National Assembly - 15 November 2005
TUESDAY, 15 NOVEMBER 2005 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14:03.
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.
NOTICE OF MOTION
Mrs C DUDLEY: Madam Speaker, on behalf of the ACDP, I give notice that I shall move:
That the House debates –
1) the increasing threat of avian flu and its potential impact on
South Africa, with reference to reports that the Spanish flu
epidemic that killed more than 40 million people in 1918 and 1919
is believed to have originated as a bird virus, and reports in
recent weeks that the HN51 strain of bird flu that has jumped to
humans in Asia has been found in birds in Turkey; and
(2) whether or not South Africa is adequately prepared.
Thank you.
CONGRATULATIONS TO DR ELLEN JOHNSON-SIRLEAF
(Draft Resolution)
The CHIEF WHIP OF THE OPPOSITION PARTY: Madam Speaker, I hereby move:
That the House –
1) congratulates Dr Ellen Johnson-Sirleaf on her election as the
President of Liberia;
2) acknowledges that the election is a great personal compliment to
her and makes her the first woman to be elected Head of State in
Africa;
3) notes that Liberia has had an enormously troubled and difficult
period, which included a civil war in which hundreds of thousands
of people lost their lives; and
4) therefore wishes President Elect Ellen Johnson-Sirleaf and the
people of Liberia a successful period of peace, progress and
prosperity.
Agreed to.
NINE GOLD MEDALS WON BY SOUTH AFRICAN SWIMMERS IN DURBAN
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Thank you, Madam. I move without notice:
That the House –
1) notes that –
(a) South African swimmers won a total of nine gold medals in
the first leg of the FINA World Cup series, which was held in
Durban the past week; and
b) Olympic gold medalist Ryk Neethling won all six races he
entered and George du Rand and Suzaan van Biljon also claimed
a gold medal each;
(2) extends its congratulations to these and all other participating athletes for placing South Africa in the number one position on the medals table; and
(3) urges the South African swimming controlling body to intensify
programmes, especially in historically disadvantaged communities,
that will nurture future swimming champions.
Agreed to.
PRESENTATION TO HOST 2011 RUGBY WORLD CUP
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Thank you, Madam Speaker. I move without notice:
That the House – (1) notes that on Thursday, 17 November 2005, at 13h15, the group presenting South Africa’s bid to host the 2011 Rugby World Cup will be making their presentation to the IRB in Dublin, Ireland;
(2) encourages all South Africans to support the bid with the same enthusiasm with which they supported the successful bid for the 2010 Soccer World Cup; and
(3) wishes to assure the bid team that their success will be the country’s success since it is through events like these that we can realise the vision of a united South Africa.
Halala, South Africa, Halala! [Interjections.]
Agreed to.
SUSPENSION OF RULE 253 (1)
(Draft Resolution)
The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move the motion printed on the Order Paper in the name of the Chief Whip, as follows:
That Rule 253(1), which provides, inter alia, that the debate on the
Second Reading of a Bill may not commence before at least three working
days have elapsed since the committee’s report was tabled, be suspended
for the purposes of conducting the Second Reading debates on the Revenue
Laws Second Amendment Bill [B 41 -2005] (National Assembly – sec 75) and
the Electricity Regulation Bill [B 29B – 2005 (Reintroduced)] (National
Assembly – sec 75) today.
Agreed to.
PRECEDENCE TO ORDERS 11 AND 12
(Draft Resolution)
The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Speaker, I move:
That after consideration of Order 4 on the Order Paper, precedence be
given to Orders 11 and 12 on the Order Paper, respectively.
Agreed to.
MEMBERS' STATEMENTS
REPORTBACKS BY MEMBERS OF PARLIAMENT TO THEIR COMMUNITIES
(Member’s Statement) Ms C M P RAMOTSAMAI (ANC): Madam Speaker, this week members of Parliament will return to their constituencies to report back to their communities on their work as duly elected public representatives.
The ANC has deployed all its members of Parliament to various offices across the length and breadth of South Africa. The members of Parliament can thus report to their communities that the ANC-led government has reached 2,7 million children who are eligible for the Child Support Grant.
We have not yet reached the target set, and the ANC members of Parliament deployed in the Eastern Cape, Free State and North West must assist communities to access the Child Support Grant, since these are the areas where targets have not been reached.
Members can also report that since April 2005, 401 schools have been provided with water, 983 with sanitation facilities, and 167 with electricity.
