more open than they have been for many centuries. Accordingly, we are increasingly operating within a single global economy, and our ability to produce and trade in that economy is also, in effect, our ability to export our products in a competitive manner. Therefore, the strategy that we are looking at is not one that is designed just to promote exports, but also to change and restructure the economy so that its total capacity, no matter where the product is sold in the final market, is competitive.

An important reference was made to a very interesting study done recently by Unctad, on the question of exports - and manufacturing exports, in particular - in the developing world. They make the point, and a very correct point, that it is not just the level of exports that is important, but also the value-added component within the domestic economy. That is also very important.

This is a point that we entirely accept. The paper sets out our strategic response to this question, and that is to focus our attention very much on the value change or the value matrices. What we mean by this is that we should continually access where we can add value in our economy. What linkages we can create between different parts of the economy, all those linkages being in themselves internationally competitive.

This allows us, as well, to develop those parts of the economy that are primarily focused on sale into the domestic market. So, we are very conscious of this requirement in our strategy, ie that we must act across a broad front of areas, in order to ensure that the level of value added, and net exportation from our economy is rising, not falling.

In South Africa we had certain successes in this area, but we still have a considerable amount of work to do. The advantage we have as an economy and as a society is that we have an immense resource base, allowing us to beneficiate a large number of different products and, therefore, bring them into the manufacturing process for a greater value-added component.

Another point of concern that has been raised on a number of occasions is, are we correct in emphasising the question of the knowledge economy? Will this not create a situation where we will not be able to employ unskilled workers? Is it not inappropriate for South Africa, which has a skills shortage?

Our argument is that this is not something that offers a choice. The processes of production in the world are changing. They are being driven increasingly by our capacity to manipulate and transfer knowledge and, therefore, to avoid that or not to place this at the forefront of our priorities would be a serious error. It does not, however, mean that we are, therefore, not going to be able to employ less skilled workers or unskilled workers. A range of strategies would be necessary.

In a study that my own department has done, it is very interesting to see that as a proportion of the work force, in the year 2001 an average of only just over 10% of the total workforce in the manufacturing industry could be considered to be highly skilled workers. The rest would be less skilled, semiskilled and unskilled workers.

So, the issue at stake here is to develop our industrial sectors, and that is crucial. That will assist us in creating employment for the wider workforce. In any event, as we know, we are making considerable progress in ensuring that the vast majority of all our citizens go through to secondary level education, and this in itself creates an employment base and an employment capacity for the type of economy that we are trying to build.

So, once again, I submit that the choice of a knowledge economy is not a choice, it is an imperative. It is something that we have to move towards. But it does not mean that we are, therefore, not conscious of and will not be able to employ less skilled workers.

Let me, very briefly, deal with the role of the institutions within what we call the Council of Trade and Industry Institutions. I think that the report made a valid point that possibly the submissions made here were not always coherent. I think this is true. We are working through the Council of Trade and Industry Institutions - a very interesting innovation within the structures of Government - to align these processes. However, there is no question whatsoever that some of these institutions play a very important role, indeed.

The Council for Scientific and Industrial Research, the Industrial Development Corporation and the SA Bureau of Standards are, in particular, the major institutions that have an impact on the economy. That impact is not always visible. As we have seen in recent times, a major structural change has been brought about in our steel industry, and this is essentially through the ability of the Industrial Development Corporation to negotiate with financial muscle for a restructuring of that industry, very much to the benefit of the industry and the iron ore mining industry in South Africa.

So, the IDC plays a critical role in many sectors of the economy. Members felt that it should possibly be more focused on small business. I will put a slight proviso in on that. The Industrial Development Corporation is a specialist institution. In fact, it is probably one of the best of its kind in the world. Its basic strength is its ability accurately to identify projects that will be successful and finance them over a sustained period of time. It is not a developmental agency, as such. It is not designed to bring about a large number of small businesses in our economy. It is designed to bring about very vibrant, active small businesses that will, themselves, impact on the rest of the economy.

Let me, finally, give some examples of what we are doing in practice to bring about change in our economy. Most members are familiar with the Motor Industry Development Programme, but probably not with what actually goes on in that programme. We have a strategic investment committee with all the automobile industries, ie component, steel and aluminium manufacturers, and we systematically examine the totality of the industry as to what component goes into the industry and whether it would be feasible to produce that component competitively in South Africa. This has led to considerable investments in the economy, but it is painstaking and detailed work.

Another example would be Cape Town and Durban. Hon members may have noticed that South Africa’s exportation of yachts and ocean-going crafts has risen very rapidly. We now export more than half a billion rands worth of such equipment. How do we do this? We do it merely by talking to the industry, and assisting them to promote their products abroad. Increasingly, we are starting to work together with them to get skilled training here in the Cape and in the Durban areas. So, we get higher quality crafts people who can produce the excellent products that South Africa is capable of producing.

Sometimes we do some very basic things. Most members who watched the Comrades Marathon on 17 June would have continually seen the little Spirulina advert that was up there. Now in the Free State we have started a new facility to create even larger quantities of Spirulina, using old facilities in a milling company where there was a lot of space for the water that is needed for that. So, it is this kind of detailed work that one gets down to with industries, to create possibilities.

Finally, in the information and communication technology industry, we have recently started a learnership. A group of 1 000 youngsters have joined four major companies on a learnership programme, and this is an extremely exciting prospect. They will get certification on a wide range of information and communication technology dimensions.

So an industrial or manufacturing strategy is not some grand plan or miracle cure. It is plain hard work, a lot of attention to detail and focusing on what is possible and what is not. [Applause.]

Mr N S BRUCE: Madam Speaker, it is difficult to be controversial before lunch and, in any event, my party has already expressed the view that it supports many aspects of the policy that has been put forward by the DTI. But we do not feel exactly the same way about some of the appeals that were made during the hearings, and that is what I will now briefly reflect upon.

First, let me welcome, in the gallery up there, all those businessmen who have come to be electrified by this debate here today. [Laughter.]

One can bet one’s bottom dollar that politicians and bureaucrats, whether they believe in God or Marx, have a touching faith in industrial policy. It is conveniently packaged and branded as a means of increasing their influence or power.

Similarly, businessmen who have a preference for special pleading, rather than competition, find themselves allies of the bureaucracy in this respect. Whether or not industrial policy contains economic nourishment needs close examination, for the political strength of the brand can obscure the economic efficiency of the policy.

As that famous advertising man, David Ogilvy, once said, and I quote:

Carnation Milk is the best in the land Here I sit with a can in my hand No tits to pull, no hay to pitch, You just punch a hole in the son of a bitch.

But Carnation Milk has proved to be no substitute for the cow, and industrial policy is not a substitute for efficient resource allocation through market initiative.

Enthusiasts look to Japan, where the interventions of the fabled Miti have been credited with supernatural apprehension of the demands of the future. Yet the massive targeting of steel in the sixties and seventies led, in the eighties, to the lay-off of more than 50 000 steel workers and the scrapping of underused plants.

Miti’s attempts to discourage the expansion of the Japanese car industry are legendary. In 13 industrial sectors between 1955 and 1990, there was a negative correlation between the rate of growth and the level of policy support.

The European Union’s policy of picking winners has proved to be no more successful. Bureaucrats allocated taxpayers’ resources to selected industrial clusters. They failed to understand that markets are spontaneous mechanisms, and fell victim to the fatal conceit that civil servants can do better. While they were doing this, the Soviet empire was crumbling, and the Chinese began to recognise that politicians and bureaucrats do not have the knowledge of time, place and circumstance, which is a prerequisite for efficient economic choices.

In Britain, during the sixties, an industrial policy approach, similar to the more recent European Union one, was tried by the Wilson government. Here, in 1994, similar industrial triangles were mooted, which reflected a desire to move towards what was called industrial democracy.

The outcome in Britain was the Thatcher policies of the seventies and eighties, which have given that economy nearly three decades of sustainable growth. Here we are still in a period of industrial malaise, talking about Thatcher policies with superficial enthusiasm, but implementing very little. None of this means that my party is against government intervention. On the contrary, intervention is sometimes vital, especially to foster competition, but also to counteract market failure and government failure.

Ronald Coase, the American Nobel Prize winner, developed in the sixties what he called the ``Coase Theorem’’. Simply put, it is that markets will operate efficiently if transaction costs are low, and property rights are clearly specified. If they are not, interventions along these lines are needed to counter market failure.

However, Coase is also a part of that school of public choice economists who have demonstrated that government failure, too, can cause markets to malfunction. The redlining of which banks in the housing market are accused is a rational response to being unable to repossess their property in areas where Government has failed to maintain law and order.

Politicians and bureaucrats have a bias towards unnecessary intervention and regulation to gain political support, and expand career prospects under the guise of doing social good. They have no property rights, so cannot gain from trade, nor do they suffer swift and direct personal losses from errors in misdirected capital and labour resources. Not only are they likely to be cavalier in this direction, but they seldom, if ever, focus on the interests of consumers and taxpayers, who drive savings, investments and entrepreneurial endeavour.

Indifference towards consumers has been responsible for many failures in the past. The cost of bureaucratic mistakes is not easily visible. The costs, in terms of alternative products, lower prices or job opportunities, are obscure. However, the beneficiaries of misdirected official interventions benefit swiftly and visibly, but the cost of inappropriate interventions are diffused over the entire population, and are hidden.

The appropriate agents for growth and prosperity are entrepreneurs who have an incentive to satisfy consumers. Entrepreneurship is the only truly costless resource. It creates previously unrevealed profit opportunities by exploiting continually changing consumer preferences and product technologies that are largely beyond anticipation.

We do not know what innovations are ahead of us, and how they are going to turn out. Long-term strategies that try to foresee innovation are bound to be wrong. That has been the experience of decades. So, the crux of industrial policy should be to find the means of releasing entrepreneurial endeavour and providing appropriate incentives to investors in what a government might consider to be socially desirable enterprises.

The trick is to be able to do this when no one has yet perceived these possibilities. These incentives must centre on the right to own and exchange property and to keep business costs down to competitive levels. They should not include cash handouts or sweetheart loans, for that encourages rent-seeking and corrupt practices rather than profit-seeking behaviour. Prescribed investments that force investors into projects favoured by politicians and bureaucrats are equally wasteful, open to corruption and reduce the innovative incentive needed to seek and exploit innovation and opportunity, which abound globally.

What are the priorities of industrial policy? First, it must make markets better by keeping down transaction costs, ensuring the right to ownership and exchange and encouraging entrepreneurs. Second, it has to foster innovative investment trends that are revealed by the markets as new technologies emerge. The trend towards manufacturing investment is part of that process that needs encouraging. Third, it has to focus, in these respects, on small businesses of proven viability and innovation, for they are capable of rapid job creation and dexterous adaptation to as yet unrecognised opportunities.

Fourth, a full impact analysis should be conducted of all existing laws and regulations that impact on small business, and legislation that introduces flexibility to regulations should be introduced. Labour laws and levies, the ownership of mining rights and taxation are important in this regard. Fifth, there should be a shift in policy formation from political to economic imperatives, and acknowledgement that, as far as small business is concerned, they are trade-offs between fostering small business and encouraging black empowerment and income redistribution. This needs to be done through rational and unemotional interaction.

Finally, Government should take note of the reluctance of business to participate in recent hearings on industrial policy, for there is a looming dislocation between business and Government that, if left unchecked, will not augur well for savings, investment and growth, let alone redistribution and black empowerment. [Applause.]

The CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I would like to address you on a point of order. The hon member who just spoke now, Mr Nigel Bruce, attributed a quote to a particular gentleman. In this quote, there was a line referring to ``the son of a bitch’’. Now, the problem with that is that Mr Bruce opened the quotation marks, but did not indicate when that quote ended. Therefore, it follows that that becomes his particular expression.

The SPEAKER: I will look at the Hansard, and give a ruling on it.

Dr R H DAVIES: Madam Speaker, serious economic policy debate in this country, which I am not too sure Mr Bruce is part of, is no longer about whether we need an active industrial or manufacturing policy. Rather, it is now sharply focused on the what the content of that policy should be.

There are very few former colonial or semi-colonial countries that have succeeded in promoting even a modest level of industrial development. Even the World Bank was forced to admit, in the study on east Asia, that those very few countries that had succeeded, all had in common active industrial policies.

Mr Bruce said just now that he was not against intervention by the state. He said his party was not against intervention by Government. But then he proceeded, in most of his speech, to argue against it. I hope that, in the fullness of time, the DP can clarify whether or not it is in favour of an industrial policy. I think it was an extremely unclear intervention that we heard just now.

Our real challenge, in my view, is to apply the lesson of economic history that an industrial policy is necessary in a way that is appropriate to our own specific context and circumstances, which differ in important respects from those of other successful newly industrialised economies at the time when they adopted their own industrial policies.

Apartheid bequeathed our country a form of dependent, semi- industrialisation. It is true that we have inherited an industrial sector that is larger and more extensive than that in many developing countries. However, it was a sector that was orientated towards the higher income, mainly white, domestic consumer market, dependent on high levels of tariff protection and also on foreign exchange, which was earned by the sale of primary products.

Over the last 20 years of apartheid rule, it was becoming evident that this pattern of industrialisation was increasingly unsustainable and the industrial sector entered into a serious and potentially fatal decline. In our struggle to transform that faltering industrial sector into an engine of growth capable of contributing to development in our country we have had to contend with another major challenge, i.e globalisation.

This has seen not just the lowering of tariff barriers across the world, and not just an expansion of cross-border trade in manufactured goods, but also a very profound change in the organisation of production. Writers of various ideological persuasions have agreed that the rise of what is called the informational economy is as profound in terms of its impact on all productive activity as was the Industrial Revolution of the 18th and 19th centuries.

Information and communications technology-derived knowledge has become the major driver of productivity increases in all sectors and all branches of production. This process of transition to an informational economy has clearly required an adaptation by productive sectors across the world.

But the globalisation process is also one associated with threats of marginalisation and widening inequality. The Minister referred to Untag’s trade and development report for 2002, which records just one aspect of relevance to manufacturing sectors in developing countries. As the Minister indicated, the Untag report points to the reality that increased export performance by developing countries is not necessarily matched by rising incomes. The Untag report notes a number of reasons for this, including trade barriers in developed countries, which have blocked access for products where developing countries are either competitive or could become so. However, the Untag report also makes the important point that the evolution of globalisation has seen a refinement of the existing unequal and uneven global division of labour, in which knowledge-intensive parts of production processes are being located and relocated to developed countries, while the less knowledge-intensive, basic manufacturing processes are being relocated to selected developing countries, which become integrated into international value chains in a dependent and subaltern manner.

A number of elements of an appropriate industrial policy have, of course, been put in place since our democratic Government was installed in 1994. The initial focus was on promoting a need to respond as a matter of urgency to the challenge of adjusting to an inevitably lower tariff regime. Identifying and creating export opportunities and reforming support packages to move away from subsidies to targeted supply-side measures were also among major initiatives.

In addition, there were highly indicative sector-specific initiatives. The Motor Industry Development Programme, which the Minister referred to, for example, highlighted the importance of inclusive, strategic vision being developed in particular sectors. The Industrial Development Corporation’s role in mainly large-scale beneficiation projects also pointed to the potential of an entity acting to identify, as its mission statement says, ``opportunities not yet addressed by the market’’.

While we may have avoided the threat of deindustrialisation in this period, it is clear that much remains to be done to ensure that our manufacturing sector makes its full potential contribution to efforts to promote growth and development in our country. Figures quoted in the DTI’s integrated manufacturing strategy document show that we are far from the dangers highlighted in the Untag report. The statistics show that while exports of manufactured goods increased from 39% of total exports in the early ’90s to an impressive 51% in 2000, manufactured output increased by a much more modest 1,8% per annum on average, while, as the report itself acknowledges, job losses in manufacturing have tended to accelerate.

The adoption of the microeconomic reform strategy was predicated, in my understanding, on the realisation that while we have made some gains since 1994, much more needs to be done to place our economy on a development- orientated growth path. The adoption of that microeconomic strategy has, in my view, placed the refinement, development and extension of an industrial or manufacturing strategy right at the centre of our efforts to promote growth and development.

It has already been mentioned that the DTI launched its integrated manufacturing strategy draft document last month, and that we had two weeks of public hearings in our committee. The report which we are debating today was published in the ATC of 6 June. That report records a range of opinions, but also a degree of consensus on some of the main themes in the IMF document.

This agreement includes agreement on the need for an active industrial or manufacturing policy that reaches beyond traditional manufacturing sectors to include services and primary producing sectors as well. There was agreement on the usefulness of the integrated value matrix approach as a concept for promoting dynamic linkages up and down value streams, as well as across sectors. There was agreement on the need to promote a transition from dialogue to collective action by stakeholders. There was agreement on the proposal that the DTI should offer customised support programmes to priority sectors.

Our report also includes a number of observations and recommendations of our own. I do not have time to discuss them all, but I would like to highlight one or two points. First, I would like to address myself to the point which the Minister himself touched on in pointing in documents to a number of tensions, not in the sense of absolute alternatives, but of issues that arise from objective circumstances which require choice and emphasis. This includes the tension between the need to address the very real challenge of raising the competitiveness of existing established industries, and the imperative to create employment and income-generating opportunities accessible to the masses of our people, particularly those living in historically disadvantaged and underdeveloped areas. A related tension is that between the need to promote export-orientated sectors and the need to develop economic activities in sectors and areas that are likely in the short term to be largely confined to the domestic and open economy. In each of these, there is a need to rise to the challenge of knowledge. But the issue of raising the knowledge component does not necessarily mean exactly the same in each of these poles.

No one would seriously argue that we can operate in any one of these poles to the exclusion of the others. The integrated value matrix approach aims precisely to try to find the dynamic linkages. But there are some very real issues of balance and emphasis. One of the main messages of our report is that we need to tilt the balance more in favour of the poor and marginalised, and emphasise activities that promote and sustain employment and can integrate the poor and the marginalised into productive activity.

Our report also includes 10 specific recommendations, and I want to highlight a couple of them. First, we have suggested that there is an urgent need to spell out more concretely and in detail how the Government and the DTI are seeking to promote the transition through dialogue and collective action. Some of those who appeared before us argued strongly in favour of giving more emphasis to sectoral summits. I know there are some reservations about the utility of this mechanism and several observations on the shortcomings of dialogue up to now were recorded in our report. We suggest that what is needed is for the mechanism to promote this transition to be spelt out in more detail and discussed and agreed to by key stakeholders.

The second point I want to refer to concerns the role of the IDC. I take the point that the IDC is a specialised agency and is not a mechanism for the massive promotion of small business, particularly micro and very small business. The point is that the mandate of the IDC, as I have already indicated, is to identify and support opportunities not yet addressed by the markets.

What we suggest in our report is that the IDC has done this very effectively in the large-scale upstream beneficiation projects, but not sufficiently in the promotion of smaller enterprises and empowerment which the corporation itself now identifies as key priorities. We suggest that it needs to act more strategically in these areas as well.