Members of Parliament will, in turn, bring to the attention of government what the community needs and what their concerns are, and how these could be addressed. Our country is still faced with many challenges, but there is visible progress that we are indeed creating a better life for all. I thank you. [Applause.]
DECISION BY SPEAKER TO ATTEND TRIAL OF JACOB ZUMA
(Member’s Statement)
Mrs S M CAMERER (DA): Madam Speaker, the DA has noted, with dismay, the decision by Madam Speaker to attend the trial of former Deputy President, Jacob Zuma, along with other key ANC political leaders such as KwaZulu- Natal Premier, Sbu Ndebele, and members of his executive.
It was completely inappropriate, and by doing so they conveyed the unfortunate message that they dissociate themselves from the President’s praiseworthy action in firing Jacob Zuma when he was found by the courts to be involved in the Shaik corruption scandal.
The Speaker’s first duty is to Parliament, and not to factional interests in the ANC. This is particularly so, in the case of the Zuma Trial, because Jacob Zuma resigned from Parliament before he could appear before the ethics committee. An investigation into his affairs may well have found that he misled Parliament. The National Prosecuting Authority has indicated that there may be further possible charges against him in this connection.
The decision by Madam Speaker and sections of the ANC leadership to align themselves with Jacob Zuma, while at the same time claiming that government is at the forefront in the fight against corruption, reveals, yet again, the fatal ambivalence that defines the ANC, when it comes to the fight against corruption, and protecting the independence of the judiciary. [Applause.]
LESSON LEARNT BY SA DELEGATION IN BURUNDI
(Member’s Statement)
Mr J H VAN DER MERWE (IFP): Madam Speaker, the South African delegation spent some days in Burundi last week. One lesson learnt is that those who criticise South Africa for its continuous involvement in Africa should think again.
Burundi is the poorest country in the world, and there are also other very poor countries in Africa. It is therefore South Africa’s moral duty to continue to assist our fellow human beings in Africa. We need to offer them advice and assistance, as we are doing.
Many of us have houses and food and clothes. Yes, we also have poverty, but the poverty in Africa is awesome. South Africa should continue to support our impoverished neighbours. [Applause.]
RESPONSIBILITY TO MAKE ROADS SAFER
(Member’s Statement)
Mr B L MASHILE (ANC): Madam Speaker, every transport department of all three spheres of government spend or use resources to raise awareness of the importance of road safety to both drivers and pedestrians. Despite this, every day an average of 36 lives are lost and around 100 people are seriously injured due to road accidents. The estimated cost of traffic accidents to individuals, commerce, communities and the country is in the region of R38 billion annually.
Experience has taught us that, as we approach the big holiday season, the incidence of fatalities and injuries due to road accidents increases. The responsibility to make our roads safer rests with all of us. All spheres of government, as well as the private sector, should allocate the necessary resources to ensure that road safety becomes a way of life for all South Africans throughout the year.
Road users also have to adopt a positive change in attitude to road safety. The ANC calls on all our citizens to be responsible and ensure that we all arrive alive. I thank you. [Applause.]
IMPACT OF PORNOGRAPHY ON BEHAVIOUR OF CHILDREN
(Member’s Statement)
Rev K R J MESHOE (ACDP): Speaker, the ACDP is appalled, shocked and saddened by the reports from the National Childline director who says children as young as three are practising sex acts on one another because of the pornography they’ve seen on cellphones and the Internet.
Childline staff say that when they ask the children what makes them do such ugly things to other children, 90% of them say that they are just copying pornographic images they saw on cellphones. What members of the public want to know is what emergency steps government is taking to protect their children from pornography promoted via cellphones. The ACDP also welcomes the attention this matter received today in the Home Affairs portfolio committee, as well as the undertaking given by network providers to attend to this critical matter.
About two weeks ago there was a newspaper report of an 11-year-old girl who was raped in class in full view of other children by 10 and 11-year-old boys. What was even more shocking was the report that some of the boys held the girl’s arms and legs while the rape was taking place. This is totally unacceptable.
The ACDP still maintains that pornography is the theory and rape is the action. We believe the right of children to innocence and security must not only be protected by government, but must also take precedence over the so- called rights of adults with an insatiable lust for pornography to watch whatever material they want to. I thank you.
PROTECTING PUBLIC INVESTORS
(Member’s Statement)
Mnr W D SPIES (VF Plus): Agb Speaker, instellings soos die Raad op Finansiële Dienste, die Registrateur van Maatskappye, die Reserwebank en die Polisiediens het almal een gemeenskaplike doel, en dit is om die publiek te dien en te beskerm. Deur die jare is miljarde rande al deur niksvermoedende, oningeligte lede van die publiek belê in sogenaamde piramideskemas en twyfelagtige beleggingskemas. Verskeie publieke maatskappye in die naam Oude Molen is onlangs in likwidasie geplaas. Veral senior burgers het in die onderskeie skemas belê en aansienlike verliese gely uit die mislukte eiendomsindikeringskemas.
Volgens inligting tot beskikking van die VF Plus het die sogenaamde Oude Molen-groep maatskappye eiendomme, wat vir ‘n totale bedrag van slegs R3,8 miljoen aangekoop is, weer aan ‘n niksvermoedende publiek gesindikeer vir R24,7 miljoen. Toe die skema in duie stort, moes die publiek agterkom dat daar nie naastenby waarde was in die eiendomme waarin hulle ten duurste belê het nie.
Dieselfde persone wat by die Oude Molen-skema betrokke was, is steeds bedrywig in soortgelyke beleggingskemas wat reeds miljarde rande se beleggings van die publiek gelok het. Waar was die Registrateur van Maatskappye toe die Oude Molen-maatskappye nagelaat het om finansiële state in te dien? Word daar tans, of is daar finansiële state en prospektusse vir die publieke maatskappye wat met soortgelyke skemas besig is, by die registrateur ingedien?
Het die Raad op Finansiële Dienste destyds betyds stappe gedoen om die gebruik van beleggingstruststrukture, wat deur die maatskappy Sharemax Investments bemark is, stop te sit? Het die Reserwebank stappe gedoen om ondersoek in te stel na die moontlikheid dat die beleggings wat geneem word, neerkom op die neem van deposito’s, soos verbied word deur die Bankwet? Wat is die status van die bedrogklagte wat deur Prea Rhanduny, Assistent Registrateur van Maatskappye, en Willem Pretorius teen menere Willem Botha en Durand Botha gelê is?
Die VF Plus wil sien dat daardie instellings wat geskep is om die publiek te beskerm en ekonomiese stabiliteit te verseker, toegelaat word om dit te doen, al kos dit ook wat. Ons is dit aan die duisende niksvermoedende en bejaarde beleggers in ons land verskuldig. (Translation of Afrikaans member’s statement follows.)
[Mr W D SPIES (FF Plus): Hon Speaker, institutions such as the Financial Services Board, the Registrar of Companies, the Reserve Bank and the Police Service all have one common goal, and that is to serve and protect the public.
Through the years unsuspecting and uninformed members of the public have invested billions of rands in so-called pyramid schemes and dubious investment schemes. Recently several public companies in the name of Oude Molen have been liquidated. Senior citizens in particular have invested in the various schemes and suffered considerable losses resulting from the unsuccessful property syndicate schemes. According to information available to the FF Plus, the companies of the so- called Oude Molen group have syndicated properties, which were bought for a total amount of only R3,8 million, to an unsuspecting public for R24,7 million. When the scheme collapsed, the public became aware that the properties were not worth anywhere near the money that they had invested in them at great expense.
The same people who were involved in the Oude Molen scheme are still operating similar investment schemes that have already attracted investments worth billions of rands from the public. Where was the Registrar of Companies when the Oude Molen companies failed to submit financial statements? Are public companies operating similar schemes currently submitting, or have they submitted, financial statements and prospectuses to the registrar?
At that time, did the Financial Services Board act timeously to put a stop to the use of investment trust structures that were being marketed by the company Sharemax Investments? Did the Reserve Bank investigate the possibility that the taking of investments was tantamount to the taking of deposits, as prohibited by the Banks Act? What is the status of the fraud charges laid against Mr Willem Botha and Mr Durand Botha by Prea Rhanduny, Assistant Registrar of Companies, and Willem Pretorius?
The FF Plus would like to see those institutions that were created to protect the public and ensure economic stability, being allowed to do so, regardless of the cost. We owe it to the thousands of unsuspecting and elderly investors in our country.]
USING WATER CONSERVATION IN CAPE TOWN
(Member’s Statement)
Mr B M MKONGI (ANC): Madam Speaker, the recent decision by the ANC-led Cape Town City Council to partially lift water restrictions after a spell of good rain in the catchment areas in the Cape metropolitan area is welcomed.
This is an indication that the local government authorities had done much in building a partnership with the communities they serve in communicating the importance of water conservation. That communities heeded the council’s call to conserve these precious natural resources is commendable.