Thirdly, we suggest that there is a serious need to consider the CSIR suggestion of offering development and research services as a component of customised support packages. There is a worrying trend towards reduced involvement of big private sector organisations in research and development in South Africa, a trend which threatens to reinforce the division of labour where knowledge intensity is located in developed countries. The current model of providing poor support and then requiring research and development bodies like the CSIR to undertake contract work may not be ideal. The CSIR told us this was forcing them into short-term work, instead of longer-term research and development. We suggest the need to explore other models, conscious of the fact that these may have budgetary implications.

Finally, our report suggest the need to take account of recommendations of the Commission for Gender Equality on engendering the IMS and ensuring that the customised support programme supports gender equality and also the need to promote a higher level of co-ordination between different spheres of Government.

With these words, I commend the report to the attention of the House. [Applause.]

Debate interrupted.

                      SUSPENSION OF RULE 253(i)
                           (Announcement)

The SPEAKER: Order! Hon members, I need to correct what the quorum requirements are. I did give a figure, but in fact that does meet the quorum, which is only one third. Fortunately, this was brought out after the vote was taken. So the vote that was shown - and we have the names - was 151 ayes and 30 noes. Therefore, the motion was carried. [Applause.]

I do apologise to members, but I can also plead exhaustion. I am not sure why members were not awake enough. Perhaps they were up till midnight! We will now proceed with the rest of this debate.

RESUMPTION OF DEBATE ON REPORT OF PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY ON PUBLIC HEARINGS ON INDUSTRIAL POLICY

Mr H J BEKKER: Madam Speaker, regarding the contribution of the hon Bruce, it would be difficult for me to sip with him from the same condensed milk tin. But I want to protect him, to a certain extent, from the other members in this House. They should know that the hon Bruce is an honourable cynic and as such, one must try to understand him a little bit better. I understand him perfectly and we are very good friends in this particular regard. Today I found him to be extra fantastically amusing.

It gives me pleasure to express the support of the IFP with regard to the report on industrial policy. It is essential that we shift the emphasis in this country much more towards the expansion of our industrial capacities. The hon the Minister referred to the skills shortage and has defined it more clearly. There is an understanding from his side about the requirements regarding skills. In this particular regard, I also want to thank him for the rationality that he brought in with regard to the previous debate on the Immigration Bill, where the quota system had been questioned. His contribution in terms of that had been significant to the rethinking of that whole process.

What we are looking at with regard to industrialisation is obviously to support the economic growth of South Africa. If one works on economic growth, this is the engine room for job creation. The more growth we can have, the more jobs there would be in the end. To us it is very clear that Government cannot create jobs. The Public Service, municipalities and statutory bodies simply do not have the capacity to create wealth and jobs. This must be done primarily by the private sector, and in this regard the manufacturing industry can play a very important role.

If we look at industrialisation, we immediately become embroiled in the present crisis with regard to the inflation rates and inflation spiralling out of control. Yesterday I said that one must go back to the fundamental definition of inflation. The elementary definition would be, as I said, too much money chasing too few goods. One would then either curtail the money supply or increase the goods. Manufacturing is exactly the basis on which this can be done. Therefore, we must work very hard on this.

However, there is also the question of the currency of South Africa and the currency level as it is at the moment, if it can be stabilised and contained around R10 to the dollar. I think we are in a very fortunate position with the comparative advantages that are there in terms of our exports. We have already seen this in terms of particularly the motor industry and how they have developed in acquiring these skills.

With regard to manufacturing, we have the IDZs that are being recognised. Members will recall that in previous debates I have punted and worked on the possibility of Richard’s Bay being recognised. Now that this has come to fruition, a lot is going to happen in that area. I still think that it is up to the business sector and manufacturers to exploit the situation which is available to them.

It is with apprehension, but also with great pleasure, that one has noted that the aluminium smelter in Coega could become a reality. This could mean massive inputs in South Africa of foreign capital that will stream in. Think about all these things and what they can do to help the South African economy, and how we can improve our currency even further.

Ons het aansporingsmaatreëls nodig om tot ‘n mate die toedrag van sake te wysig in Suid-Afrika waar so baie industrialiste en veral versekeringsmaatskappye belê in groot sakekomplekse vir supermarkte. Aansporingsmaatreëls kan sorg dat hierdie maatskappye eerder begin belê in maatskappye wat vervaardigingsprosesse onderneem, want dan is dit nie bestaande rykdom wat hersirkuleer word nie, maar wel die skep van nuwe rykdom. Dit is my groot voorreg om hierdie verslag te ondersoek en die IVP se samewerking te verseker. (Translation of Afrikaans paragraph follows.)

[We need incentive measures to modify to a certain extent the state of affairs in South Africa where so many industrialists, and especially insurance companies, invest in big business complexes for supermarkets. Incentive measures can ensure that these companies begin to invest instead in companies that undertake manufacturing processes, because then it is not existing wealth that is being recycled, but indeed the creation of new wealth. It is my great privilege to examine this report and give the assurance of the IFP’s co-operation.]

Mr S M RASMENI: Chairperson, Minister and members of Parliament, when we took over the reins of power in this country in 1994, it was clear that urgent intervention was required from the new democratic Government to ensure that we addressed economic imbalances and uneven development within and between South Africa’s regions, as well as developing a prosperous and balanced regional economy in Southern Africa based on the principles of equity and mutual benefit. The objective was also to integrate into the world economy that sustains a viable an efficient domestic manufacturing capacity, and increase our potential to export manufactured products.

There is no doubt that the key goals of our industrial strategy are a substantial increase in our net national investment, especially in manufacturing, job creation and meeting the basic needs of our people. The central objective is the commitment to improve the quality of life of all South Africans, and in particular the most marginalised sections of our communities.

We commend the work done by the ANC-led Government, in particular the Ministry of Trade and Industry, during this eight-year term in which they responded very well to the deep-seated structural crisis of the economy as a result of apartheid and colonial policies of the past. These policies only promoted white interests at the expense of the black majority of this country.

This new Government has set out to transform the economy in order to improve the lives of all our people, including a macroeconomic intervention to address the debt and balance of payments crisis threatening the sustainability of economic transformation. This demonstrates a clear commitment to the principles of the Freedom Charter adopted in 1955 by the Congress of the People, which states the following under the heading ``The people shall share in the country’s wealth’’, and I quote:

The national wealth of our country, the heritage of South Africans, shall be restored to the people …;

All other industry and trade shall be controlled to assist the wellbeing of the people;

All people shall have equal rights to trade where they choose, to manufacture and to enter all trades, crafts and professions.

An industrial strategy has to be formulated within the economic context it operates in. The context determines the existing performance and structure of the manufacturing sector. Therefore, the objective of the policy must be clearly specified. The implementation strategy by which it meets these objectives must also be identified and concrete policies established, in order to fast-track the implementation of this strategy for our country.

The strategy announced by the President in his state of the nation address in February 2001 outlined the need for co-ordinated Government interventions in areas which include technology, human resource development, access to finance and infrastructure. This is a guide and a marching line for all of us.

The industrial policy debate in South Africa’s economy should be understood against the background of the legacy of apartheid policies that promoted underdevelopment, economic and social exclusion, and disaster for the majority of the population in our country. For these reasons, all coherent strategies must meet the challenges of a changing world economy and, simultaneously, meet the needs of the majority of our people.

Addressing these issues has been of critical concern to the Portfolio Committee on Trade and Industry over the past few years. The Portfolio Committee on Trade and Industry, the Select Committee on Economic and Foreign Affairs, the Department of Trade and Industry and other stakeholders decided, jointly, to lend a hand to push back the frontiers of poverty.

Hence, we convened public hearings in Parliament on industrial policy development from 23 April to 7 May 2002. Submissions were invited to address a range of issues related to the industrial policy and comment on the discussion document of the Department of Trade and Industry entitled ``Accelerating Growth and Development’’. The contribution of the integrated manufacturing strategy was released in April 2002.

This document seeks to improve the realisation of South Africa’s potential in the underdeveloped part of our economy, which is characterised by weak growth declining investment and savings rates low levels of investment in research and development falling formal employment and high levels of unemployment, especially among black people and women in all racial groups. These characteristics are manifested in and reflect the high levels of inequality and poverty that still prevail in our country.

We believe that the essence of a manufacturing or industrial strategy is to address the existing industrial structure and its implications for the possible future development paths of the economy to create employment, in order to make ends meet. Full economic participation across issues like race and gender should be among the core challenges for an effective and efficient industrial policy in our country, as reflected in the microeconomic reform strategy document. The need for a coherent plan to take collective actions forward to implementation is a core element of this strategy.

Clear targets are to be set and an effective monitoring and evaluation framework put in place to address black economic empowerment, small business development, employment and the geographic spread of economic activity. We also need to ensure equitable participation by women, especially black rural women, in our country. The gender perspective needs to be integrated into all other policy processes. Thus, industrial restructuring should have an evident effect on women as their participation in the economy is of the utmost importance.

We need to ensure that strategies promote the development of industries in a transforming manner, especially women’s organisations, which need to be taken more into account in economic decision-making. In doing so, we attempt to address SMMEs, co-operatives, access to training, participation in policy formulation, the elimination of occupational segregation, and the monitoring of policy impacts, access to finance; attention to market access and unfair competition.

However, the high levels of poverty and unemployment are still giving cause for concern in achieving appropriate economic integration to get rid of the high levels of inequality that still exist. Financial institutions should take prompt action to make loans available to the previously disadvantaged sector of our population, whilst developing a more efficient and customer- friendly financial market in this country. The foremost challenge to the nonfinancial sector is to resolve inadequate capacity and indebtedness and press ahead with reform of the supply side structure.

The Government should create an environment conducive to reform and improve employment opportunities for those who are unemployed. The private sector should take the initiative to rejuvenate existing industries, open up new areas of business and industry and secure employment opportunities. The Government and industry should co-operate in developing a national strategy to encourage the growth of industries capable of leading the economy in the next century.

Government-industry collaboration is also needed … [Time expired.] [Applause.]

Miss S RAJBALLY: Chairperson, hon Minister, hon members, the MF agrees that a need exists to develop a manufacturing industry strategy that would establish and outline key objectives and priorities for industrial development and advancement. It also agrees that it is time we shifted from talk to action. We have policies in place. We are now talking about other policies, but we have to learn to put the current policies into action effectively and efficiently.

Our eyes are not closed to the fact that the many divisions, categories and forms existing in the industrial and manufacturing sectors do not allow for policy changes to be made easily. Each is based within a different scenario and activation is possible, but somehow the changes and strategy to be implemented have to be such that each sector should be able to conform without too much hassle.

The shift from macroeconomic stability to microeconomic action is also supported, as long as it has a positive effect on the South African economy. The MF strongly feels that the involvement of all sectors in devising such a strategy is necessary to pursue new ideas and satisfy the industry. Furthermore, the involvement of Government as a driving force is supported. The MF sees the committee’s efforts as remarkable, and is disappointed by the low level of participation by the business sector. [Applause.]

Mr D LOCKEY: Chairperson, I rise to speak in support of the Integrated Manufacturing Strategy report. Much has been achieved over the past eight years in transforming our economy from a resource based, isolationist, protectionist and crony capitalist economy into one that is flexible, responsive and globally competitive.

Thanks to the efforts of our Government, we are beginning to reap the benefits of the structural changes that were brought about after 1994. Last year a staggering 56% of total exports were high-tech manufactured goods. An example of this is catalytic converters, where a total of R9 billion worth of converters were exported in 2001.

In 1991 we were a net importer of vehicles and components worth R3 billion. Last year, we were a net exporter of vehicles and parts worth R3,4 billion. The IDC, last year, invested in 515 projects worth R9,3 billion, more than double the figure for the previous year. These projects created 20 000 new jobs and accounted for export earnings of R10,5 billion.

The IMS sets out broad objectives of an industrial strategy. It states the key priorities for a future development path, and outlines the role of all economic stakeholders in the realisation of this plan. It accepts that the state must play a role in co-ordinating and creating the conditions under which we can achieve higher levels of growth and development.

South Africa has many competitive advantages when compared to developing countries. We have the cheapest electricity in the world; the cost of our land is extremely competitive compared to other developing countries and we have an excellent legal system, a sound financial and banking infrastructure. Furthermore, the cost of skilled labour in this country is very competitive compared to other developing countries. We also have duty- free and quota-free access to the two largest markets in the world, namely the EU through the Trade Co-operation and Development Agreement, and the USA through the Africa Growth and Opportunities Act.

Above all, we have a Government that is committed to working with all stakeholders in the economy to ensure investment, growth and development. Many South African companies are now doing excellent business throughout the continent and the world, because of the efforts of our Government. The growth in our export sector bears testimony to this.

The key objective of the IMS is to build on our achievements and our competitive strengths. Its vision is to achieve a restructured and adaptive economy that will ensure growth, employment and equity, built on the full potential of all our people and our regions.

The IMS hopes to achieve this by an equitable geographic spread of social and productive investment, an integrated manufacturing economy with high levels of value added to our natural resources, a telecom and technology infrastructure that will support and enhance our production processes, a high level of knowledge and technology capacity amongst our workforce, a greater diversity of enterprises and services; a skilled, economically, literate and adaptable entrepreneurial class, and an efficient, supportive and responsive state structure that can serve the needs of all economic stakeholders.

The vision of the IMS is to build, enhance and improve South Africa’s competitiveness in the global economy, and simultaneously to develop the underdeveloped parts of our economy in order to realise our people’s full potential. The realisation of these objectives is vital for future growth and development in our economy.

Today the global economy is characterised by constant innovation and a relentless drive to produce cheaper yet high quality goods. Any country or business which fails to meet these ever-increasing demands has no chance of surviving the impact of globalisation in the medium to long term.

The longer the restructuring of economies is postponed, the more painful the events or transition will be. The only way to meet these demands is through innovation and an increase in knowledge intensity in all spheres of economic activity. The objective must be to work smarter and to co-ordinate markets in order to produce synergies between different businesses and industries. The IMF clearly highlight these requirements.

The second and equally important though more daunting challenge, is to develop the underdeveloped parts of our economy - to push back the frontiers of poverty. This is vital to ensure that we stabilise our country socio-economically and that our economy reaches its optimal levels of development. Unless this is achieved, our current experience of low rates of growth, declining savings and investments, poor research and development, and falling levels of formal employment will persist.

A leading financial institution, after intensive market research, divided the South African population into the following market segments. In the top four percent, they found the reapers. These are the supporters of the DP, who have relocated their investments into dollar and sterling investments. Below that, there is the seven percent that they classified as the builders. This is the backbone of the economy responsible for all entrepreneurial endeavours and investment. Below them, they found the nine percent which they classified as the evaluators. These are the people who save and are financially independent. Below them they found the 11% which they classified as the participants. This is the upper working class, people who have formal employment. The problem with this segment is that these people have too much debt. Below the participants, they found the entrants. These are the lower-income groups in the working class, who are also in too much debt. A staggering 20% are what they classified as the outsiders. These are the people who are involved in the informal sector. At the bottom of this pyramid, they found the subsisters. These are the unemployed and those who live without any real economic participation. They are outside the mainstream of the economy.

There is a remarkable correlation between the categorisation of the subsisters and the level of unemployment in South Africa, as well as findings by the DTI about the percentage of our people who live in absolute poverty in South Africa. For as long as almost half of our population live outside the mainstream of our economy, there will be serious constraints to economic growth and development.

These social and economic inequities also pose a real threat to stability in our country over the medium to long term. No democracy is sustainable in the long term if the majority of the electorate is excluded from the mainstream of the economy. I think this is one of the most salient lessons that one can learn from the Zimbabwean experience. The IMS has recognised a need for greater equity, and its key performance indicators are growth, competitiveness, black economic empowerment, small business development, employment creation, geographic equity in the spread of investment and economic activity. No one in this Chamber can argue that these are not the fundamental challenges that confront our economy today.

The achievement of these key performance indicators in vital in the process of building a strong and sustainable economy in South Africa. The state must lead the process in creating greater levels of equity. The IMS hopes to achieve these levels of equity through new offerings of small and black businesses, partnership programmes and a nonstatutory BEE advisory council.

The IMS also highlights the need to address the barriers that SMMEs face in our economy as a priority that must be dealt with. The Government must do more through procurement, subcontracting and outsourcing to ensure that we build a vibrant and sustainable entrepreneurial class amongst historically disadvantaged individuals. We must also begin to focus on other dimensions of empowerment.

Thus far there has been a disproportionate emphasis placed on black people controlling companies in our economy. There are other dimensions of empowerment that we need to examine. We need to look at management training and involvement by historically disadvantaged individuals in large corporations in this country, joint ventures and partnerships, and what is happening in the liquid fuels industry is a wonderful example of what can be achieved through joint ventures and partnerships.

We also need to look at greater involvement of communities. There are many businesses operating in communities that can do a great deal to assist them to become part of the mainstream of the economy. We need to look at skills development and skills transfer. Not enough is taking place in this field. Many private businesses can do more to stimulate small businesses in this country by allowing small black business to do part of the procurement. Finally, we need to look at corporate social investment. Many large corporations are making a lot of money in this country. Anglo Platinum has made R10 billion profit in this financial year. One needs to ask: What are these people doing through corporate social investment projects to ensure that we assist those people outside the mainstream of the economy to become part of it?

I just want to make concluding remarks about investment patterns and FDI. All research that I have examined has pointed to the fact that investors are either resource sitting or market sitting. We will only attract high levels of investment if we learn to utilise our competitive strength and resources optimally. We can only achieve this through the building of effective partnerships between all our economic stakeholders.

This is the clear intention under the IMS. Once we have achieved high levels of sustainable economic growth for South Africa and our region, we will see high levels of foreign direct investment flowing into this region, in response to such market development and growth.

As the ANC we support the IMS as a comprehensive action plan to address South Africa’s microeconomic challenges. [Applause.]

The MINISTER OF TRADE AND INDUSTRY: Chairperson, let me begin by addressing the important issues raised by the hon Nigel Bruce. I am pleased that he is still here. I think he is correct: the balance between state involvement and markets lies at the very core of successful economic policy. It is for this reason that I would like to remind members exactly what this Government has done in regard to economic policy, because I am quite certain that there is no party in this House that would disagree with the basic approach that we have taken. This means that on the economy we should, in this country, be able to unite very solidly indeed, to build a new economy.

One could describe our economic policy as having three essential pillars. Firstly, there is a need for a state that is capable of decisive action in the national interest; a state that is capable of mobilising resources to bring about structural and social change; and a state that is capable of giving decisive leadership to the actors in the private sector, in collaboration with them. That is what we have stood for and what we have done.

Secondly, we believe that it is essential that certain fundamental structural changes should take place in this economy, because if that does not happen our society and our polity will not be sustainable. These changes pertain to the representivity of all races in employment, ownership of assets, the role of women and gender in our society, and the redress of the rights of certain critical natural resources. I will come back to that.

Thirdly, we believe that there must be efficient and competitive markets. These are fundamental to the operation of the economy. If we do not make these changes, we will not be a sustainable democracy or society. So those are the three pillars - a strong state, a belief in structural change, and efficient and competitive markets.