Our communities should, however, note that we still have to be vigilant and conserve as much water as is possible. The expected increase in water consumption in Cape Town over the holiday period will place an added demand on our water supply, and it will stand us in good stead to heed the lessons of the past months. We therefore call on all our communities, especially those who enjoy having the most access to our water resources, to use it responsibly. Thank you. [Applause.]
PRIVATE SECURITY COMPANIES GUARDING POLICE STATIONS
(Member’s Statement)
Mr P H K DITSHETELO (UCDP): Madam Speaker, if our police officers are overstretched to fight crime in our neighbourhoods, why not employ and train more officers to be effective in combating crime as opposed to the current arrangement, where our, police stations which are regarded by communities as a safe haven, are being guarded by private security companies.Our stations regarded by communities as a safe haven. What message are we sending if our own, trained policemen are not capable of guarding our police stations?
Are we not exposing ourselves to dangerous situations by employing private security companies, who are motivated by nothing else but profit? Besides that, they deploy undertrained personnel. We are not even certain whether they are locals. If so, are we not breaching our own national security guidelines?
With a reported budget of R66,5 million a year being spent on private forces we can certainly do better by recruiting young South Africans into the Police Service. Surely, charity begins at home. Before we provide job opportunities for foreigners, let us ensure that our own people are given first preference. I thank you.
REGISTERING FOR LOCAL GOVERNMENT ELECTIONS
(Member’s Statement)
Mr C M MORKEL (PIM): Madam Speaker, the Progressive Independent Movement notes that this weekend is the final opportunity to register at voting stations for the forthcoming local government elections, but highlights that voters who can’t do so this weekend may continue to register at local municipal offices until the President announces the election date.
We urge those potential opposition voters who are sick and tired of politics and the way matters are being conducted at present, especially where this results in the type of racial polarisation that takes us back to the old South Africa, to vote for an alternative opposition party so that their voice can be heard without the need to scream and shout – as the DA is doing at present – and without being compromised or co-opted - as other opposition parties have done in the past - so that we can make a difference together. I thank you. [Interjections.][Applause.]
DECLINE IN LITERACY AND NUMERACY LEVELS IN SCHOOLS
(Member’s Statement)
Mr G G BOINAMO (DA): Madam Speaker, the state of education is the single biggest crisis facing our country, and it will be the way in which the ANC government responds to this crisis that ultimately will determine the success of our democracy.
It is tragic that after 10 years of democracy our schools’ most important exit exam, our matric certificate, is not seen as a qualification in which employees and institutions can place their unreserved faith. It is for this reason that numerous employers and institutions have been forced to develop their own training-skills sources.
However, even these are not the solution. If adequate numeracy and literacy skills are not being provided by our schools, if people cannot read and write properly, they are effectively untrainable. We have to understand the root cause of the problem. The popular explanation is the need for mother- tongue education, but before we can fully understand the extent and nature or the role of mother tongue education, we urgently need proper research to find out what exactly is causing such a drastic decline in literacy and numeracy levels in our schools.
However, by refusing to investigate and research the matter properly the ANC government is continuing the politics of denial, which will have drastic consequences for the country’s future. Thank you. [Applause.]
INAUGURATION OF SOUTH AFRICAN LARGE TELESCOPE
(Member’s Statement)
Dr M SEFULARO (ANC): Madam Speaker, on Thursday, last week, the most advanced large telescope in the world was inaugurated in Sutherland in the Northern Cape.
Together with Namibia, which hosts the world’s most sensitive high-energy gamma ray telescope, this event places Southern Africa at the forefront of astronomical technology and research. The SA Large Telescope is a collaboration of the ANC-led government with German, Polish, American, British and New Zealand partners. Sixty per cent of the components were manufactured in South Africa and 60% of the construction budget was spent in the country.
The legacy of apartheid has resulted in an under-represented majority in the sciences and we welcome the initiative that has resulted as a spin-off of SALT. Amongst these is the Northern Cape education department, in partnership with the relevant bodies, that has begun an intervention in schools, targeting teachers and learners. This includes building science laboratories establishing a maths and science academy in Sutherland, and providing further training for teachers. The onus is now on the youth, especially those who live in the areas in and around Sutherland, to be inspired to broaden their horizons to include the study of maths and science.
The Freedom Charter states that the doors of learning and culture shall be opened. The creation of the SALT has opened these doors even wider. I thank you. [Applause.]
MASS GRAVES DISCOVERED NEAR SA MILITARY BASE IN NAMIBIA
(Member’s Statement)
Mr M S BOOI (ANC): Madam Speaker, the discovery of two mass graves near an apartheid era South African military base in Namibia is a grim reminder of the price paid by many in the struggle for independence. All indications are that the mass graves near Eenhana, the home base of the former SA Defence Force 54th Battalion from 1966 to 1989, contain the remains of Swapo combatants.
The ANC empathises with the people of Namibia and joins the call by President Pohamaba for those who have knowledge of this and other such incidents to reveal the truth. The Namibian government, like the ANC-led government, has adopted a policy of national reconciliation, therefore knowing the truth will assist the process. The need to know the truth is a natural element in the healing process.
Namibia and South Africa have a sad history, both having successfully overcome the same oppressive regime in the same decade. The Namibian people have a right to pay tribute to those who were killed in a fitting and dignified manner and families have a right to know what happened to their loved ones.
The ANC has confidence that our government will assist the Namibian people in resolving this very painful episode in our history. I thank you. [Applause.]
CHARGE OF SEXUAL HARASSMENT AGAINST POLOKWANE MUNICIPAL MANAGER
(Member’s Statement)
Mev D VAN DER WALT (DA): Agb Speaker, die ANC se rekord van swak dissipline is baie duidelik sigbaar in die provinsie van Limpopo. In Polokwane is ’n saak van seksuele teistering teen die ANC-aangestelde munisipale bestuurder aanhangig gemaak.
Vroeër die jaar het die ANC uitvoerende burgemeester en sy raad ’n beleid saamgestel en goedgekeur wat in werking gestel moet word in sodanige gevalle. Tog het die ANC uitvoerende burgemeester en sy raad nie die moed van hul oortuiging om hul eie beleid toe te pas wanneer hul eie ondersteuners en aanstellings ter sprake is nie.
Die ongelooflikste aspek is dat die aangeklaagde munisipale bestuurder intussen gesekondeer is na die provinsiale departement van provinsiale en plaaslike regering om vir al die munisipaliteite in die provinsie leiding te gee.
Dit het tyd geword dat die ANC-beheerde munisipaliteit in Polokwane op die DA se herhaalde versoeke om die munisipale bestuurder te verhoor en te dissiplineer reageer. Alleenlik groter dissipline van die ANC, wat al die munisipaliteite in Limpopo beheer, sal dienslewering aan die mense verbeter. [Applous.] (Translation of Afrikaans member’s statement follows.)
[Mrs D VAN DER WALT (DA): Hon Speaker, the ANC’s record of poor discipline is quite clear in the province of Limpopo. A charge of sexual harassment has been laid against the ANC-appointed municipal manager in Polokwane.
A policy that should be implemented in such cases was drawn up and approved earlier this year by the ANC executive mayor and his council. Yet the ANC executive mayor and his council do not have the courage of their convictions to apply their policy when it comes to their own supporters and appointments.
The most unbelievable aspect of this is that the accused municipal manager has in the meantime been seconded to the provincial department of provincial and local government to provide leadership to all the municipalities in the province.
The time has come for the ANC-controlled municipality in Polokwane to react to the DA’s repeated requests that, the municipal manager be tried and disciplined. Only greater discipline by the ANC, who control all municipalities in Limpopo, will improve service delivery to the people. [Applause.]]
CHRIS HANI INSTITUTE OF SCIENCE AND TECHNOLOGY
(Member’s Statement)
UMBHEXESHI OYINTLOKO WEQELA ELIKWISININZI: Somlomo, ndiphakamela ukuncoma umsebenzi omhle weSebe lezoQhagamshemlwano. Kwiintsuku nje ezingephi ukusuka ngoku kuza kube kuvulwa i-Chris Hani Institute of Science and Technology ngenxa yemisebenzi yeli sebe. I-Universal Services Agencies iye yasebenzisana noluntu lwase Kaladokhwe ukuze kusekwe eli ziko.
Yinto le eza kunceda kakhulu ukuze abantwana bethu kwakunye nabantu abadala bafunde ubugcisa bekhompyutha, nto leyo kule mihla eyimfuneko enkulu. Sinethenba lokuba lo msebenzi unje ngalo uya kunabela nakwezinye iidolophana, ngakumbi ezisemaphandleni, ukuze abantu bakowethu baxhamle ulwazi kwezobugcisa beekhompyutha kunye nezenzululwazi. Enkosi. [Kwaqhwatywa.] (Translation of Xhosa member’s statement follows.)