Now, we have acted on all three of these consistently for the last eight years. We have brought about markets in agriculture, used markets in our fiscal management more frequently, brought about a more active Competition Commission, etc. As members know, we have changed the water laws and are in the process of changing the mining laws.

No one who has the economic interest of South Africa at heart can possibly defend the existing mining law. There is no one in their right mind who can do that. It is a form of rand seeking which restricts the functioning of the economy. We are not attacking property rights or investors, but bringing about a fundamentally correct economic change within this economy, as we did with agriculture and the water law. We are bringing about the balance that I spoke about, and this is critical.

So, our policies are consistent. Redlining is not necessarily a rational response. It is equally possible that it is collusive abuse of power. So we believe in efficient markets. We will bring about structural change and be a decisive state. I believe that all of us can share that vision and co- operate on this matter.

Finally, let me say that with regard to the recommendations that the committees made, I would like to thank members very much. I sincerely value the hard work done by all members of those committees. This is an extremely important and valuable input into the policy-making process.

We are trying to address what members have indicated in certain areas. I think the IDC, in its submission, undersold its role in small and medium enterprises. It has had an important impact through its franchising programme and currently has a very important impact through its support for tourism and agro-industry.

With regard to the CSIR, as members know, we are about to release a more developed research-in-development strategy with the Department of Arts, Culture, Science and Technology. The approach to research-in-development cannot be a simple one. It is not going to be only in corporates, but is going to be a tiered approach. I believe that we will have a very important approach there.

With regard to gender, I am pleased to announce that, as many members may know, today we launched the SA Women Entrepreneurs’ Network in Johannesburg. I believe that this will have an important impact on the ability of women entrepreneurs to have an impact on this society. This complements our technology for women in business programme, the microlending programme and a range of other programmes designed to improve women’s participation in the economy at all levels. [Applause.] Can I thank the House for supporting the strategy?

Let me conclude by saying, once again, in the sincerest way I possibly can, that I am absolutely convinced that every party sitting in this House can accept as being fundamentally correct the basic tenets of economic policy I have just spelled out. We should be working together to build a great nation and a great economy. We have the ability to do so. If we fail, we will be stupid. [Applause.]

Debate concluded.

CONSIDERATION OF REPORT OF JOINT MONITORING COMMITTEE ON IMPROVEMENT OF QUALITY OF LIFE AND STATUS OF CHILDREN, YOUTH AND DISABLED PERSONS - VISIT TO EASTERN CAPE

Mrs M S MAINE: Chairperson, hon members, it is indeed a great honour to the young people in our country - and the hinterland of the Eastern Cape, in particular - that the debate on this crucial report to our Parliament takes place towards the end of the month of the youth, a sector of our society whose role in the liberation of our country and people will forever be celebrated by many generations to come.

The debate takes place 20 days after International Children’s Day, which our Parliament observed with the seriousness it deserved by profiling and paying undivided attention on the rights of the child - a white child, an Indian child, a coloured child, an African child, a child with a disability, rich and poor alike; indeed, a microcosm of our society.

We table the report in this august House at a time when our country, our people and all of progressive humanity are gearing themselves for the International Day of the Disabled in the next five months and two weeks, on 3 December 2002.

The youth, disabled persons and children of our country yearn for freedom from poverty, hunger and homelessness, and an end to the lack of access to education and training. They yearn for a full human rights culture, where they can grow and develop with dignity, peace and in equal brotherhood, without any prejudice and atmosphere, upon the fruition of which shall rise a truly rainbow nation.

The only appropriate procedure for dealing with the challenges facing this marginalised sector of our society, namely the youth, children and disabled, is to appreciate our past, coupled with an unwavering commitment to leave no stone unturned in creating a better life for them. Surely this will remain an empty dream if it is not underpinned by the clarity of vision.

We are proud that at no time in the history of country and its people did the future hold as much hope for the youth, children and disabled as it does today. In dealing with and confronting the challenges of the time, we do so in a vacuum, inspired and enriched by the legacy of the struggle for the poor and the disadvantaged, which we unleashed with great distinction.

In pursuing our mission, we derived strength and clarity of vision from our forbearers, the likes of Comrades Oliver Tambo, Moses Kotane and others. It is Oliver Tambo who, more than 15 years ago, declared to the white minority regime and the international community that ``a nation that does not value its youth deserves no future’’. Oliver Tambo was articulating and shaping the vision that enjoins us today as we tackle the many challenges facing our youth, a vision that places in no uncertain terms the responsibility for the positive upbringing of our youth in the hands of society.

The appropriateness of the ANC’s call for Letsema and Vuk’uzenzele - which encourage volunteer action in reconstructing and developing our country for a better life for all - is inspired by this vision, where the state creates an enabling environment of partnership with communities, to realise the ideals of reconstruction and development. It places the responsibility of guidance squarely in the hands of society, for the positive upbringing of our youth.

Clearly, in pursuit of building a better life for all, our Government and Parliament have not been found wanting in mainstreaming the challenges of the youth, the disabled and children. Our Government has adopted many international instruments that oblige it to prioritise the issues of children, the youth and persons with disabilities. Laws and policies with concomitant structures aimed at improving the lives of the sector under discussion have been put in place and are, indeed, in full swing to realise the anticipated goals.

The former President, Nelson Mandela, said in his address to the National Assembly in 1999, and I quote:

Because the people of South Africa finally chose a profoundly legal path to their revolution, those who framed and enacted the Constitution and other laws are in the vanguard of the fight for change.

It is in this legislature that the instrument had been fashioned to create a better life for all. It is here that oversight of Government has been exercised. It is here that our society, with all its formations, has had an opportunity to influence policy and implementation.

Our visit to the Eastern Cape must be understood within the context of oversight in creating an enabling environment for popular participation in the national effort for reconstruction and development. We did not go to the Eastern Cape to police the implementation of the policy, like bureaucrats.

Our task was to check whether policies and programmes agreed to by Government were being implemented and to assess the impact of our policies on the lives of young people, the disabled and children. In doing that, we integrated an aspect of building consciousness and capacity in our beneficiaries to monitor policy and utilise Parliament as a true tribunal of the people to be real architects of their own development.

Our committee’s task to monitor and evaluate progress with regard to the improvement of the quality of life and status of the youth, children and persons with disabilities was fulfilled during the course of our tour to the Eastern Cape. We liaised with service providers like Government departments and their beneficiaries, either through direct exchange with them or through their representatives. Our people were inspired to learn that whatever difficulties they might have in their midst, their representatives are more than serious, not only to pass laws and allocate resources on their behalf, but more importantly, to keep the executive and state organs on their toes for appropriate and effective spending of those resources.

We not only identified deficiencies in the system and structures, but more importantly, also advised relevant authorities on appropriate mechanisms and steps to improve the levels and quality of service delivery. With our predisposition to the national policy and legislation-making environment, we were able to make decisive interventions on many fronts through persuasion.

We prioritised the Eastern Cape because it has a committee similar to ours, though with some variations, and because it has the highest poverty level. We made this choice out of our affinity to the poorest of the poor. What became glaringly apparent is the lack of synergy between implementing structures and systems between provinces and the national Government. For instance, the issue of children is still a welfare issue delinked from the centre, which is the Premier’s Office.

It is our view that issues of disability, the youth and children are fundamental policy issues of strategic priority to our Government, so much so that they cannot be relegated to a department as they are cross-cutting, hence their correct location in the Presidency. As we did in the Eastern Cape, we take this opportunity to call on all provincial governments to locate these issues in the offices of the premiers.

The issue of the delivery of social services still remains a problem, despite policies and resources we have allocated. We witnessed instances where offices which should provide disability grants were not accessible at all. Linked to this was the problem of lack of transport infrastructure for people who live in the remote rural areas.

Whilst there is commitment on the part of the provincial government to improve the quality of service to our people, the Eastern Cape administration is still saddled with personnel who are lacking in a good work ethic and are at worst, corrupt. This is a matter which requires urgent attention. This should be understood within the context of the legacy of the bantustan administrations, where corruption was the order of the day.

As we present this report, we also take the opportunity to salute the young people of our country - the Eastern Cape in particular - who, under the banner of the ANC Youth League, established a volunteer youth corps movement to mobilise young people behind Vuk’uzenzele and Letsema. These youth corps have rendered door-to-door campaigns to mobilise and conscientise communities to enrol children for child support grants and the disabled for disability grants. We hope that this campaign will address the backlog in the registration of beneficiaries for this important social grant.

I rise to present this report for adoption by this august House. [Applause.]

Mr V C GORE: Mr Chairperson, hon members, I will concentrate on my obvious passionate interest, because I cannot walk across the floor to the ANC. I will remain with the DA. My obvious passionate interest is disability issues, while my colleague, the hon Da Camara, will focus on those areas affecting children and the youth.

Disability by form, function and description is difficult to define. There are physical, mental and hearing impairments that affect over 5 million South Africans. The effect is predictable. It begins with misunderstanding, develops into marginalisation and culminates in blatant and destructive discrimination. As can be seen from this report, the problems that confront the disabled individual are immense and diverse. Allow me to take hon members on a journey to illustrate the barriers that disabled people encounter, just to become contributing members of society and active members of their communities.

The beginning must surely be assistive devices such as wheelchairs, hearing aids and canes. They are the primary tools for disabled persons’ existence. Without them, we would continue to witness horrific incidents of mobility- impaired people being degraded and humiliated by being pushed around in wheelbarrows. If the disabled person now has a wheelchair or a hearing aid, let us move on to the next step.

Disabled people have in the past suffered under - and continue to suffer from - a substandard and ineffective education system, despite the excellent preparatory work done in this regard to address this problem by the hon Minister Asmal. The process needs to be accelerated, to ensure that disabled youth are given the necessary tools to venture out and find meaningful employment. The disabled person now has his assistive device and the necessary skills: what next?

Accessibility not only refers to the traditional aspects such as ramps and hearing signs but, equally importantly, to how the disabled person gets from his or her home to a place of work, whether by car, taxi, bus or train. The current practice by municipalities of purchasing one or two accessible buses per fleet and by taxi operators of double-charging for wheelchair users, as well as inaccessible trains, are certainly unacceptable and the new ``Group Areas Act’’ for the disabled community.

Because one is disabled, one is told to live and work in particular areas. If by some miracle - and let me assure those members who have not been to the Eastern Cape or been in the position I have found myself in, that it can only be described as a miracle - a disabled person manages to overcome all of these obstacles, the biggest hurdle he or she will then face is in the workplace itself.

Attitudes and mindsets of employers continue to restrict the development of the disabled person. There can be no better example than the South African Parliament. Claims that this is a people’s Parliament are only true if one is able to walk, see and hear. Disability issues are simply given a cursory glance and enough attention in order to be brushed under the carpet. This Parliament has no right to pass legislation forcing other employers to abide by certain conditions, if it cannot itself achieve even the most basic standards.

In conclusion, there can only be one way forward in this regard: disability rights can only be human rights. If disabled South Africans are to become active and contributing members of our society, they must be empowered with the necessary skills and tools to do so. Barriers must be removed and mindsets and attitudes must change. Disabled people can no longer be viewed as people with disabilities, incapable of doing things, but must rather be viewed as people with different abilities capable of doing anything society allows them to do. [Applause.] Nkk L R MBUYAZI: Mphathisihlalo neNdlu ehloniphekile, make ngiqale ngichaze ngaso nje isihloko sisodwa lesi ikomiti esisebenza nalo elisebenza ngaso, ikomiti lentsha, lezingane kanye nabakhubazekile.

Kimina ngikuthatha ngokuthi bonke laba bantu izingane zethu -intsha, izingane kanye nabo abakhubazekile izingane zethu noma abayeni bethu noma abazukulu bethu, kungaba noma yini. Kodwa bangabantu okufanele babe seduze kwezinhliziyo zethu.

Ake ngiqale ngokuthi umsebenzi waleli komiti njengoba eseshilo osivulele lokhu kukhuluma, ilungu elihloniphekile uMaine, uthe kungukuqaphela okusho ukuthi ukubheka ngempela ukuthi umsebenzi uyenzeka yini. Kufanele libhekisise futhi ukuthi uHulumeni omkhulu uyawenza yini umsebenzi wokubabhekelela laba bobathathu, ukubhekisisa futhi ukuthi uhulumeni wezifunda uyakwenza yini lokhu nomasipala uqobo ukuthi bayakwazi yini ukubabhekelela laba esengikhulume ngabo ngenhla.

Ikomiti lethu-ke lahamba laya e-Eastern Cape liholwa uSihlalo walo uMaine kanye nelungu elihloniphekile uHenrietta Makopani. Cishe ngamupha isihlalo, kwakungusoswebhu wethu ngaleso sikhathi. Kuyintokozo-ke kimina ukuzibandakanya nalezi zingxoxompikiswano mayelana nombiko wase-Eastern Cape ngoba asibuki wona nje kuphela owase-Eastern Cape kodwa lokhu esikubone laphaya sikubukela futhi ezinye izifundazwe nesingakayi kuzona.

Iqembu leNkatha Freedom Party ligxile kakhulu kuzimiso zobuntu ezinokunakekelwa, ukubhekelela ukuthi umakhelwane wakho uyakwazi yini ukumnakekela njengoba nawe uzinakekela ngaphandle kokumbeka amabala, ukuthi ungumuntu onjani, ungumuntu ophansi, ohluphekayo, umuntu okhubazekile, umuntu onjani kodwa ubuntu bubukelela umuntu wonke ukuthi umuntu umuntu ngabantu. NgesiNguni siye sithi umuntu umuntu ngabantu. Sibuye sithi futhi akusilima sindlebende kwabo. Izwi leNkosi futhi liyabeka ukuthi, ``vumelani abantwana beze kimi’’. Kusho ukuthi abantwana bayinto enkulu kabi. Ngakho- ke kufanele sibanakekele.

Ohambeni lwethu sabuka ukuthi izinto ezenziwayo noma esizibukayo zigxile kangakanani kubuntu, ekunakelelweni kwabo, kwentsha nokunakekelwa kwezingane nabo bonke kulesi sifunda. Esakubonayo ukuthi izikole, maqondana nokudidiyelwa kwemfundo, azikakakulungeli lokhu. Maqondana nezakhiwo izikole azikulungele ukuba zibe nama-wheel chair. Njengoba ngishilo ukuthi asibukeli i-Eastern Cape kuphela kodwa sibukela nazinye izifundazwe. Othisha nabo abakaqeqesheki ngendlela yokuthi bakwazi ukuthi uma kukhulunywa ngokuthi abakhubazekile babe phakathi kwalezi zikole bakwazi ukusebenza kanyekanye nabo. Sebekulungele yini lokho na? Konke lokhu izinto okufuneka ukuthi zibhekelelwe.

Izakhiwo eziningi nephalamende uqobo ayikho indawo elungiselwe ukupaka abantu abakhubazekile, kangangokuthi ngangihamba namalunga amabili ahloniphekile, kwakungekho indawo enophawu lwesihlalo ekhomba ukuthi yilapho abangayopaka khona. Yayingekho leyo ndawo. Akusikhona kuphela e- Eastern Cape nakwezinye izindawo kunjalo.

Mangenabe ngithi indaba yendawo yokupaka iyinto ebuhlungu kabi ngoba ngisho ezitolo siyayibona le ndaba ukuthi iba buhlungu kabi. Kuyaye kuthi kunezindawo zokupaka eziyisithupha, uthole ukuthi zonke sezithathwe abantu nje abaphilayo abagijime bayopaka kule ndawo, abangabe besakwazi ukuthi badedele laba bantu phela okufuneka ukuthi basebenzise le ndawo, badedele izingane zethu nabazukulu bethu bakwazi ukuyopaka laphaya bese beyahlupheka. Bona abanakho ukuyopaka kude kodwa thina esiphilayo siyazithatha lezi zindawo zabo. Zonke izifundazwe njengoba sengishilo zinakho ukuba nalezi zinkinga, akusiyona i-Eastern Cape kuphela. Okunye, savakashela isikole esithile esasinabakhubazekile. Kabaxhaswa muntu, basebenzisa izimali abazithola ngokukhokha kwabazali neminye iminikelo. Okunye ukuthi kukhona indawo asebeyitholile-ke asebezokwakha kuyo isikole. Lokho-ke kwasithokozisa kakhulu. Ngakho-ke sibakhulekela ukuthi bathole neminikelo eminingi ezokwazi ukuthi iyobasiza.

Mangincome ukuthi kukhona imboni eqasha abantu abaningi abakhubazekile, ikakhukazi imboni yokwakha izimoto. Lapha sathola ukuthi iqashe abantu abaningi abakhubazekile. Lokho sakushayela ihlombe ukuthi impela bahamba ngokwemigomo yale Ndlu yokuthi abantu mabaqasheke. (Translation of Zulu paragraphs follows.)

[Mrs L R MBUYAZI: Chairperson and august House, I would like to start off by focusing on the topic that our committee deals with - the committee that caters for the youth, children and the disabled.

To me, all of these people are our children: the youth, children, the disabled, husbands or grandchildren - it could be anybody. They are all people who should be near our hearts.

I would like to state that the function of this committee is to monitor, as was mentioned by the hon member Maine, who opened this discussion. That means that it has to check whether or not tasks are performed. It has to examine whether the national Government does its work of looking after these three groups. It also has to examine whether or not provincial governments do those things and whether municipalities cater for those that I mentioned above.

Our committee visited the Eastern Cape and it was led by its chairperson, Maine, and the hon member, Henrietta Makopani. I nearly attributed the chairmanship to her while in fact she was our Whip during that period. It is thus a pleasure for me to be part of this debate regarding the Eastern Cape report because the findings are applicable to other provinces as well, including those that we have not yet visited.

The IFP focuses on human rights principles which are based on caring, ensuring that one looks after one’s neighbour as one would look after oneself without criticising and looking at one’s personality or at whether one is humble, poor or disabled. It focuses on ubuntu, which informs everyone that one is a person through others. In Nguni, we say a person is a person through others. We also say that even if one has blemishes, one’s family still loves one. Also, God’s word says, ``Allow the children to come to me’’. That means that children are invaluable and we should look after them.

During our trip, we noted the extent to which those things that we observed dealt with ubuntu and focused on caring for the youth, children and everyone in that province. What we observed was that in terms of educational arrangements, the schools were not ready. The school buildings were not suitable for wheelchairs. I have already mentioned that what we observed is not restricted to the Eastern Cape but is applicable to other provinces. The teachers are not adequately trained to understand that they should be able to work with the disabled in those schools. Are they ready for that? All those are things that need to be taken care of.

In many buildings, including the legislature, there are no parking bays that are reserved for the disabled, so that while I was in the company of two hon members, there was no area with the sign of a wheelchair to indicate where they could park. Such parking spaces did not exist. That is not limited to the Eastern Cape, it is also prevalent in other areas.

I would like to focus more on that matter and mention that the issue of parking spaces really makes one sad because we have noted that it also extends to shopping complexes. When there are six parking bays, one finds that they are occupied by able-bodied drivers who do not want to make way for those who should be using that space. They should make way for our children, grandchildren and the people who are supposed to use those reserved parking bays. Such actions make our children suffer. They cannot park their cars in places that are far from the designated areas while we, the able-bodied, occupy their parking spaces. I have already mentioned that all provinces have those problems. The Eastern Cape is no exception.

We also visited a certain school which had disabled learners. They are not sponsored. They rely on fees from parents and donations. They have found a site on which they are going to build a school. That made us very happy. We therefore pray for them so that they will get more donations which will assist them.

I want to commend a car factory which employs many disabled people. We found out that it employs many disabled people. We really applauded them for that because we felt that they were functioning in accordance with the principles of this House of creating opportunities for people so that they are employed.]

At this point in time I want to mention the problems that we identified. One of the questions that we asked was whether the premier had been informed about the lack of co-operation from the department. Problems identified were, one, lack of capacity in the office to co-ordinate and monitor these policies; two, lack of a provincial strategy to implement the programme; three, delays by the Departments of Education and Health to establish a disability unit; four, unavailability of sufficient funds; five, ineffective interaction with the premier; six, lack of co-ordination of rural development, which is close to our hearts; seven, no disability audits have been conducted within the Government department; and eight, lack of understanding of the reason for the Office being placed within the premier’s office.

Our recommendations were: one, that the provincial Action Plan for Children be relocated to the premier’s office; two, that budgets be allocated to the programme so as to enable it to function properly; three, that the Integrated National Disability Strategy be provincialised to ensure that it responds to the immediate needs of disabled people.

If I may pause here, I just want to mention that it would be helpful for these provincial programmes and funds to be monitored by provinces.

Uma ngingase ngisheshise ngisho ukuthi kubuhlungu kabi ukubukela laphaya abantu besuka emakhaya bengenazo izinto zokuhamba, bethwalwa ngamabhala uma beya emholweni ngoba izimoto zingakwazi ukufika laphaya phansi. Amatekisi ayabadlula uma bebona ukuthi bazothatha indawo eningi, uzothatha izihlalo ezimbili umuntu eyedwa. Ngakho-ke izimoto azilungiselelwe ukuthi zingakwazi ukuthwala abantu abanalezi zidingo. Esikhala ngakho ukuthi mabakwazi ukunakekeleka ikakhulukazi ezintweni zokuthutha. Izinto zokuthutha azikho esimeni ngaphandle kokuthi umuntu aze aqukulwe. Akakwazi ukungena nge-wheel chair ahlale ebhasini noma etekisini lize limbeke kuleyo ndawo ngoba akulungiselelwe lokho. (Translation of Zulu paragraph follows.)

[I would like to state briefly that it is very sad to see people making their way from their homes without proper means of transportation. They are loaded onto wheelbarrows when they go to collect their pension grants because cars are inaccessible. The taxis just do not bother to pick them up if the driver thinks that they are going to take up more space - two seats for one person. Vehicles should therefore be built in such a way that they can transport people who have such needs. We appeal that those people should be taken care of, particularly when it comes to transport. Vehicles are not accessible to such people and they have to be hoisted up. They cannot get onto a bus or taxi or travel to their destination because vehicles have not been designed to accommodate them.]

The IFP supports the report and also recommends that such visits be extended to other provinces. [Applause.]

Mr C M MORKEL: Chairperson, colleagues, I want to start off by saying that the role of this committee is provided for in terms of the Joint Rules of Parliament, Rule 132(d). We have the task of monitoring and overseeing probably the three most important sectors in our society, to evaluate whether we are making progress with reconstruction and development in this country with regard to children, youth and people with disabilities.

As hon members have heard, there was motivation for our visit to the Eastern Cape at various levels. What have emerged from the report, as hon members heard from colleagues of mine earlier, are some stark realities.

I want to start off by highlighting not the problems and weaknesses that we identified but the recommendations that the committee has made. These recommendations reflect not only on the work of this Joint Monitoring Committee, but also that of Parliament in its entirety.

The recommendations reflected in the report include the following: One, that the name and status of the Standing Committee on Youth, Gender and the Disabled in the Eastern Cape legislature be changed to reflect its importance; two, that the provincial plan of action for children be relocated to the premier’s office; three, that budgets be allocated to the programme so as to enable it to function properly; four, that the Office on the Status of Persons with Disability be staffed immediately to ensure that it is well-equipped to respond to the needs of disabled people; five, that the Integrated National Disability Strategy be provincialised to ensure that it responds to the immediate needs of disabled people; six, that an awareness campaign led by the standing committee, inclusive of the Department of Education, be established; seven, that amendments to the promotion of youth affairs be fast-tracked; eight, that the amendments in the above-mentioned recommendation must include the implementation of a reduction in the number of commissioners the province in their terms of office; nine, that the restructuring of the provincial Youth Commission be accelerated; ten, that the role of the premier’s office be emphasised to public servants serving in that office, and that the standing committee explain to them their political responsibility; eleven, that the standing committee concentrates on implementation and allocation of budgets to the programmes it is responsible for; twelve, that the standing committee no longer deals with junior officials but with heads of departments in that province; and thirteen, that the standing committee monitors all departments, not only the ones closely linked to it.

All this sounds familiar, because we sometimes face the same challenges here at national level. The Joint Monitoring Committee sometimes faces the very same challenges in terms of the seriousness with which it is taken by Parliament, other parliamentary committees and our national departments and relevant portfolio organisations.

I mention this simply because if we as a committee dealing with children, youth and people with disabilities are not taken seriously by departments and other committees, then none of these recommendations are going to mean anything. We would have wasted our time visiting the provinces. However, I know that in the committee we agitate and moan and groan, but we do so with good intentions.

I want to thank Mrs Joyce Witbooi, who is now being transferred to the Western Cape legislature, for having gone on the study tour. I did not have the pleasure of going on the study tour. I am therefore not going to attempt to give anecdotal references out of the report. I would be lying to hon members if I attempted to do that.

However, the report makes it very clear, and I would urge all colleagues, especially the hon members from the Eastern Cape, please to examine this report and see the methodology that we adopted and figure out, in their own provinces, how they can improve the quality and status of children, youth and disabled people in their provinces. [Applause.]

Mr M I MOSS: Chairperson, I dedicate this speech to the disabled people in our country and in memory of Steven Grové, a former member of Parliament from Mpumalanga who is not with us anymore. He passed away at the beginning of this year. With June being the month of the youth, I also dedicate my speech to the young people of our country and the disabled youth in particular.

As stated in the report, this is the first of many provincial visits that the Joint Monitoring Committee on Improvement of Quality of Life and Status of Children, Youth and Disabled Persons undertook. The decision to visit the Eastern Cape was based on the fact that they have a standing committee similar to the one we have here in Parliament, ie the joint monitoring committee, and to meet with the people in the Office of the Status of Disabled People to establish a working relationship and monitor the programme and policy implementation of the Integrated National Disability Strategy.

We encountered many problems and the sad part is that many of these problems have not been resolved. In the same breath, I have to say that there is a willingness and commitment to address these problems and obstacles, and improvements have already been made in this regard.

The Eastern Cape, being one of the poorest provinces, is faced with the huge task of addressing the needs of the disabled adequately, not to mention the fact that resolving the problems is in itself a task that will take many years. But work in this regard has started.

During our visits we encountered immediate problems. At the legislature there is a ramp that leads into the building. But on our way to the committee room where we met, I had to be picked up and carried in my wheelchair. There was only one person working in the Office of the Status of Disabled People. Because the inaccessible building, the person was isolated and had no physical access to the office of the premier. A staff member has since been assigned to this person and there is now much better co-operation than there was before we went to the Eastern Cape.

At the time of our visit many pensioners and disabled people were not getting the grants that were due to them. Because of problems such as corruption and ghost pensioners, many disabled people who were eligible for grants had their grants discontinued. As a result, many of these people took the provincial government to court to restore their right of access to the grants that were discontinued. The court ordered that the disabled people be reinstated in the system. The Government further decided to pay back the arrears by making R2 billion available in this regard.

In line with the call made by the President on 8 February 2001, where he called for justice for all vulnerable groups, including disabled people, the Deputy President, in Port Elizabeth on the occasion of the International Day of the Disabled on 3 December last year, shared with the audience an experience he had had during a visit to a rural area in the Western Cape. He came across a physically disabled person and wanted to know from the officials present why that person was not getting his disability grant. He was told that the person was not on the system and it would take some time before he could get the grant due to him.

The Deputy President told them that he could see for himself that the person was physically disabled: what did he still need to do to get a grant? The Deputy President said that he demanded on the spot that the person be given a disability grant. Within a week that person got his disability grant, and even the arrears were paid to him. [Applause.]

The Monday after the International Day of the Disabled my colleague sitting there, Joe Mzondeki, was contacted by many disabled groups. The hon Mzondeki is the chairperson of the Federal Council for the Disabled. The council, together with the Department of Social Development, co-operated to form an assessment panel that deals with and addresses the backlog of those who were denied grants.

A disabled doctor in the Eastern Cape offered to assist by offering his services. The Eastern Cape province also implemented a programme whereby public buildings were converted to become disabled-friendly. These buildings include hospitals, clinics and schools, which is where people get their grants.

We came across a problem at the hospital where the ramp was wide and big enough for a wheelchair, but too small for a stretcher, which is used to transport patients in and out of the hospital. The unemployed youth were targeted to do the jobs of converting these buildings and, in the same process, jobs were created and their skills were developed. The above were all in line with the President’s call in the Vuk’uzenzele and Letsema campaigns.

The ANC instructed its members and branches to go full out in their communities and constituencies to ensure that any person who is eligible for a grant or pension gets it. Further good news which emanated from our visit to the Eastern Cape is that the MEC for Housing committed himself to the principle of public participation by involving disabled people in the housing project. The disability desk in the Premier’s Office is now part of a project management scheme that will comply with the required standards to ensure that 5% of all houses to be built in the province will be disabled- friendly.

We also visited institutions for the youth and disabled persons. In Cradock we visited a multipurpose centre which was built with the help of the provincial youth commission. It was fully utilised by the youth for the various programmes, to enhance their skills.

The Tsolo Special School for the Mentally Disabled was also visited. The vision of this school is to raise the level of self-esteem of mentally disabled children through education and training, as well as practical skills. Through its mission statement, the school is committed to working in partnership with all stakeholders, to ensure that each learner receives the best possible education. The school also experiences its fair share of problems, such as a shortage of staff, lack of electricity and accommodation.

As part of our oversight and monitoring role, as members of Parliament, this visit enriched us and gave us a better understanding of how to further engage our constituencies and communities on the ground.

My kollega Vincent Gore aan die ander kant van die Huis het ‘n goeie toespraak gelewer, maar waarmee ek nie met hom saamstem nie, is die feit dat hy sê: Daar is baie min in hierdie Parlement gedoen. Ek was ‘n raadslid voordat ek ‘n LP geword het, maar ek kan nou sê dat ek hier ten minste in my eie stoel sit. Ek hoef nie opgetel te word om in enige komitee te gaan sit om deel te neem aan gesprekke nie. [Applous.] Ons regering het ‘n baie goeie beleid daargestel vir gestremdes. Dit tel onder die bestes in die wêreld. [Applous.]

Daar is ook ‘n afdeling gesetel in die Kantoor van die President wat ‘n duidelike indruk skep dat die Regering is ernstig om die lot van die gestremdes aan te spreek. Die gestremdes het byvoorbeeld selfs ‘n eie Minister wat ook ‘n teken is dat die Regering ernstig is. Daar is ‘n spreekwoord wat sê dat mens by die huis begin. In ons Parlement het ons baie gestremdes - die meeste van alle parlemente in Afrika, inteendeel, selfs die meeste ter wêreld. Baie van ons gestremde lede hier het baie werk gedoen as gestremdes. (Translation of Afrikaans paragraphs follows.)

[My colleague, Vincent Gore, on the other side of the House, delivered a good speech, but I do not agree with what he said when he stated that very little was done in this Parliament. I was a councillor before I became a MP, but I can now say that at least I am sitting in my own chair here. I do not have to be picked up in order to go and sit in any committee to take part in discussions. [Applause.] Our government has developed a very good policy with regard to disabled people. It is amongst the best in the world. [Applause.]

There is also a department in the Office of the President, which clearly indicates that the Government is serious about addressing the plight of the disabled. Disabled people even have their own Minister, for example, which is also a sign that the Government is serious about this issue. There is a saying that one must start at home. In our Parliament we have a lot of disabled people - more than any other parliament in Africa, actually, even the most in the world. Many of our disabled members here have done a lot of work as disabled people.]

Kunzima kubantu abakhubazekileyo phaya ngaphandle, kwindawo abahlala kuzo. Akukho zindlela zakuhamba abantu. Nezithuthi azibancedisi abantu abakhubazekileyo. Kambe namhlanje, siyakwazi ukuthi uRhulumente wenze imithetho ethile encedisana nabantu abakhubazekileyo. Ke, le yimisebenzi emihle eyenziwe nguRhulumente. Ngoko ke, ndiyayamkela le ngxelo. [Kwaqhwatywa.] (Translation of Xhosa paragraph follows.)

[Disabled people experience problems out there where they live. There are no roads. The modes of transport that they use do not consider the needs of the disabled. But, today we are proud to say that the Government has passed some laws that are aimed at assisting disabled people. This is indeed, some of the good work that the Government has accomplished. Therefore, I welcome this report. [Applause.]]

Miss O N MNDENDE: Madam Speaker and hon members, I firstly wish to remind this House that poverty is estimated to affect 22 million people in this country. This is a staggering and horrifying state of affairs. At times it is difficult to picture this for oneself when sitting in this House. For that very reason, it is vital that members of Parliament go on visits to experience, first hand, the conditions that our people are living under.

It was, therefore, very important that this committee should undertake visits such as these, since it is, sadly, the case that children, the youth and people with disabilities are often the first and greatest victims of poverty. As it is, the Eastern Cape is known to be the poorest province in the country and, therefore, the issues I have raised above with regard to this report are of particular relevance there.

I would like to highlight some of the problems and weaknesses that were identified by the committee during its visits. The Office of the Status of Disabled People made a presentation to the committee. The problems which we identified were as follows: lack of capacity in the OSDP to co-ordinate and monitor policy; lack of a provincial strategy to implement the Integrated National Disability Strategy; delays at the Departments of Education and of Health to establish a disability unit; and the nonavailability of sufficient funds. I do not want to repeat the problems and weaknesses identified by all the stakeholders during our visits. I believe that the above-mentioned list provides a good example of the type of issues at stake here.

Somlomo, ezi ngxaki sithetha ngazo apha, ukuba siyaqonda, sofumanisa into yokuba ziingxaki esithi sizibone zisenzeka ezidolophini. Umbuzo ke ngoku ngowokuba xa ezi zinto zisenzeka ezidolophini, kubeka phi ezilalini?

Sele zithethile ke izithethi ebezingaphambili ezifana nohloniphekileyo uMnu Moss. Siyeva ukuba ngoku kuthethwa ngeerempu ezingekhoyo phaya ezidolophini nasezibhedlele, kwanangeelifti ezingasebenziyo. Kambe ke, umntu wasezilalini akazi kwaloorempu naloolifti kuba kaloku ezi zinto azikho. Xa izinto zimaxongo ezidolophini kubeka phi ezilalini? Ngathi ke ngoku kufuneka khe sibe ngathi sitsala iintambo phaya ezilalini.

Zithethile izithethi ebezingaphambili zithetha ngezitulo ezinamavili ezingekho ndleleni. Kuba kaloku iindlela zinezigingqi, kwa eso situlo sinamavili asikwazi kusebenza ezilalini. Ukuba ubani uyaya ezilalini - kufuneka siyile kuba kaloku indaba yotyelo ayikholi - uya kuqaphela ukuba kusetyenziswa izileyi xa kufuneka kuthuthwe abantu abangakwazi kuhamba ukuze baye kwamkela inkamnkam. Bakhweliswa ezileyini nasezikiriveni kuba kaloku ayikho enye indlela yokubasa kwiindawo ekwamkeliswa kuzo inkamnkam.

Ngaba singamalungu ePalamente sithini ngale meko? Masikhe simke ngoku siyishiye idolophu siye phaya ezilalini. Nabo bakufutshane nedolophu bathi babe nazo ezi zitulo zinamavili, ubani uya kufumanisa ukuba esi situlo asikwazi kwa ukuphuma apha eyadini yasekhaya kuba kaloku kukho izigingqi, akukho zindlela. Kufuneka siyijonge yonke loo nto leyo.

Usizi lwento kukuba nokuba sebede bayifumana inkamnkam aba bantu, kufuneka ukuba bethabathe kwakule mali baqeshe iinqwelo-mafutha iistallion baye ezidolophini baye kutshintsha iitsheke. Bathi ke bapakishane ngemva kwezi nqwelo-mafutha, becutha kule mali, kuba kaloku kunyanzelekile ukuba baqeshe inqwelo-mafutha ukuya edolophini nokubuyela ezilalini. Ubani angafumanisa ukuba naloo mali bathi bayifumane ithi iphume apha phakathi kweminwe.

Yiyo ke loo nto ndisithi makhe siye phaya ezilalini, siziyeke iingxaki zasezidolophini kuba noko zona zingcono, siye kujonga ukuba asithethi lwimi bangaluqondiyo na xa sithetha ngeerempu, izitulo ezinamavili, neelifti, njalo njalo. Sithetha isiGrike kubo kuba ezi zinto abanazo.

Yiyo ke loo nto ndisitsho ukuba makhe sishiye idolophu sibheke phaya ezilalini kuba kudala sithetha. Abantu banxunguphele phaya ezilalini, basithela nqa xa sisithi iimeko zingcono. Kambe noxa kunjalo, siyavuya kuba siyawubona umahluko. Ngoko ke i-UDM iyayixhasa yonke le ngxelo. [Kwaqhwatywa.] (Translation of Xhosa paragraphs follows)

[Madam Speaker, the problems we are talking about here, it will be noticed, are problems that we see in urban areas. If these problems are being experienced in cities, how much more acutely are they experienced in rural areas?

Speakers like the hon member Mr Moss have already spoken. We hear that now there is talk about ramps that have not been erected in towns and at hospitals, and about lifts that are out of order. Persons who live in rural areas do not know about ramps and lifts because there are no such things in their areas. If we say things are bad in towns, how much worse are they in rural areas? I think we should pull up our socks and work even harder in rural areas.

Speakers before me spoke about wheelchairs. Because roads are uneven and full of potholes, even those wheelchairs would not work in rural areas. If one were to visit rural areas - we should go on visits because seeing is believing - one would notice that people use sleighs as a means of transport for people who are unable to walk to pension pay points. They are being transported on sleighs and wheelbarrows because there is no other means of transport to pension pay points. As members of Parliament what do we say about this situation? Let us leave towns and go to rural areas. Even the people who have wheelchairs and live nearer to towns have difficulty even getting out of their yards in those wheelchairs because of potholes. There are no roads. We should really look at this.