[The CHIEF WHIP OF THE MAJORITY PARTY: Speaker, I stand to show my appreciation to the Department of Communications for the work they have done. The Chris Hani Institute of Science and Technology will be opening soon as a result of the work of this department. The Universal Services Agency worked hand in hand with the Cradock community to put this institute in place.
This institute will help children and adult learners to acquire computer literacy skills that are important. We hope that facilities like these will be established in other towns, but more especially in the rural areas to develop people’s skills in the areas of computers and science. Thank you. [Applause.]]
The SPEAKER: In view of the IFP not having taken its slot, the ANC has another slot. The ANC is not taking the slot. We, therefore, allow the DA to take the slot.
AMBULANCE WORKERS’ LIVES ENDANGERED
(Member’s Statement)
Ms D KOHLER-BARNARD (DA): Madam Speaker, ambulance workers are an endangered species. They have been hijacked, sexually assaulted, robbed at gunpoint, threatened and had their vehicles stoned. There are too few ambulances available to meet the demand for their services and now ambulance staff have been told that they may refuse to attend to patients in cases where they feel unsafe. It is the poorer communities who will suffer. Without any alternative means to transport patients to hospital, the poor also live in the most violent neighbourhoods, terrorised by gangs and criminals.
We can’t blame the ambulance workers for feeling unsafe, but we can blame the authorities for failing to provide proper policing in these areas. Hundreds of policemen are a telephone call away when ANC bigwigs feel threatened by their own party members, but when patients are dying and ambulance workers are threatened they are alone in the face of rampant criminality. Safety is a human right, so is access to health care. When is the ANC government going to deliver? [Applause.]
The SPEAKER: We now come to Ministers’ responses. May I have an indication of who would like to speak? The Minister of Finance, the Minister of Education, the Minister of Science and Technology, the Minister of Safety and Security and then the Deputy Minister of Defence.
Mrs D VAN DER WALT: Agb Speaker, op ’n punt van orde: Hoekom wil die Minister van Provinsiale en Plaaslike Regering nie ook praat na aanleiding van my ledeverklaring nie? [Tussenwerpsels.] [Hon Speaker, on a point of order: Why does the Minister of Provincial and Local Government not also want to speak in response to my member’s statement? [Interjections.]]
The SPEAKER: Hon member, really, that is not a point of order. It is the Ministers who must indicate whether they want to respond. We can’t force them to respond.
MINISTERS’ RESPONSES
FINANCIAL REGULATION
(Minister’s Response)
The MINISTER OF FINANCE: Madam Speaker, we should avoid hollow whinges, and only respond to issues of substance.
I would like to respond to the issues raised by the hon member of the FF Plus. All financial regulation is designed with a view to consumer protection. So, whether you are talking about the Financial Services Board, or the Reserve Bank and the bank supervision department within it in particular, the object of the exercise is to protect the end user, the consumer, from abuse.
But, the systems work because you are dealing with registered institutions
- institutions registered within the framework of the law. So, if somebody sets up some bucket shop and they call it a bank and people go and invest their money there, you can’t hold the Reserve Bank accountable for that.
Similarly, in respect of the Financial Services Board, for as long as it’s a registered organisation, especially pension funds, long-term assurers and short-term insurance funds, then I think people have a reasonable expectation.
But, what we have seen in the last while is a flurry of activities, and people take their hard-earned savings and invest them in these unregistered institutions. Unless there is actually a formal charge laid, the Financial Services Board or the Reserve Bank would not automatically know about it.
We have acted against a number of these institutions, but what we can’t do realistically, is to act against the silliness of people who invest money in an organisation that promises all kinds of returns, like the leader of some party in this House, who couldn’t understand that Miracle 2000 wouldn’t be able to achieve the returns it had promised. You don’t have to be a rocket scientist or an econometrician to understand that returns like that are not possible in a rational world.
But people do this kind of thing. There is a man called Adriaan Nieuwoudt, sitting up there in Garies. People will still give him money, like they gave him money for sour milk 20 years ago. You can’t protect people against their own stupidity, and that’s part of the difficulty of financial regulation. But, on the issues you raised, the companies you raised, Sharemax and Oude Molen and so on, send me a note, I will follow it up and come back to you, hon member. Thank you, Madam Speaker. [Interjections.]
CHILD SUPPORT GRANTS; BUILDING OF SCHOOL FACILITIES; MOTHER-TONGUE
EDUCATION
(Minister’s Response)
The MINISTER OF EDUCATION: I’m amused at some of the little squeals that I hear.