It is sad that even those who have received their pensions have to hire transport, like stallions, to take them to town to cash their cheques. People are packed into the back of these vans, reducing what little they had even further because there is no other means of transporting them to towns from their homes. It is not uncommon to find that in the long run all their money has been spent before most of their needs have been met.

That is why I say that we should visit rural areas and find out whether people do understand when we talk about ramps and wheelchairs and lifts and so on, and leave towns and cities for a while because their problems are not as great. When we talk about these things to them we might as well be talking Greek, because it is totally new to them.

That is why I suggest that we pay visits to rural areas because we have been doing too much talking. People in rural areas are anxious, we leave them wondering when we say that things are better. Even though it might be the case, we are glad somehow because we can see the difference. Therefore, the UDM supports this report. [Applause.]]

Mrs R M SOUTHGATE: Madam Speaker, the report has thrown some light on the quality of life of certain groups of people in the Eastern Cape. Given its status, as the poorest province in the country, it is even sadder as one reads the reports about a low level of service commitment from public officials.

The report mentioned instances where people took the initiative to make a difference in their communities. One such group is the five women of Masiphathisane club who got together to fight poverty in the area. They started out with one sewing machine and a monthly contribution of R60 in order to build up capital. They subsequently received a donation from Government which they used to buy two more machines. Their aim is not to rely on hand-outs but to support their business through the profits that they make. Although they were struggling, they showed courage in order to continue.

This is an example of the care-giving spirit of people who, irrespective of the odds stacked against them, will seek to change the environment. What is sad, however, is their inability to sell the things that they make. That means, in other words, that the initiatives started by people do not usually translate into satisfactory rewards. This seems to be one of the contributing factors that impact on the living standards of the people in the Eastern Cape.

The greatest problem within the province is the inability to provide and sustain infrastructural support. The lack of interest and moral commitment from Public Service officers imply that many of the concerns that affect the disabled, children and the youth remain unattended to. President Thabo Mbeki has recently intimated that urgent assistance to the Eastern Cape must enjoy priority.

The report has shown that there are institutions that desire to improve the lives of people in the region. All they lack are the basic resources, co- operation from provincial officers and a sustainable service to take care of minor maintenance work and repairs.

Regarding the report of the summary of the response of the MEC for Social Development to the issues raised by the committee, the MEC’s response was simply not encouraging. There is no indication in the response that meaningful changes can be expected in order to raise service delivery standards. If one can read anything into that response, the province is in a far worse position than can be measured. There is an urgent need for greater leadership and vision, which are required to get the province out of the sad state that it is in.

Mr I S MFUNDISI: Madam Speaker and hon members, the Constitution of this country makes it very clear that no person should be treated in an unbecoming manner. But, on a regular basis, we experience difficulties which are encountered by people who fall in the category of children, the youth and disabled persons. Issues such as reaching for the working level of an ATM, let alone the usually high counters of banks, place these people at a disadvantage all the time.

The visit by the committee to the Eastern Cape brought to light that the province needed guidance in a number of areas. The committee also noted that the province was hard put to interpret some legislation passed by Parliament. We feel that there is a need to visit other provinces on similar fact-finding missions.

That the province is one of the most impoverished is not in dispute. That there is a higher level of illiteracy in the province is not in dispute either. But, the appointment of officials who lack an understanding of the situation in the premier’s office, has to be frowned upon. The Office of the Premier has to take the lead in all Government initiatives. The policy of Batho Pele has to be just that, ie service to the people. This high office should be staffed with high calibre officers who have a passion for their work.

The recommendations made by the committee have to be heeded, implemented and constantly monitored, particularly the one on popularising mainstreaming in education. We are in full support of the recommendations that emphasise the devolution of powers to the provinces on matters relating to these vulnerable groups of people. After all, problems around children can be resolved locally.

The UCDP supports the adoption of this report.

Miss S RAJBALLY: Madam Speaker, we are aware of the conditions that people live in. Government is working hard to correct and change that. South Africa, as in the rest of Africa, has not been spared the ill-fate of poverty. Our visit to the Eastern Cape made that quite clear. Poverty exists like an epidemic and eats at our people. It keeps them from development, advancement and, most importantly, a better life. Illiteracy, poor living conditions, ill-health and underdevelopment are but a few of the calamities that we found the Eastern Cape to be suffering from.

Shocking conditions left us dumbfounded with the reality that an earnest need to address community needs was far more urgent than we had thought. The actual visit and ability to be part of the entire Eastern Cape situation made the reality even more immediate. It was horrific to see the hardship, conditions and lack of services those people live with. Disability projects have not been monitored as a result of financial constraints.

The MF recommends that the Government should earnestly address the situation in order to assist this area as a matter of urgency. However, it is noted that this need for urgent assistance and poor standards of living are experienced throughout South Africa. There is a need for us to pull up our socks and address the needs in our areas more efficiently. That is a must. Our Government is trying its best to improve the lives of our people, especially the disabled.

We have just completed the discussion of Votes. Hopefully, the allocations for resources for better living standards will be utilised effectively. It is hoped that a great improvement will be noticed on our next visit. I believe that that is in progress now.

The MF supports the adoption of this report. [Applause.]

Mr S L DITHEBE: Madam Speaker, hon members, I rise in support of this report on the Eastern Cape, in respect of the terms of reference referred to by previous speakers.

Our report is a sign of determination to hold the executive accountable and to tell no lies and claim no easy victories, but to expose lies and difficulties wherever they are found. This we do in order to hold ourselves accountable in our undying quest to lend a hand in pushing back the frontiers of poverty and creating a better life for all.

I now turn to children and the youth of our country who continue to benefit directly and indirectly from child support grants and pensions for the aged. The President and the Minister of Finance announced earlier this year an allocation of R2 billion to cater for unpaid grants over an indefinite period of time, and increases of R20 and R50 respectively. We are, however, accurately conscious of the obstacles, which are infrastructural and administrative, that are faced by some of our people in areas such as Butterworth, at pay points. This point has been mentioned by previous speakers.

However, there are other success stories in this second poorest province of our country, such as the Cradock multipurpose youth centre which is well equipped and should be optimally utilised to promote multiskilling of our youth. To that end, we call on the Umsobomvu Youth Fund, in collaboration with the National Youth Commission and the Eastern Cape provincial youth commission, to preserve that centre as the Umsobomvu Youth Fund is preparing to announce the winner of the R40 million youth development centre’s tender sometime this year.

It is also encouraging to note that, in a recent report on disability equity in the South African Public Service, the Eastern Cape provincial government was one of those that responded on time to the research which was conducted by the Public Service Commission, regarding disability equity. This will provide all our provincial and national departments with an opportunity to review their contribution to national targets, with regard to disability equity.

The Eastern Cape now stands to benefit from the findings of that research. Those findings were recently made available to our Joint Monitoring Committee on Improvement of Quality of Life and Status of Children, Youth and Disabled Persons. Allow me to quote briefly from the key findings, on page 10, of the summarised disability equity report of the Public Service Commission. I am quoting on the key findings regarding skills development:

Past educational policies and empowerment practices served to discriminate against people with disabilities. The resultant impact has been a poor development of the skills base, making it difficult for people with disabilities to compete for employment. That has led to the fact that the true potential of people with disabilities is not realised.

Further, in its progress report of March 2002, the Department of Social Development revealed that it had conducted a pilot project in which the youth of King William’s Town benefited from the Fundulwazi life skills centre. I would like to quote from the findings of that report. It says and I quote:

The department has successfully piloted the youth development Fundulwazi life skills centre in King William’s Town, Eastern Cape. The centre’s adolescent development programme has an approximately 80% success rate in integrating youth in communities and diverting them from getting deeper into the criminal justice system and preventing school dropouts.

It goes on to say:

The life skills centre model in King William’s Town has been replicated in the Eastern Cape, North West, Northern Cape and Gauteng.

Within these centres life-skills training, family preservation and youth mentoring are approaches used to facilitate the revival of cultural values and address social challenges experienced by young people, such as substance abuse, the breaking up of family relations, crime and dropping out of school.

The majority of graduates proceed to do skills training or go back to school. Others are assisted to continue studies at technikons and the rest are employed at the job creation project.

These are some of the highlights that I have referred to, and I said at the beginning of my speech that I would do so in the quest to tell no lies and claim no easy victories.

Some of the speakers have, unfortunately, chosen to become the Rip van Winkles of this world; to sleep and close their eyes, preferring to see no progress, no achievements and nothing good. The hon Moss has referred to this already. In this Parliament, on a number of occasions last year and in previous years - and even this year - when we passed the Vote of Parliament, we made very passionate pleas with regard to the improvement of services for people with disabilities, and Parliament has responded.

We have seen the improvement of facilities for people with disabilities. I, myself, have witnessed many members of Parliament, regardless of their party-political affiliation, coming to the instant assistance of any of the members of Parliament with disabilities whenever they are stuck anywhere within the precincts of Parliament. I would, therefore, like to appeal to the hon Gore to realise that it does not do our country any good to prefer to close our eyes even to the good things that are done by our Government.

I would like to concur, however, that there are many limitations which we face, not only in the Eastern Cape, but also in other provinces. It is for this reason that I agree with the hon Mbuyazi that the report on the Eastern Cape must not only be seen as a postmortem on the Eastern Cape - probably in an attempt to prove that its governance has failed - but must also be understood in the context of our quest, as the Joint Monitoring Committee on Improvement of Quality of Life of Children, Youth and Disabled Persons, to visit eight other provinces.

Because of budgetary and time constraints, we are unable, so far, to undertake more than three visits per annum. Be that as it may, we are committed to doing our oversight work, and wherever limitations are found in any of these provinces, we are prepared to expose them so that we can hold ourselves accountable for improving the lives of our people in this country.

I would like to say that we must also remember that the Eastern Cape is one of the provinces that have a bantustan legacy. We have also referred here to the findings of the Public Service Commission with regard to disability equity. Having said that, I know that some of the members might be tempted to say that we seem to be inclined to blame everything on the past, ie on colonialism, apartheid, etc.

However, the past or that legacy, to the extent that it is still with us today in the form of the deficiencies and limitations referred to by previous speakers and this report of the Public Service Commission in as far as people with disabilities are concerned, is very relevant, because we must know where we come from in order to be able to redress the imbalances of the past. Those imbalances emanate from the past.

The ANC is committed to solving - and quite conscious of - the immense difficulties and challenges that we face in the Eastern Cape and in many other provinces. These are the challenges we face in pushing back the frontiers of poverty.

Problems were referred to by members with regard to people with disabilities and able-bodied people who are not able to access pay points, etc. I am quite happy that, generally, we are all agreed that the challenges referred to by members constitute the challenges that we face as a country and we need to do something about this.

If there is corruption, it will be this Government of the ANC which will expose it, as we witnessed in the recent case of the acts of corruption in the Grootvlei Prison in Bloemfontein. Government did not shy away from that and, as I said at the beginning of my speech, we will tell no lies and claim no easy victories. We will expose lies and difficulties wherever they are found.

I think if anybody in this House is still under the illusion that this Government does not care about exposing corruption or if they have a different source of information, I must inform them that it is this Government that is exposing acts of corruption. [Applause.] Of course, we are dealing with them. We do not have to be reminded to do so.

I would also like to commend the Department of Justice and Constitutional Development, which has decided, together with Unicef and Cedaw, to print a very user-friendly booklet for our children entitled ``These are your Rights’’. This is a very simplified version of the UN Convention on the Rights of the Child. We have been informed that these booklets will be made available to all children in the 32 000 schools across the length and breadth of our country. [Applause.]

Children in the Eastern Cape also stand to benefit from knowing about instruments such as the UNCRC, the African Charter on the Rights and Welfare of Children and, indeed, section 28 of our Constitution, which puts children first.

I am quite content that the trip to the Eastern Cape has exposed many challenges which we have heard about, even when the President undertook imbizos in three provinces of our country. These are challenges we dare not shy away from.

On behalf of the ANC, we support this report. We are intent on rolling up our sleeves and ensuring that we actually meet the challenges of undoing all the wrong things that have been done. [Applause.]

Debate concluded.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON LABOUR - LABOUR STANDARDS CONVENTION

Report adopted without debate.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON LABOUR - OCCUPATIONAL SAFETY AND HEALTH CONVENTION

Report adopted without debate.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON FINANCE - RSA/SEYCHELLES DOUBLE TAXATION AGREEMENT

Report adopted without debate.

CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON EDUCATION - STUDY TOUR TO CUBA

Report adopted without debate.

CONSIDERATION OF REPORT OF AD HOC COMMITTEE ON FILLING OF VACANCIES ON SA HUMAN RIGHTS COMMISSION Report adopted without debate.

    CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND
   CONSTITUTIONAL DEVELOPMENT - EUROPEAN CONVENTION ON EXTRADITION

Report adopted without debate.

    CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND
    CONSTITUTIONAL DEVELOPMENT - SADC PROTOCOL AGAINST CORRUPTION

Report adopted without debate.

    CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND  CONSTITUTIONAL DEVELOPMENT - ADDITIONAL PROTOCOL TO EUROPEAN CONVENTION ON
                             EXTRADITION

Report adopted without debate.

    CONSIDERATION OF REPORT OF PORTFOLIO COMMITTEE ON JUSTICE AND
 CONSTITUTIONAL DEVELOPMENT - SECOND ADDITIONAL PROTOCOL TO EUROPEAN
                      CONVENTION ON EXTRADITION Report adopted without debate.

The House adjourned at 11:56. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS:

National Assembly:

1. The Speaker:

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


     Bill, subject to proposed amendments, passed  by  National  Council
     of Provinces on 21 June 2002 and transmitted for  consideration  of
     Council's proposed amendments:


     (i)     Probation Services Amendment Bill [B 18B - 2002]  (National
          Assembly   -   sec   75)   (for   proposed   amendments,   see
          Announcements, Tablings and Committee Reports, 11 June 2002, p
          686).


     The Bill has been referred to the  Portfolio  Committee  on  Social
     Development  of  the  National  Assembly  for  a  report   on   the
     amendments proposed by the Council.


 (2)    Resolution of  the  Legislature  of  the  Northern  Province  to
     request  Parliament  to  change  the  name  of  the  province  from
     "Northern Province" to  "Limpopo  Province"  in  terms  of  section
     104(2) of the Constitution of the Republic of  South  Africa,  1996
     (Act No 108 of 1996).


     The Minister for Justice and  Constitutional  Development  will  be
     introducing appropriate legislation.


 (3)    The following changes have been effected to  the  membership  of
     Committees, viz:




     Public Accounts:


     Appointed: Seaton, S A (Alt).


     Public Works:


     Appointed: Blanché, J P I.

TABLINGS:

National Assembly and National Council of Provinces: Papers:

1. The Minister for Agriculture and Land Affairs:

 Annual Report and Financial Statements of the Bala Farms (Pty) Ltd  for
 the years ended 31 December 2000 and 31 December  2001,  including  the
 Report of the Auditor-General on the Financial Statements for the years
 ended 31 December 2000 and 31 December 2001 [RP 76-2002].

National Assembly:

1. The Speaker:

 (1)    First Report of the  Working  Group  on  the  African  Union  on
     Protocol to the Treaty Establishing the African Economic  Community
     relating to the Pan-African Parliament, dated 20 June 2002:


     The Working Group on  the  African  Union,  having  considered  the
     request for approval of the Protocol  to  the  Treaty  Establishing
     the  African  Economic  Community  relating  to   the   Pan-African
     Parliament, recommends that the House, in terms of  section  231(2)
     of the Constitution, approve the said Protocol.


     The Working Group reports further, as follows:


     (i)     The Protocol provides that, while the ultimate aim  of  the
             Pan-African Parliament is to  evolve  into  an  institution
             with full legislative powers, at this stage the Pan-African
             Parliament will only have consultative and advisory powers.
             Currently there is no constitutional conflict  between  the
             provisions of the Protocol and those of the  South  African
             Constitution.


             However, once legislative powers have been granted  to  the
             Pan-African Parliament, there may be  a  need  to  consider
             amendments  to  the   Constitution   and   other   domestic
             legislation.


      (ii)     Parliament  should  as  soon  as  possible  consider  the
             procedure and criteria for the composition of  the  members
             to be designated for the Pan-African Parliament.


     (iii)   The Joint Subcommittee on the Parliamentary  Budget  should
             make provision for South African participation in the  Pan-
             African Parliament.


     (iv)    The Working Group will proceed with identifying aspects  of
             the Protocol to be addressed through the Rules of Procedure
             of the Pan-African Parliament.


     (v)     The Working Group will begin to give consideration  to  the
             proposed Rules of Procedure for the Pan-African Parliament.

Report to be considered.

COMMITTEE REPORTS:

National Assembly:

1. Report of the Portfolio Committee on Transport on the South African Maritime and Aeronautical Search and Rescue Bill [B 23 - 2002] (National Assembly - sec 75), dated 19 June 2002:

   The Portfolio Committee on Transport, having considered the subject of the South African Maritime and Aeronautical Search and Rescue Bill [B 23 - 2002] (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 23A - 2002].

2. Report of the Ad hoc Committee on Filling of Vacancies on South African Human Rights Commission, dated 21 June 2002:

   The Ad hoc Committee on Filling of Vacancies on South African Human Rights Commission, having considered and examined nominations of persons to fill vacancies on the South African Human Rights Commission, nominates the following persons for appointment to the Commission:

   Full-time Commissioners

   Adv T Makhubela Mr T Manthata Dr L Wessels Ms C V McClain Mr J Kollapen Dr Z Majodina Prof R Soni

   Part-time Commissioners

   Prof K Govender Dr S Cooper Adv N Sandi Ms R Shabodien

 Report to be considered.

1. Report of the Portfolio Committeee on Housing on Visit to Mpumalanga, dated 7 November 2001:

 The Portfolio Committee on Housing, having undertaken a study  tour  to
 Mpumalanga, reports as follows:


 A.     Introduction


     A multi-party delegation from the Committee undertook a study  tour
     to Mpumalanga from 30 September to 3 October 2001. The  delegation,
     under the leadership of Ms N E Hangana, consisted of  five  members
     and two officials, viz: Ms P Coetzee-Kasper (ANC), Mr G  Schneemann
     (ANC), Mr W Skhosana (ANC), Mr B  Dhlamini  (IFP),  Mr  D  G  Mkono
     (UDM), Ms A-M Jojozi and Ms K Pasiya.


 B.      Objectives of visit


     1. To fulfil its monitoring and oversight function,  the  Committee
          intended to establish progress  made  with  the  "Housing  the
          Nation" programmes.


     2.  To  have  an  exchange  of  views  and  experience   with   the
          Legislature, Mayors of different areas, local  ward  councils,
          contractors and developers.


     3. To tour to  various  housing  projects,  such  as  the  People's
          Housing Process, Rural Housing Projects, Hostel  Redevelopment
          Projects, projects developed by women  and  other  inner  city
          developments.


     The delegation  visited  six  projects  in  different  municipality
     areas. On the first day, the delegation met with the MEC,  Mr  M  S
     Ginindza. He provided a brief outline of the future  plans  of  the
     Department to ensure that the poorest of the poor will be  provided
     shelter.  The  tour  included  meetings  with  the  Mayors  of  the
     different municipalities. Projects visited included visits to  low-
     income housing projects, a hostel project, a middle-income  housing
     project  and  a  People's  Housing  Process.  Officials  from   the
     Department accompanied the delegation, as well  as  the  Provincial
     Director, Mr S G Sono, and the Head of Department, Ms G N Sibeko.


 C.     Briefing by MEC and HOD


     Maximum participation by the people in  improving  their  lives  is
     very important. In the process of building houses, the poor  should
     be assisted financially. In the past the focus has been on  getting
     developers and contractors to build houses for the poor. The  focus
     now is on ensuring that beneficiaries themselves contribute to  the
     building  of  their  own  houses.  Training  is  provided  to   the
     unemployed  in  different  communities.  Training  is  provided  in
     respect of different skills so as to try and improve the  state  of
     affairs in South Africa.
     The RDP houses cost  R16  000  per  unit  and  the  Department  has
     determined that houses built should not  be  less  than  40  square
     metre. The Department is now focusing on ensuring that  the  houses
     built are of good quality and are sustainable.


     In the rural areas some traditional  leaders  have  approached  the
     Department  and  requested  that  houses   be   built   for   their
     communities. They emphasised that they do not want small houses  to
     be built for their people.


     1. Housing, Land and Administration


          (a) Land has to be made  available  for  building  houses,  in
              urban as well as rural areas. The Department  is  focusing
              on releasing land to  build  houses  for  the  needy.  The
              demand for houses in the rural areas  suggest  that  there
              is indeed a need for them there.  In  Mpumalanga  some  of
              the  mud  houses  cannot   withstand   the   heavy   rains
              experienced in summer. Some of the land in rural areas  is
              held in trust by Chiefs and  the  Department  of  Housing,
              Land and Administration. Projects will be given  tentative
              approval where land is a question. Land  availability  has
              been slow due to the slow pace of transfer  of  land  from
              tribal state land to municipalities.


          (b) The Department is unable to upgrade title deeds as quickly
              as it would want to because the budget allocated for  that
              purpose is inadequate.


          (c) The budget amount allocated for 2001-02 will be  spent  as
              budgeted for, as the Department is managing  its  projects
              quite well. In 2000  the  focus  was  more  on  addressing
              administrative issues. In 2001,  the  focus  has  been  on
              delivery. Most of the projects have been  delivered,  even
              those delayed due to the unavailability of land.


          (d) In 1999, the Department conducted an intensive review  and
              discovered that housing delivery  has  been  urban-biased.
              The Department is at present attempting to  address  this,
              but has not yet reached all rural areas.


          (e)  The  Department  does  approach  sister  departments  and
              requests them to assist  in  providing  services  such  as
              water, schools, clinics, etc, whenever houses  are  to  be
              built in a  particular  area.  The  Department  of  Social
              Development is also playing  a  big  role  in  respect  of
              Intergrated Social Housing.


          (f) The Department is trying to eradicate informal settlements
              by building houses in  areas  where  there  were  informal
              settlements. However, in South Africa, it is difficult  to
              remove these settlements completely, as there  are  people
              who continue to build them.


          (g) The Head of Department meets with the Premier once a month
              to discuss problems experienced within  the  Department  -
              corruption experienced within the  Department,  misconduct
              by personnel, etc.
          (h)  The  Department  has  engaged  NURCHA  actively  and  has
              outlined a programme in conjunction with them,  with  more
              emphasis on the saving scheme. An  action  plan  has  been
              drafted and is awaiting approval by the MEC and  the  Head
              of Department.  The  Department  has  assisted  NURCHA  to
              obtain an office in the province and is willing to  assist
              them financially. The purpose is to  introduce  NURCHA  to
              the communities.


     2. Nkomazi Local Municipality - Tonga East


          (a) Project Profile


              *    The project was started at the beginning of 2001  and
                   will be completed at the end of  November  2001.  The
                   local men and women are employed to build the houses.
              *    Bricks used for building  the  houses  were  made  by
                   local people. A brick factory  has  been  established
                   nearer  to  the  project  so  that  people  from  the
                   community could be employed. 35 people were  employed
                   to make bricks for a period of six months. A register
                   of skilled people is maintained so that they  can  be
                   employed in future projects.


              *    There are 900 stands in this  area,  and  the  houses
                   are 32 square metre in extent. Beneficiaries are from
                   34 nearby villages in the area, most of them work  in
                   Nelspruit and Johannesburg, some live as  subsistence
                   farmers and others have an informal income.


          (b) Water Supply and Electricity Installation


              *    A water tank was being built  for  the  community  so
                   that they can access water from it, as there  are  no
                   water taps for the community.  In  the  meantime  the
                   community is accessing water from one  tap  and  each
                   household's water supply has been increased  from  60
                   litres  per  day  to  100  litres.  With  regard   to
                   electricity  installation,  the  subsidy   does   not
                   provide for electricity installation, but electricity
                   will be installed at a later stage when  the  problem
                   between Eskom and the TED has been resolved.


          (c) People's Housing Process


              *    The Department has  initiated  the  People's  Housing
                   Process, but the process is rather slow. On 13 and 14
                   September 2001,  the  MEC  met  with  developers  and
                   discussed the designs of houses that could  be  built
                   so as  to  do  away  with  the  township  style.  The
                   proposal is that these houses be 50 square metres.


          (d) Problems experienced


              *    Due to a lack of land availability,  the  900  stands
                   that were supposed to be built, were reduced  to  473
                   stands.


              *    Water-borne sewage is very expensive  and  cannot  be
                   provided in Tonga East. The Department is  trying  to
                   get funds for a water-borne sewage system.
              *    The whole community gets water from one tap, and  are
                   waiting for the reservoir to be finished.


              *    Ventilated toilets cannot be built due to a  lack  of
                   funds.


              *    The delegation observed  that  the  toilets  and  the
                   houses are built in such a manner that when there are
                   floods, water would flood the toilets. The Department
                   has promised to rectify this.


              *    In some houses there are  spaces  between  the  walls
                   and the  roof.  The  Project  Manager  is  trying  to
                   rectify this problem. All the houses  have  a  three-
                   month retention clause,  which  will  kick  in  three
                   months after the houses have been built in  order  to
                   rectify and address loose top structures.  Mpumalanga
                   is the only province offering this service.


          (e) Positive features


              *    The  local  community  was  empowered  with  building
                   skills, having been trained in  respect  of  all  the
                   work done with regard to building the structures.


              *    The standard of living  of  the  community  has  been
                   improved, and according to the developers, they  have
                   not experienced problems from the communities.


     3. Mbombela Municipality


          (a) Kanyamazane Hostel Redevelopment Project


              The hostel has 36 family  units,  still  being  developed.
              The units come in two sizes -  33  square  metres  and  52
              square metres. 30% of the project has been  completed.  It
              is  an   emerging   contractor   that   is   involved   in
              redeveloping the hostel. The hostel  was  built  about  30
              years ago, and has to  be  renovated  to  accommodate  the
              needs of the occupants  who  wanted  to  live  with  their
              families. Only local skilled people were employed  in  the
              project, including  women.  Most  of  them  were  contract
              workers in different projects and did not  have  permanent
              employment. Occupants of the hostel will  be  given  first
              preference, and some of those employed in the project  are
              beneficiaries.  The  project  is  executed   through   the
              municipality.


          (b) Problems experienced


              There is a lot  of  vandalism,  despite  security  in  the
              hostel. Bricks, roofs and windows were  stolen;  only  the
              foundation was left and not demolished.


     4. Albert Luthuli Municipality


          (a) Jina Housing Project - Project Profile


              The project has been a success. The houses are  42  square
              metres, and 500 stands were supposed to be built.  Of  the
              500  houses  supposed  to  have   been   built,   93   are
              outstanding. 2 500 additional  houses  still  need  to  be
              built. The Housing Board has approved the building  of  an
              additional 500 houses. R8 million has been set  aside  for
              the building of these houses.


          (b) Silobela Housing Project - Project Profile


              The area  where  the  project  has  been  built,  used  to
              consist of an informal settlement and a greenfields  area.
              The project was started in  1995.  Beneficiaries  occupied
              the houses in 2000. The houses are 40 square metres.


          (c) Problems experienced


              *     The  project  was  delayed  because  the  Department
                   delayed in paying the constructor payment due to him.


              *    Poor people do not meet the  requirements  needed  to
                   be able to gain access to the subsidy. Some  of  them
                   are unemployed. The stands of the applicants who  did
                   not meet the requirements, are standing vacant.


              *    Some households do not  have  electricity  and  taps;
                   those without taps use communal taps.


     5. Middelburg TLC


          (a) Background


              *     Since  1994,  housing  projects  have  been   funded
                   through   funds   received   from   the    provincial
                   department. In the municipality of  Middelburg  4 000
                   units have been provided. 3 500  housing  units  have
                   been provided in the urban area and 500 housing units
                   in  the  rural  area.  There  is  only  one   project
                   incomplete.  The  Municipality   of   Middelburg   is
                   satisfied with the manner in which  funds  have  been
                   utilised for these  projects.  All  housing  projects
                   were done on land offered  by  the  Council  free  of
                   charge. This enabled the stands to be  built  on  big
                   erfs or units.


              *    Currently the size of the houses built is  32  square
                   metres.   The   houses   have   water-borne   sewage,
                   electricity and installed prepaid meters.


              *    In Middelburg there is no land  owned  by  Middelburg
                   Municipality.


              *    There is a  backlog  of  houses  in  Middelburg.  The
                   Municipality has created an area called the Organised
                   Squatting Area. This was done to ensure  that  shacks
                   are built in one area. Services  in  this  area  have
                   been improved, roads  have  been  built,  electricity
                   provided, and toilets erected. Residents in this area
                   pay for their  services.  Those  who  do,  have  been
                   promised that they would be  given  first  preference
                   once the houses have been built.


          (b) Problems experienced


              *    Mine owners do not want to sell mine houses to  their
                   employees. Upon retirement, mine workers do  not  own
                   houses and they end up building informal settlements.
              *    There is privately owned land  which  the  provincial
                   Department could buy so that houses can be built. The
                   Council is unable to build houses on privately  owned
                   land.


              *    The Municipality needs more funding  to  ensure  that
                   vacant positions within the Municipality are filled.


              *    There are farm workers who are evicted and they  also
                   need houses. Because  there  are  not  enough  houses
                   being  built,  they  end  up  moving  into   informal
                   settlements. Most of them have their  own  houses  in
                   the rural areas and only need  accommodation  in  the
                   urban areas. In order to solve this  problem,  rental
                   stock should be made available so that people are not
                   forced to buy when they own.


              *    There are  people  who  sell  their  RDP  houses  and
                   return to the squatter camps. This makes it difficult
                   for the squatter camps to be demolished.


     6. Greater Middelburg Housing Project


          (a) Hope City - Project Profile


              *    The project started in March  2001  and  is  five  km
                   away from Middelburg. It is the first kind of  Social
                   Housing in Mpumalanga. The German government assisted
                   with the development of social housing in Mpumalanga.
                   A group of South Africans have attended  training  on
                   social  development  in  Germany.  The   project   is
                   financed by the Department of  Local  Government  and
                   Housing, Social Housing  Foundation  and  the  German
                   government.


              *    One unit cost about  R61  000;  disabled  people  are
                   well catered for in the stand-alone units.
              *    The community has supported the project and it is  in
                   demand amongst the communities. Land for the  project
                   was provided  by  the  Middelburg  Municipality.  The
                   Municipality played a big role in ensuring  that  the
                   project was a success.


     7. Briefing by Mayor of Delmas


          (a) Housing Development in Delmas


              *    The houses that have been delivered in Delmas are  of
                   good quality. As a result  no  complaints  have  been
                   received from the community.


              *    Land has been made available to build houses  without
                   charge.


              *    Houses built are not less than 40 square metres.


          (b) People's Housing Process


              *    The People's Housing Process in Delmas was  the  idea
                   of a woman from the community. The idea was supported
                   by the Council and the end product turned out  to  be
                   of good quality,  compared  to  the  developer-driven
                   process. When using  contractors,  few  local  people
                   benefit  or  are  employed.   The   developers   have
                   previously given the Council  problems.  The  Council
                   now supports the People's  Housing  Process,  because
                   developers are profit-driven.


              *    The People's Housing Process is generally  slow,  but
                   the Council is looking at ways of ensuring that it is
                   accelerated.


          (c) Rural and urban intergration


              *    here are people who are evicted from  the  farms  and
                   are accommodated in Delmas. Of those evicted from the
                   farms, 70 families now live  in  squatter  camps  and
                   refuse to move to the township. The Council is trying
                   to  access  land  so  that  an  Agrivillage  can   be
                   established for them.


              *    The Council is trying to establish  a  township  near
                   the hospital to ensure that people live closer to the
                   workplace.


          (d) Problem experienced


              People still continue to build shacks  next  to  their  40
              square metre houses. They cannot afford  to  extend  their
              houses.


     8. Gomasakho Housing Project - Delpark Ext 2


          The size of the houses are 40 square  metres,  and  there  are
          about 1 817 stands. The houses do not have electricity.


     9. People's Housing Process


          (a) Botleng Ext 3 - Project Profile


              This project was initiated by a woman from the  community.
              It has proved to  be  the  best  project  in  Delmas.  The
              houses were built  by  the  beneficiaries  themselves  and
              they came up with their  own  design.  The  sizes  of  the
              houses are 50 and 56 square metres. The houses are  three-
              roomed and have toilets inside the house,  a  big  passage
              and two doors leading outside.


              It is obvious from the size and quality of  the  PHP  that
              it is the best process, as  it  is  people-driven  and  as
              beneficiaries take ownership of  the  houses.  The  houses
              are of good and solid quality.


              The beneficiaries of these  houses,  when  interviewed  by
              the delegation, were  grateful  to  the  government.  They
              mentioned that when  they  lived  in  shacks,  they  never
              thought they would one day own a house.


 D.     Recommendations


     1. Houses built should be monitored properly by the  Department  to
          ensure that they are of good quality.


     2. The provincial Department should ensure that developers  do  not
          build houses that are less than 40 square metres.


     3. Communities should  be  engaged  so  that  they  participate  in
          housing projects.


 E.     Conclusion


     The Committee would like to thank and congratulate  the  Department
     of Housing and Local Government in Mpumalanga for their  commitment
     to Housing Delivery.

1. Report of the Portfolio Committee on Public Enterprises on Study Tour to Argentina and Brazil, dated 15 May 2002:

 The Portfolio Committee on  Public  Enterprises,  having  undertaken  a
 study tour to Argentina and Brazil from 14 to April  2002,  reports  as
 follows:


 I.     Background


     The government confirmed its strategic vision for restructuring  of
     state-owned enterprises (SOEs) in November 1999. This  vision  sets
     out the role of the State in the restructuring of SOEs, in view  of
     the development needs of South Africa and of  international  trends
     in SOEs restructuring. Beyond this, the President in his  State  of
     the  Nation  Address  last  year  reminded   the   government   and
     stakeholders  about  the  need  for  an  accelerated   agenda   for
     restructuring  of  SOEs.  Drawing  logical  conclusions  from   the
     President's reminder, it is therefore imperative for those  in  the
     mainstream of restructuring SOEs  to  follow  international  trends
     and perhaps adopt and adapt administrative and economic  models  or
     devices used in other countries. This can  be  achieved  by,  inter
     alia,  drawing  lessons  from  those  countries  with  respect   to
     challenges and  shortcomings  and  particular  models  utilised  by
     those countries.


 II.    Purpose


     The two countries visited, classified as developing countries  like
     South   Africa,   are   relatively   wealthy    countries.    Their
     restructuring models have served  these  countries  well.  However,
     restructuring, particularly in Argentina,  has  not  been  problem-
     free thus certain SOEs  deteriorated  and  their  poor  performance
     severely eroded confidence in the financial  sector.  The  tour  to
     the two countries  would  assist  the  Committee  in  grasping  the
     reasons for those failures so as not to repeat  them.  Essentially,
     this tour could help  the  Committee  to  familiarise  itself  with
     complexities that the other countries have  faced  and  have  dealt
     with.


III.    Delegation


     The members of the delegation were:


     1. Mr B A D Martins, MP (Chairperson of Committee  and  the  leader
          of delegation) (ANC)
     2. Mr B M Komphela, MP (ANC)
     3. Mr R J B Mohlala, MP (ANC)
     4. Ms P N Mnandi, MP (ANC)
     5. Mr M S M Sibiya, MP (IFP)
     6. Dr W A Odendaal, MP (NNP)
     7. Mr C T Thisani (Committee Secretary)


 IV.    Argentinian leg of tour


 15 April 2002


 A.     Courtesy meeting at Embassy
     The delegation received  a  briefing  at  the  Embassy  from  Mr  T
     Nyawose, Charge d'Affaires, and Mr P Pieterse,  Trade  Attaché.  Mr
     Nyawose briefed the delegation on the current crisis in  Argentina.
     After analysing the situation in Argentina,  the  mission  came  to
     the following conclusions as contributing factors to the crisis:


     1. Pegging of peso (Argentinian currency) to dollar


          The decision by the then government of Argentina  to  peg  the
          peso to the dollar on a one-to-one  basis  meant  in  practice
          that  when  Brazil  (Argentina's  biggest   trading   partner)
          devalued  its  real  (Brazilian  currency)  in  1999,  foreign
          investors and buyers found their dollars  could  buy  more  in
          Brazil than in Argentina. This led to the drying up of foreign
          direct investment and buyers of Argentine exports (beef, grain
          and other agricultural commodities) could  get  more  for  the
          same price in other countries,  particularly  in  neighbouring
          Brazil.


     2. Extensive borrowing by government


          The government of President Menem (1983-99) acquired a lot  of
          debt, both  foreign  and  domestic,  particularly  during  its
          second term. This resulted in the upward spiraling of domestic
          interest rates. The more the  government  was  borrowing,  the
          more expensive credit became for  Argentine  businesses.  This
          forced many companies to close down.


     3. Failure to balance government spending with tax revenue


          Government  expenditure  on  civil  servants  is  amongst  the
          highest  in  Latin  America.  An  estimated  70%  of  the   23
          provinces' revenue is spent on salaries  for  civil  servants,
          causing deficits in the  financing  of  basic  services.  Non-
          compliance with tax  laws  -  a  combination  of  evasion  and
          arrears - is regarded as one of the causes  of  the  deficits.
          Lengthy delays in prosecuting tax evaders and poor performance
          by the tax agency have not helped to resolve the problem.


     4. Economic recession


          The extensive programme of  privatisation  undertaken  in  the
          1990s resulted in a significant  number  of  job  losses.  For
          example, employment in the railway sector fell from 90 000  to
          less than 20 000 in 1994.  However,  according  to  the  World
          Bank, productivity in this sector increased  by  a  factor  of
          seven or eight.