Madam Speaker, I would like to thank hon members of Parliament for drawing attention to progress with respect to the registration for child support grant and its take-up by families and children in our country, and, in particular, I welcome the commitment by members of Parliament to support my colleague, Minister Skweyiya, in his ongoing drive to ensure that all the children of our country who are deserving of this grant receive it.
We are also very glad to note members’ attention to the progress we are making with respect to building more classrooms and schools for the children of our country, and to ensuring that these schools have adequate facilities. I would like to thank my colleague, the Minister of Public Works, for the manner in which she has assisted the department and the provincial public works and education departments to ensure that we accelerate progress with respect to delivery of schools.
To return to the hon member who referred to mother tongue and its place in education, let me begin by saying that to use the expression “unprecedented crisis” with reference to education is to be guilty of a terminological inexactitude. [Interjections.] I think that the hon member, Boinamo, perhaps draws his information on research in language and education in South Africa from media reports that has read in 2004.
We have, however, been reading research on language and its place in education for many decades and, in fact, there is a very old South African report which deals with the matter of language and education called the McDonald Report. I would suggest that the hon member takes the opportunity to read it. Clearly the issues of education cannot be solved solely by attending to providing access to mother tongue education for the children of our country. But it is an important component to success in learning.
If we utilise mother tongue, we need to ensure that it is utilised effectively, but it is not the sole solution in addressing the challenges in education. There are many other areas that must be attended to. So, hon member, certainly mother tongue is not the sole response, there are many areas that we certainly must address and which we are addressing.
To bewail the current problems in education and the immense challenges that there are as something that is a residue of 10 years of democracy is really to be further guilty of terminological inexactitude. The hon member would know full well from his research, which I am sure he carries out, that the funding from 1953, with the introduction of the Bantu Education Act, never supported adequate provision for education of children of the disadvantaged in this country. [Applause.]
The hon member sitting beside you may shake her head, but I suggest that you sit together in a library of a faculty of education of a good institution in this country and read research, get to understand your facts, before you commit further inexactitudes. Thank you. [Applause.]
INAUGURATION OF SOUTH AFRICAN LARGE TELESCOPE
(Minister’s Response)
TONA YA SAENSE LE THEKNOLOTŠI: Mohlomphegi Speaker, ke leboga mohlomphegi Sefularo ka ga seo a se boletšego mabapi le SALT -Southern African Large Telescope. Ke mo tiišeletša gape gore ka nnete baswa ba rena, esego fela bao ba lego Sutherland, eupša bohle mo nageng ya rena ka moka, ba thabetše thelesekopo yeo gomme ba na le kgahlego ya go ithuta mahlale a saense le theknolotši gore ba tle ba tsebe go kgatha tema mešomong yeo e hlolwago ke SALT.
Bao ba dulago Sutherland, kudu baMmasepala wa Karoo Hoogland le ba Lefapha la Thuto Kapa-Leboa, ba šetše ba amogetše seo thelesekopo yeo e kgonago go ba direla sona. SALT le SALT Foundation di ba swaragantšhitše le mafase a go swana boNew Zeland, Poland, bjalobjalo go ruta baswa ba rena bao ba nago le kgahlego mahlale a bonepadinaledi - astronomy. Ba šetše ba humane barutiši ba dithuto tša saense le mathematics go tšwa dikolong tša kgauswi Sutherland moo barutiši ba ba bjalo ba be ba se gona.
Gape go na le bao ba šetšego ba ithuta diyunibesithing gomme ba lefelelwa ke SALT Foundation. Gape go na le bao re tlilego go ba romela mafaseng a moše gore ba ye go ithuta ka ga mahlalehlale a dinaledi – astronomy - gore ba tle ba kgone go holega le go hola lefase la rena.
Re a go leboga Ntate Sefularo ge o ile wa bona taba yeo gomme wa hlohleletša bana ba rena gore ba ithute mahlale a swanago le ao. Ke tshepa gore maloko ao a dutšego ka mo Ngwakong ka moka le tla iša bana ba lena Sutherland gore ba ye ba ithute se sengwe ka gore ge e le lena tšeo ga le sa di kgona. Ke a leboga, Mohlomphegi Speaker. [Legofsi.] (Translation of Sepedi Minister’s response follows.)
[The MINISTER OF SCIENCE and TECHNOLOGY: Hon Madam Speaker, I appreciate what hon Sefularo said regarding the South African Large Telescope (SALT). I would like to emphasise that all the youth, and not only those who are in Sutherland, are excited about the telescope and have a huge interest to study Science and Technology so that they will be able to fill the posts that will be created at the SALT.