          As a result of the fact that most of the privatised  companies
          were public utilities, prices for such basic services such  as
          electricity and telephones spiralled upwards. This  sparked  a
          recession which grew steadily worse as domestic  demands  went
          on a downward spiral and as more companies were  compelled  to
          lay off even more people.


          The downward spiral increased  the  debt  burden  because  the
          government's tax revenues were shrinking. On  the  other  hand
          the IMF made it clear in  mid-2001  that  it  would  not  bail
          Argentina out by making an advance  payment  on  a  previously
          agreed loan, to allow the government to  make  its  next  debt
          payment. This was after Argentina had  missed  fiscal  targets
          set out in loan agreements.


          Consequently, the three problems converged to the  point  that
          there were massive capital flights, and savers rushed  to  the
          banks late last year to convert their pesos to  dollars  at  a
          one to one rate; some even began withdrawing their dollars.


          Fearing a run on the banks, the then Economy Minister issued a
          proclamation in late November last year, limiting  withdrawals
          to US$1 000 per month. The  limits  on  cash  withdrawals,  in
          turn, hurt consumer sales already battered  by  the  country's
          four-year recession.
          The limits on cash withdrawals sparked a wave  of  uncertainty
          and anger throughout the country, which led  to  protests  and
          civil  unrest  that  often  turned  violent  and  led  to  the
          resignation of two presidents in December 2001.


 B.     Implications for South Africa


     The  financial  crisis  presently  afflicting  Argentina  and   the
     resultant financial regulations and  restrictions  imposed  by  the
     Central Bank regarding payment for imports creates an  unfavourable
     environment for doing business with Argentina.


     This might lead to a decrease in the  volume  of  bilateral  trade.
     The figure in  respect  of  bilateral  trade  last  year  stood  at
     US$426,988 million  with  Argentina  importing  US$131,730  million
     worth of goods from South Africa and exporting  US$295,258  million
     to South Africa. South African exporters will find it difficult  to
     export on the  180  days'  payment  terms  and  may  have  to  seek
     alternative  markets.  The  South  African  Reserve  Bank  requires
     payment within 180 days of shipment. Argentine companies,  however,
     have to pay only 180 days of  receipt  of  goods  (200  days  after
     shipment).


     A number of South African exporters might not be paid  for  exports
     shipped to Argentina prior  to  December  2001  (payable  in  March
     2002) because Argentine importers will not be able to pay  them  at
     the new exchange rate. Meanwhile,  South  African  importers  would
     not be adversely affected by Argentine Central  Bank's  regulations
     and restrictions.


     In his response to:


     *  What happened to the proceeds from privatisation


     *  Whether quality of service has improved after privatisation


     *  Contraband activities


     *  Any way out of the current crisis


     *  Any culture of non-payment for services


     *  Reason for selling the companies back to the state,


     Mr Petersen pointed out that before  the  peso  was  floated,  many
     industries disappeared to neighbouring Brazil. Due to  the  current
     crisis it's going to take a few years before other countries  start
     to export to Argentina. Fortunately for South Africa a good  export
     base has already been established. The current  situation  resulted
     in 20% increase in contraband activities. More  people  had  access
     to public utilities and equality of service  dramatically  improved
     but due partly to a lack of money  in  circulation  and  bad  debt,
     companies could not  repay  their  creditors.  The  government,  in
     order to reduce public debt, used the proceeds from privatisation.


 C.     Meeting with Mrs M Alexander from World Bank


     Mrs Alexander and the World Bank have been involved in the  process
     of privatisation since 1990.  Before  their  involvement  Argentina
     was embroiled in a serious economic crisis. The rate  of  inflation
     was at 3 000%. The prevailing situation offered a dramatic  setting
     for privatisation to take place. Some contributing factors were:


     *  A suffocating fiscal burden on the State (8% of GDP in debt)


     *  Less or no money for basic services


     Privatisation laid the foundation for the following:
     *  Access to water was increased by $150 million


     *  Illegal electricity connections were reduced


     *  Railway locomotives were refurbished


     *  Changes Management in ports yielded better results


     *  Reduced debt burden on the State.
     However, the following problems still lingered:


     *  A need  to  create  a  sound  regulatory  framework  to  monitor
       performance


     *  Too many regulatory bodies


     *  Many companies borrowed from Europe in dollars, and the  current
       situation left them unable to pay their debt
     *  Ever-increasing demand on public service the  demand  for  water
       is huge


     *  Costly sewage collection


     *  Inability to expand rail service


     *    Privatisation   only   managed   to   improve   the   existing
       infrastructure instead of expanding it


     *  The system was dollar-based, but  it  has  now  changed  to  one
       dollar to three pesos
     *  Protracted re-negotiations on debt owed by  companies  and  cost
       structures


     *  Tariffs at the moment are too high for the poor


     *  Some companies have reneged on their debt payment agreement.


     Proposed solutions
     *  The World Bank is currently  working  with  the  government  and
       companies on tariff impacts and tariff re-engineering


     *  The government has set up a timetable for tariff adjustment


     *  Phasing-in of tariff adjustments


     *  A Commission was set up to assist the government


     *  55 contracts are to be re-negotiated


     It is Mrs  Alexander's  opinion  that  the  dilemma  faced  by  the
     companies cannot be  apportioned  to  privatisation;  problems  are
     bound to be there regardless of whether companies  are  in  private
     hands or are state-owned. She pointed out that  the  problems  were
     there for many years and every solution applied is going  to  be  a
     long-term  one.  She  added  that  for  any  economy  to   function
     relatively  smoothly,  policies  need  to  be  consistent,  but  in
     Argentina policies change almost everyday in order to come up  with
     quick solutions.


     She also stressed a need for stronger regulatory agencies.  At  the
     moment there are too many agencies  and  a  debate  at  the  moment
     suggests grouping of similar agencies.  To  illustrate  her  point,
     that  privatisation  brought  forth  more  good  than   ills;   she
     mentioned that, after privatisation, the following happened:


     *  Social spending in the government budget improved because  of  a
       reduced deficit


     *  Debt was reduced by 16%


     *  4% GDP growth


     *  Two million people more with water


     *  Number of call boxes increased from 24 000 to 81 000
     *  Number of telephone lines doubled


     *   Although  some  problems  still  persist,  people  agree   that
       services have improved


     *  Electricity tariffs are one of the lowest in the world.


     According to Mrs  Alexander,  the  World  Bank  does  not  lend  to
     companies. It only lends money to  the  government  but  there  are
     World Bank agencies that lend money to  companies. In her  opinion,
     companies in Argentina  took  on  too  much  debt  and  not  enough
     equity. She believes that in an ideal situation the poor should  be
     protected against high tariffs but in most cases  it  is  difficult
     to determine who are the poorest. In as far as best  practices  are
     concerned, she believes that they are all around the world and  can
     be copied to suit our  needs.  She  believes  that  other  factors,
     which are bigger than privatisation, played a role in  the  current
     situation in Argentina. Privatisation, she argues, improved  a  lot
     of things, but other factors such as the legal system, tax  related
     problems, lack of trust in the government, etc, cannot be ignored.


 D.     Meeting with S Kiernan - Managing Editor: Pagina 12 Newspaper


     In  his  narration  of  early  events,  Mr  Kiernan  informed   the
     delegation that the stage was set in the 1940s  when  the  Peronist
     Party started taking over companies from private sector. That  move
     did not yield any good results, for example the telephone  services
     were the worst in the world. By the  1980s  public  utilities  were
     cheap but not easily accessible. It became evident  that  companies
     were not getting enough money to be competitive.


     The  above  situation  set  a  new  stage  for  privatisation.  The
     government started an  across-the-board  privatisation  process  in
     1990. Everything from airlines, water,  rail  and  other  utilities
     were privatised. The only things that were  not  sold,  were  those
     related to state security, such as  nuclear  stations  and  weapons
     manufacturing companies. The stated interest was  to  get  capital,
     injection and to a certain degree it succeeded. To  illustrate  the
     point:


     *  There were fewer electricity black-outs


     *  New telephones were installed and suddenly almost  everyone  had
       access to telephones


     *  The Economy was doubled in seven years.


     According to Mr Kiernan, the downside of privatisation was:


     *  Privatisation resulted in people losing jobs


     *  Unemployment jumped from 12% to 24%
     *  From day one all public utilities became expensive


     *  Foreign companies paid bribes to get contracts


     *  The regulatory framework became loose


     *  Officials were easily bribed


     *  Companies refused to offer affordable  basic  services  such  as
       water and electricity; instead they were prepared to sell to the
       government at market rate. It was left to the State to cater for
       social responsibilities.


 E.     Meeting with Mr C Cirigliano - Chairperson of 'Trenes de  Buenos
     Aires'(TBA) (privatised railroad company)


     TBA  was  formed  in  1995  after  they  had  won  a  national  and
     international bid. The president of TBA  claims  that  before  they
     took over, the service was in a bad state, and that their  aim  was
     to  meet  minimum  safety  and  comfort  standards.   Their   plans
     involved:


     *  Management of 350 of rail lines


     *  Rebuilding of 96 stations


     *  Acquisition of new electric carriages
     *  Elimination of crossings between cars and rail.


     The organisation employs about 3 000 workers. After  privatisation,
     the number of  commuters  rose  to  one  million  but  due  to  the
     recession the number has decreased to 650 000.


     On the issue of road use versus rail use,  the  chairperson  argued
     that the two should not compete but rather complement  each  other,
     as is the case in the United  States.  As  far  as  the  regulatory
     framework is concerned, he argued that the  matter  is  complicated
     and the fact that laws governing regulations were passed  about  80
     years ago without being amended, did not  help  either.  A  working
     regulatory  model  is  non-existent.  There  is  no   Minister   of
     Transport  in  Argentina;  the  company  reports  to  the  national
     regulation agency.


 F.     Meeting with TELECOM (privatised telecommunication company)


     The delegation was  met  by  Mr  A  C  Sierra,  Director:  Business
     Strategy. In his briefing he outlined the following:


     *  Telecom controls the northern part of Argentina


     *  They enjoy a seven-year monopoly, extendable to 10 years


     *  The  National  Commission  on  Telecommunication  regulates  the
       industry


     *  Telecom is owned by four consortiums (employees  own  10%)  with
       seven affiliates.


     Mr Sierra informed the delegation  that  before  privatisation  the
     company was inefficient, facilities were obsolete  and  quality  of
     service  was  unacceptable.  The  company  was  also   faced   with
     operating difficulties, lack of capital investment and  no  network
     drawings.


     After 1995 the company emerged with:


      * Increased efficiency and strong profitability


     *  Increased volume of lines and better technology


     *  More capital investment
     *  Improved customer service.


     Present situation of TELECOM


     Revenue $3,049 million


     Market cap    $2,2 million


     Employees     14 453


     Fixed lines in service   3 892 000
     Cellular subscribers     2 136 000


     Internet subscribers     257 000


     Fixed network 100% digital


 G.     Meeting with Mr M Montana, National Commission of Transport


     This Commission regulates transport activities. Mr  Montana  is  an
     expert in rail transport, with 20 years in public rail.
     As it stands at present, rail is divided into four units:


     *  Metro rail


     *  Goods transport


     *  Real estate (property management)


     *  Long haul (cancelled at the beginning).


     Metro and goods services were concessioned  after  a  national  and
     international bidding process. The role of the Commission is to:


     *  Ensure that safety standards are met


     *  Eliminate conflicts of interest


     *  Monitor conditions of service.


     Mr Montana highlighted the following achievements:


     *  An increased number of commuters (50%  of  commuters  depend  on
       metro for transport)


     *  Improved customer service


     *  Low accident rate


     *  Subways runs more efficient service


     *  Comprehensive use of the infrastructure.


     On what happened to the cancelled long  haul,  Mr  Montana  pointed
     out that road and air transport had filled the  gap  left  by  long
     haul service. He added  that  there  was  a  huge  growth  in  road
     transportation. The industry does not enjoy any  subsidy  from  the
     government but fares are fairly competitive. On rail  versus  road,
     he explained that if the two are carefully planned, both  could  be
     used profitably. Rail and road should  not  run  parallel  to  each
     other; instead they should cross and converge only at the ports.


 16 April 2002


 H.     Meeting with Parliamentary Committee on Public Enterprises


     The chairperson of this Committee is Deputy Courel. The  delegation
     was briefed by:


     *  Mr O Junion, Head of the Water Commission


     *  Mr I de Carvalho, of Planning


     *  Mr E Fernandes, Director of Structured Products.


     Innargas Briefing


     Innargas is a  $2,5  billion  a  year  gas  producing  company.  It
     controls over 1 000 km of  gas  networks.  The  company  agreed  to
     privatisation in 1992 so as to  improve  efficiency.  The  enabling
     law was passed in 1996 and at  the  same  time  the  parliament  of
     Argentina appointed a regulatory agency. The policy  objectives  of
     the agency was to:


     *  Protect the interests of the public


     *  Promote an environment suitable for competitiveness


     *  Encourage investment


     *  Ensure fair tariffs
     *  Ensure free access to gas transportation


     *  Encourage growth and diversity in the industry.


     After privatisation the industry achieved the following:


     *  Gas production rose to 160 million cubic metres


     *  Network was increased by more than 50%
     *  Six million consumers (33% growth)


     *  Investment grew to 3 billion


     *  Technology improved.


     The Chairperson pointed out that in his opinion,  privatisation  in
     Argentina was handled in the best possible manner.


     Water Commission briefing


     A framework for water regulation was started in  the  1990s.  Among
     other things, the agency  was  tasked  to  regulate  tariffs,  curb
     widespread inefficiency and corruption in the industry  and  devise
     means to counter hyperinflation started in  the  90s.  The  targets
     against inflation were met until the  recent  crisis.  As  was  the
     case with other services before privatisation, water services  were
     under the following conditions:


     *  Low water pressure


     *  Poor quality of water


     *  High rate of water contamination


     *  Management inefficiency


     *  Low investment


     *  Service rendered not measured


     *  Few people had access to water


     *  Sewage collection was low - only one sewage plant.


     Mr Junion informed the delegation that after privatisation most  of
     the problems mentioned above were  solved.  In  addition  to  that,
     since last (2001) a social tariff was introduced. He conceded  that
     there are still lot of challenges that need  to  be  tackled,  such
     as:


     *  High levels of water loss


     *  Sewage blockages


     *  Expansion of services is at slow pace


     *  Access to water services is dropping


     *  Sewage treatment is not effected as planned.


 V.     Brazilian leg of tour


 17 April 2002


 A.     Meeting with Chairperson of Committee  on  Economy  -  Deputy  C
     Sobrinho


     Deputy Sobrinho explained to the delegation the  general  structure
     of  the  Brazilian  government  and  some  aspects  of  their   tax
     collection. Pressed to comment on privatisation, he  conceded  that
     privatisation in Brazil was not handled in  the  right  manner.  He
     said that it is his view that privatisation should have  been  slow
     and gradual.


 B.     Meeting with Deputy A Rebelo, President:  National  Defence  and
     Foreign Relations


     Deputy Rebelo expressed his views on the process  of  privatisation
     in Brazil. His assessments of the process were:


     *  Brazil undertook the largest privatisation process in the  world
       in the shortest period


     *  $120 billion worth of companies were sold


     *  The desired objectives of privatisation were never realised


     *  The poor became poorer and the rich became richer


     *  There was no  effort  to  keep  some  companies  under  national
       control


     *  In the process there was substantial capital flight


     *  Some foreign companies  decided  to  close  down  and  relocated
       outside the country


     *  Lack of profit was forcing some companies to hand them  back  to
       the State


     *  The argument for privatisation was to pay  State  debt;  instead
       debt is double what it was


     *  Service from public utilities is worse than  before,  eg  access
       to telephones has increased but expenses are high


     *  Road conditions have improved, but  this  has  not  extended  to
       other areas


     *  Cargo transportation became too high
     *  Foreign capital was preferred to local capital


     *  The regulatory agencies are ineffective


     *  Companies never  bothered  about  social  responsibilities;  the
       State still shoulders an obligation towards the poor


     *   A  lack  of  clear  accountability  lines  in  the   privatised
       companies.


     On what could have been done differently, Deputy  Rebelo  suggested
     that:


     *  Strategic information and  security  systems  should  remain  in
       State hands, eg the  satellite  system  (an  important  national
       defence-related tool) cannot be under a foreign company


     *  Local consortiums should have been formed so as to take  control
       of the privatised companies
     *  Golden share (a minimal share held by the State to  prevent  the
       company from being taken  over  by  a  foreign  country)  should
       remain with the State.


 18 April 2002


 C.     Meeting at Department of Economic Affairs


     The delegation was briefed on the whole  process  of  privatisation
     since it started to the present. The briefing went as follows:


     1. Privatisation in Brazil: 1991 - 2002


          Privatisation in Brazil has completed its eleventh consecutive
          year.  From  1991  up  to  2002,  139  Brazilian   state-owned
          enterprises and  concessions  have  been  transferred  to  the
          private sector, with results amounting to US$103,4  billion  -
          when considering all the proceeds from federal and state level
          privatisation, plus the debts transferred from the  public  to
          the private sector.


          These results show the relevance of  restructuring,  which  is
          taking place within the  Brazilian  economy,  making  it  more
          efficient, productive and competitive.


          However,  more  than  a  simple  sale  of  assets  to  private
          investors, privatisation has been part of  deep  institutional
          transformation, which included the reduction of  public  debt,
          the creation of new investment opportunities, the  stimulation
          of competition and the strengthening of market mechanisms.


          Since 1995,  the  government  has  submitted  bills,  and  the
          Congress has passed laws, aimed at modelling and  deregulating
          a number of sectors, such as telecommunications, oil  and  gas
          and electrical energy.


          The Congress has also authorised the  creation  of  regulatory
          agencies   such   as   ANATEL   (telecommunications),    ANEEL
          (electricity sector) and ANP (oil and gas), which are  already
          operating in this new environment where corporate  competition
          has replaced public monopolies.


          The Brazilian privatisation programme has been developed under
          the strict eye of  Congress,  audited  by  the  Federal  Audit
          Court, and managed by a wholly  government-owned  institution,
          BNDES  -  the  Brazilian  Development  Bank  responsible   for
          implementing  government  long-term  financing   policies   in
          Brazil.


          BNDES has also collaborated with  the  efforts  of  the  State
          governments  to  privatise  their  own  companies,   providing
          technical advice and financial support.


     2. Foreign Participation


          The first  stage  of  the  Brazilian  privatisation  programme
          focused on public sector industrial  enterprises.  This  stage
          has started with the sale of  USIMINAS  in  October  1991  and
          ended with the privatisation of one  of  the  world's  largest
          mining corporations, Companhia Vale do Rio Doce (CVRD), in May
          1997.


          In 1995 the programme entered its second stage focusing on the
          concessions of public services and infrastructure -  including
          oil and gas, power utilities,  railroads,  telecommunications,
          ports, highways and banks.


          When industrial enterprises were being privatised, up to 1995,
          foreign participation in total proceeds was less than 5%.


          Once privatisation of the utilities started, the  interest  of
          foreign investors in  the  Brazilian  privatisation  programme
          increased dramatically, amounting today is much as 48%!
          A great help was the  stabilisation  plan,  Plano  Real,  that
          achieved lower inflation, to the one-digit level, and  reduced
          dramatically  the  uncertainties   regarding   the   Brazilian
          economy.


     3. Privatisation in Brazil - brief retrospect


          The impressive performance of Brazilian privatisation in  1997
          and 1998 was mainly due to the sale of TELEBRáS, the Brazilian
          telecommunications system monopoly, the electricity generation
          assets  of  GERASUL  and   several   state-owned   electricity
          distribution utilities.


          In 1999, one of the most important  events  was  the  sale  of
          COMGAS, the gas distribution company owned by the State of Sao
          Paulo, which was sold for US$988  million,  at  a  premium  of
          119%. In the electrical energy sector, there was the  sale  of
          the first two of CESP's  generation  companies,  also  in  Sao
          Paulo state.


          The year also marked the opening up of the oil and gas  sector
          to private investors; the National Oil and  Gas  Agency  (ANP)
          conducted the first  round  of  concessions,  authorising  new
          players to  explore  and  develop  new  oil  and  gas  fields.
          Presently, around 67 fields have already been conceded.


          In November 2000, the Central Bank successfully privatised the
          Banco do Estado de Sao Paulo, Banespa.  The  buyer  was  Banco
          Santander Central Hispano, with a bid 281,02% higher than  the
          minimum price, arriving at US$3,6 billion.


          Still, in 2000 the common shares of  Petrobras  that  exceeded
          government control, were sold. The shares were  sold,  through
          international public offer in the United States and in  Europe
          simultaneously,  to  a  domestic  offer  with  total  revenues
          attaining US$4,03 billion. Part of the domestic offer went  to
          312,194  individuals.  The  federal  government  remains  with
          55,76% of Petrobras voting capital.


          In 2001 the Petrobras non-voting shares owned  by  BNDES  were
          sold through a global  public  offer  in  the  United  States,
          Europe  and  Brazil.  A   total   of   41,4   million   shares
          corresponding to 3,5% of total capital were sold for US$ 806,9
          million.


          In  addition  the  Brazilian  Electricity  Regulatory   Agency
          (ANEEL) granted concessions to develop and construct new hydro-
          electric projects and new transmission lines during  the  past
          two years.


          Overall proceeds up to 24 January 2002 were  U$182,9  million.
          The amount refers to the sale of Banco do Estado  do  Amazonas
          S.A.(BEA), held on 24 January at  the  BVRJ  (Rio  de  Haneior
          stock market), acquired by BRADESCO, the only competitor,  for
          the minimum set price.


          Up to now, 139 companies and concessions have been transferred
          to private investors, with total results of more  than  US$103
          billion.


          On why other companies were not privatised, the delegation was
          informed that only those with capacity to stand on  their  own
          were privatised. Even privatised companies were not allowed to
          sell without the permission of the State; the  State  holds  a
          golden share on all privatised companies.


          The delegation met with a representative  from  the  Brazilian
          Department of Foreign  Affairs.  He  informed  the  delegation
          about the role played by MERCOSUR (a forum that oversees trade
          between Latin American countries and the rest of the world) in
          promoting trade agreements between Southern Africa and Brazil.
          The plans are being initiated by the private sector in  Brazil
          to get South Africa  more  engaged  in  bilateral  trade  with
          Brazil.


 VI.    Conclusion


     The circumstances under which the privatisation of the economy  and
     state enterprises in Argentina and Brazil were undertaken  differed
     from those in South Africa:


     *   The  democracies   of   both   countries   were   preceded   by
       dictatorships. Brazil inherited massive state debt (8% to 10% of
       GDP, vs 2% for South Africa)
     *  Government overspending was the order of the  day,  while  South
       Africa boasted strict fiscal discipline


     *  A backlog in the maintenance of public services had built up  to
       such  an  extent  that  transport,  telephone,  gas,  water  and
       electricity supply  systems  were  outdated  and  inadequate  to
       enable vigorous economic growth.


 VII.   Observations


     1. South Africa basically does not  need  to  privatise/restructure
          in order to pay off excessive state debts or  to  recapitalise
          the country's infrastructure; it can  restructure  to  enhance
          black economic empowerment, provide developmental capital  for
          future development and bring in  working  capital,  managerial
          skills, expertise and experience from the private sector.


     2. South Africa should never allow  the  wholesale  sale  of  state
          enterprises without at least retaining a  strategic  say  (the
          golden share) for the government - for the sake  of  sustained
          future development of the region and the continent.


     3. South Africa should stick to its  policy  of  fiscal  discipline
          and never allow institutions like the World  Bank  to  dictate
          its economic policy because of too much borrowing from foreign
          money sources.


     4. Privatisation of basic services,  like  water  and  electricity,
          resulted in high tariffs.


     5. Privatisation of  state  information  utilities,  like  military
          satellite systems, should be avoided at all costs to  preserve
          state security.


     6. After privatisation more people had access to  public  utilities
          and the quality of service improved, but privatisation in both
          countries resulted in job losses.

1. Report of the Portfolio Committee on Public Works on Study tour to North West and Pretoria, dated 12 June 2002:

 The Portfolio Committee on Public Works, having undertaken a study tour
 to North West and Pretoria from 1 to 10 April 2002, reports as follows:


 A.     Introduction


     In terms of Rule 201(b) and  (c)  of  the  National  Assembly,  the
     Committee is  mandated  to  oversee  and  monitor  matters  of  the
     executive authority falling within  its  portfolio.  The  Committee
     has exercised its mandate  as  required  by  the  Constitution  and
     other legislation.
 B.     Purpose of visit


     The Committee embarked on a study tour to North West  as  a  result
     of the invitation by  the  Standing  Committees  on  Public  Works,
     Roads and Transport and  Safety  and  Liaison  in  the  North  West
     Legislature. These committees were to embark on a  joint  visit  to
     unutilised and vandalised army bases in the province.


     The delegation, led by the Chairperson, Inkosi M W  Hlengwa  (IFP),
     consisted of Hosi C J Hlaneki, Mr B A Radebe, Mrs  T  P  Shilubana,
     Mr K Moonsamy (all ANC), Mr J Schippers (New NP) and Mr S  Opperman
     (DP).


     It was able to meet with the Standing Committees on  Public  Works,
     Roads and Transport, and Safety  and  Liaison,  the  South  African
     National  Defence  Director   for   Properties,   different   local
     municipalities  in  Greater  Taung,   Molopo   and   Zeerust,   the
     provincial  Department  of  Public  Works   and   local   community
     representatives, the Minister of Public Works, CIDB  officials  and
     the IDT.


 C.     Meetings with municipalities, departments and structures


     2 April 2002: Meeting with Molopo Local Municipality  -  walk-about
     Pompfret army base


     3 April 2002: Meeting with Greater Taung Municipality -  walk-about
     Buxton and Klippan army bases


     4 April 2002: Meeting with Zeerust Local Municipality -  walk-about
     Zeerust and Gopane army bases


     5 April 2002: Follow-up visit (CBPWP)


     8 April 2002: Meeting with CBE, CIDB, DPW


     9 April 2002: Meeting with IDT
     10 April 2002: Meeting with IDT


 D.     Highlights


     1. Meeting held at Molopo Local Municipality


          (a) Briefing by SANDF


              The closure of the army base in  Pompfret  was  negotiated
              with the provincial government. There is a study  document
              in the Premier's Office on the way forward  regarding  the
              situation in Pompfret. The SANDF as  a  client  department
              of the national Department of Public Works must  have  the
              inventory which must be handed over to  Public  Works.  It
              was  reported  that  the  survey  of  the  Department   of
              Environmental Affairs and Tourism indicated in  1991  that
              Pompfret was declared unhealthy for habitation,  whereupon
              the SANDF proposed that the community should be  moved  to
              Zeerust, where alternative accommodation was organised.


              We  were  informed  that  the  relocation  cost  was  R356
              million, unlike the rehabilitation plan, which would  cost
              R66 million every  five  years,  and  that  the  community
              declined  the  proposal,  which  led   to   some   members
              accepting severance packages from the SANDF.


              It was  clarified  that  the  community  of  Pompfret  had
              acquired South African citizenship, and thus the  aim  was
              also to integrate them into  the  society.  The  issue  of
              rental payments is unclear. It was  reported  that  on  21
              and 22 June 2001, the SANDF  pulled  out  of  negotiations
              with the provincial government.
          (b) Briefing by provincial Department of Public Works


              The Department of Public Works has hired  security  people
              from within the community. According  to  the  information
              at the department's disposal, the SANDF has not  submitted
              an inventory register. It  was  reported  that,  when  the
              Army vacated the base,  they  removed  all  the  equipment
              from the buildings,  including  curtains,  doors,  frames,
              etc. The base was not officially handed over.


          (c) Briefing by the Molopo Local Municipality


              The local municipality is operating  from  other  premises
              on the army base.  Communities  felt  that  they  are  now
              neglected, after being used by the previous government.  A
              satellite police station has been set  up.  The  community
              does not  believe  that  there  is  an  asbestos  problem.
              Buildings have been abandoned and  vandalised.  The  thugs
              are using the base to store stolen goods.  The  population
              living in Pompfret is about 5  000  -  even  though  those
              working  on  other  bases,  regard   Pompfret   as   their
              hometown. Community members are worried because  there  is
              an unopened building,  and  they  are  afraid  that  maybe
              there are dangerous weapons inside. Clarity is  needed  on
              this. The opinion of the local municipality  is  that  the
              government does not want to take  responsibility  for  the
              area.


     2. Meeting at the Greater Taung Municipality


          (a) Briefing by SANDF
              The  Army  base  was  previously  a  mining  area,   which
              subsequently was turned into a  military  village  by  the
              Bophuthatswana government. Buxton was closed down  because
              it was too small for the battalion to use. This  base  was
              also handed over to  the  national  Department  of  Public
              Works. The meeting was informed that on 15 June  2001,  an
              agreement  was  reached  with  the  Department  of   Local
              Government that it would take over the Buxton area.


          (b) Briefing by Department of Public Works


              The provincial Department of Public Works agreed that  the
              housing  unit  and  the  military  village  in  the   base
              belonged to the national Department of Public  Works,  but
              that the other part fell under the  Department  of  Social
              Services, Arts, Culture and Sports. When the  SANDF  moved
              out of the area, civilians occupied the village.  Criteria
              of  moving  civilians  was  discussed  -  the   allocation
              process was in  the  hands  of  the  Department  of  Local
              Government and the local municipality.  The  area  has  no
              security and some buildings are vandalised.


          (c) Briefing by Greater Taung Local Municipality


              The municipality has been frustrated since 1996,  as  they
              have tried to negotiate with the provincial Department  of
              Public Works that the property (base) area be  transferred
              to  them.  Nothing  in  writing  was  forwarded   to   the
              municipality  in   regard   to   the   handing-over.   The
              municipality continued  to  request  assistance  from  the
              Department of Public Works,  who  offered  to  secure  the
              area since assets were moved from the base. The issue  was
              also reported to the police, as  they  indicated  that  it
              was  difficult  to   investigate,   since   the   national
              Department of Public Works has not opened a case.


     3. Meeting at Zeerust Local Municipality


          (a) Briefing by national Department of Public Works


              There was no formal request by the North  West  provincial
              government to occupy these bases.  Klippan  was  renovated
              in 1996 to accommodate a farm school, but the process  has
              not been completed. The Gopane army base  was  vandalised;
              fortunately  the   provincial   government   engaged   the
              community to obtain security.
 E.     Recommendations


     The Committee recommends as follows:


     1. The Premier's office and  Department  of  Environmental  Affairs
          should  forward  the  report  on  the  feasibility  study   on
          asbestosis and the rehabilitation of Pompfret.


     2. The SANDF should submit a report of all  the  army  bases  which
          were closed in the North West Province.


     3. The national  Department  of  Public  Works  should  compile  an
          inventory and assets register for the closed army bases in the
          province.


     4. The affected provincial portfolio committees should initiate  an
          interdepartmental structure which should include the  affected
          local municipality. The process should be finalised within six
          months.


     5. There should be a minimum supply of services to  Pompfret  while
          awaiting the report, which should be expedited.


     6. The provincial government should make available the  World  Bank
          research conducted regarding Pompfret  and  the  environmental
          report in respect thereof.


     7. Report should be submitted on the intentions of  the  provincial
          government regarding  all  the  army  bases  which  have  been
          closed.


     8. The Department of Local  Government  should  submit  a  progress
          report on the allocation of houses in the Military Village and
          the transfer of Buxton Army Base to the  Greater  Taung  Local
          Municipality.
     9. The provincial  government  should  look  at  sustainability  of
          Pompfret by putting up projects and other employment  creation
          activities.


     10.     The laws of the country  should  be  respected  and  should
          apply.


     11.     The local council should  make  written  proposals  to  the
          Department of Public Works and submit copies to the  Committee
          on what they intend doing with the Buxton base.


     12.     The Committee should have a joint  meeting  with  directors
          responsible for property  management  in  the  Departments  of
          Defence and of Public Works.


 F.     Follow-up visit to CBPWP Projects


     1. Lonely Park School


          The Committee could not get inside the premises of the  school
          and see for itself what has been done to repair the cracks  in
          the foundation, because the gates were locked. It was reported
          that the foundation of the school was reinforced with tyres so
          that, should the floor expand, the  tyres  would  be  able  to
          absorb the expansion. The project was completed on time.


     2. Montshiwa Clinic


          The  clinic  has  been  completed  and  is   functional.   The
          contractor is renovating the old part of the clinic - this  is
          done with money from the amount that was  made  available  for
          the new structure of  the  clinic.  The  work  has  been  done
          satisfactorily. There were no additional  funds  sourced  from
          the government.


     3. Bophelong Hospital
          The conditions in the theatre at  this  hospital  are  getting
          worse. The roof is cracking, and the  authorities  are  afraid
          that it might collapse and  cause  injuries  to  patients  and
          workers. The airconditioning is not functioning properly,  and
          the   responsible   company   does   not   want   to    repair
          airconditioners not fitted by them. There are some areas  that
          were renovated since the Committee's last  visit.  Doors  have
          been replaced, but with  the  same  kind  of  material,  which
          probably will not last long.


 G.     Meeting with Construction Industry Development Board (CIDB)


     The board was established in 2001 and a  CEO  has  been  appointed.
     The Board is working closely with the Department of  Public  Works,
     as partners. The public is strongly represented on the  Board,  and
     the construction industry is fully behind  it.  The  Board  is  now
     ready  to  proceed  with  its  function  of  service  delivery.  At
     present,  the  CIDB  is  constructing  a   booklet   for   emerging
     contractors, for them to knowing their rights and obligations.
     State property holdings and asset management - State land  disposal
     and Asset register


     It was reported that after closure the Pompfret Army Base with  all
     its responsibilities was transferred to the province. Staff of  the
     Department  of  Public  Works  dealing  with  properties  have   no
     capacity to do their work. There are no officials who are  involved
     in the transfer of properties. This  is  a  function  of  political
     office-bearers. It is only the Minister of Land Affairs who  issues
     certificates on the disposal of land. An asset  register  has  been
     compiled and is available for MPs - information is obtainable  from
     the Committee Secretary.


 H.     Meeting with Independent Development Trust (IDT)


     The IDT would like to enhance  its  delivery  capacity,  speed  and
     scale infrastructure and experience  programme  management  skills,
     financial accountability and commitment to community development.


     1. IDT's primary purpose


          (a) To support and add value to the  national  provincial  and
              local development agenda.


          (b) To deploy its resources in the initiation and delivery  of
              innovative and sustainable development programmes,  so  as
              to make a measurable difference in the level of poverty.


     2. Vision


          To be the leading development agency in South Africa  and  the
          Region.


     3. Mission statement


          (a) The IDT, with its strategic  partners,  will  enable  poor
              communities to access  resources,  and  to  recognise  and
              unlock their own potential  to  continuously  improve  the
              quality of their lives.


          (b) The quality of our human capital.


          (c) Delivering a distinctive development product and service.


          (d) An organisational culture which is geared to learning  and
              growth.


          (e) The quality of our leadership.


     4. Role of IDT


          Since its inception, the IDT's role has shifted from a  grant-
          making agency to a programme implementation agency responsible
          for  development  planning  and   monitoring,   as   well   as
          integration and coordination.


     5. Core business of IDT


          (a) Programme Management.


          (b) Levering resources.


          (c) Delivery of capacity-building.


     6. Strategic objectives


          (a) To enhance the capacity of communities to influence  local
              development processes.


          (b)  To  enhance  the  IDT's  capacity  to  influence   client
              development planning and implement processes.
          (c)  To  establish  and  maintain  strategic  partnerships  to
              enhance development outcomes.


          (d) To deliver client outcomes.


          (e) To position the IDT to become a vibrant organisation.


          (f)  To  gear  the  resources  of  the  organisation   towards
              excellence in delivery.


     7. Public Works Programmes


          The Public Works cluster consists of programmes of its  CBPWP.
          These programmes are known as special  projects,  and  include
          the following programmes:


          (a) Clean and Green.


          (b) KZN water and sanitation.
          (c) Community production centres.


          (d) HIV/AIDS infrastructure programme.


          IDT clients


          *   Department of Provincial and Local Government.


          *   Department of Social Services.


          *   Gauteng Department of Public Transport, Roads and Works.


          *   Department of Water Affairs and Forestry.


          *   Department of Public Works.


 I.     Launch of Council for Built Environment (CBE)


     The Committee was invited to attend the launching of the CBE.  This
     Council was established by an Act of  Parliament  (Act  No.  43  of
     2000), along with six other Acts  regulating  the  re-establishment
     of the built environment professions. This Act  became  operational
     in  September  2001,  following  the  establishment  of  six  built
     environment councils.


     Council members were appointed on the strength of their  experience
     in their particular fields and their commitment to the  advancement
     of the built environment professions. They embody  the  skills  and
     experience that will add value to the CBE.


     The CBE is  established  as  an  overarching  body  for  the  built
     environment professions. Its core objectives include:


     1.  Ensuring  consistent   application   of   policy   within   the
          profession.


     2. Advising the  government  on  matters  impacting  on  the  built
          environment.
     3. Managing co-ordination between the councils to  support  matters
          of national interest.


     4. Enabling the recognition of new professions.


     5. Promoting the recognition of  different  categories  within  the
          professions.


     6. Acting as an appeal body for affected professions and  aggrieved
          members of public.


 J.     Conclusion


     The Committee would like to thank the following persons  for  their
     efforts in making the study tour successful:


     (i)     The chairpersons  of  the  Standing  Committees  on  Public
          Works, Roads  and  Transport,  Safety  and  Liaison,  Brig-Gen
          Moerane, local councillors and the Mayors  of  Greater  Taung,
          Molopo and Zeerust, officials of the national  and  provincial
          Department of Public Works and officials  of  the  North  West
          Legislature.

Report to be considered.