The youth who live in Sutherland, especially those in the Karoo Hoogland and the Northern Cape Department of Education, have already benefited from the telescope. The SALT and the SALT Foundation have connected them to overseas countries like New Zealand, Poland etc, to assist those who have an interest in astronomy. They have already found Science and Mathematics teachers from schools in the Sutherland area, whereas they were not there before.
There are those who are already studying at the university sponsored by the SALT Foundation. Others will get scholarships to study astronomy abroad so that they will be of assistance to our country.
Mr Sefularo, we are grateful that you picked this up and motivated our children to follow such studies. I hope that all the members present in this House will take their children to Sutherland to learn these things, as you cannot do these things anymore. Thank you, hon Madam Speaker. [Applause.]]
PRIVATE SECURITY COMPANIES GUARDING POLICE STATIONS; AMBULANCE WORKERS’ LIVES ENDANGERED
(Minister’s Response)
The MINISTER OF SAFETY AND SECURITY: Madam Speaker, the hon Ditshetelo has made a statement, which has several elements. I hope I’ll be able to address all of them. Firstly, he decries the fact that we are using private security companies to protect the buildings and that those companies are responsible for access control.
Issues that relate to the security of the property of policing those buildings and the personal security of police officials are the responsibility of the police themselves. We do not train police to look after police stations; we train them to do policing. In other words, they are responsible for the safety and security of the members of our population. They do not guard those police stations.
Secondly, you have also raised the issue of the origin of some of the members who work for these security companies. Well, we are the National Assembly, which is responsible for defining and articulating laws. If you don’t want people who come from other countries to work in South Africa, just place before this House a motion that will relate to that. Maybe even an Act.
The fact of the matter is that you are talking about only the private security companies. I’m sure the hon Groenewald will take you on this one. What about the many farmers who are using people from Zimbabwe and other neighbouring countries? What about businesses - and there are many of them
- who are using people from the four corners of the African continent? Are you saying we should stop this from happening? It is not part of our law to do that. And we are not going to do anything that is illegal.
Thirdly, you also raised the matter of the private security companies themselves. Well, there is a law that relates to that question. If it is your contention that we should not allow foreign-based companies to be registered in South Africa, say so. When, in the beginning, as we were formulating the Act, we wanted to do precisely that, there were objections to this here in the House. If you believe we need to change now, come forward and say so.
The hon Kohler-Barnard is doing something that, I believe, ought to be regulated. She is dragging rumour into this House. Otherwise, how do we understand what she is saying? Not unless I revert to my early days when I was growing up. There were some areas which people were warned not to go past. For instance, there was a hillock and people would say don’t go past that hillock because there are some cannibals that will eat you up. Or don’t cross that river because there are some mermaids there who will drag you into the depths of that river.
How can anybody, a public representative for that matter, come here and generally say ambulances are being stoned and what have you? Bring me facts. Bring me cases here that are factual, and we will with that. You can’t come here and spread rumours in this House. This House is not designed for rumours. [Applause.]
MASS GRAVES DISCOVERED NEAR SA MILITARY BASE IN NAMIBIA
(Minister’s Response)
The DEPUTY MINISTER OF DEFENCE: Madam Speaker, I wish to thank hon members for their concerns about what is happening in our neighbouring countries.
I want to assure them that the Department of Defence will definitely co- operate with the government of Namibia in finding out the truth about these mass graves. The only evidence we have so far is that some of the people mentioned are no longer with the Department of Defence. But we will assist in whatever way is required of us.
I also want to assure this House and the people of South Africa that the current Department of Defence will not engage in acts of barbarism. I thank you, Madam Speaker. [Applause.]
WATER CONSERVATION CAPE TOWN
(Minister’s Response)
UMPHATHISWA WEMICIMBI YAMANZI NAMAHLATHI: Enkosi Somlomo. Ndiphakamela ukubulela ilungu likaKhongolozi elithe laphakama liqinisa umkhankaso wokugcina amanzi. Yanga namanye amaqela angalixhasa eli phulo kuba kaloku ukuba amanzi awakho akusoze kubekho wisiki okanye iwayini, kwaye akusoze kubekho xesha laziyolo loluvala unyaka, ngoko ke akukho bomi. Mandilibulele ibhunga lalapha ngokukhokela lo mkhankaso. Yanga nabanye oomasipala bangazeka emzekweni. Enkosi. [Kwaqhwatywa.] (Translation of Xhosa paragraph follows.)
[The MINISTER OF WATER AFFAIRS AND FORESTRY: Thank you, Speaker. I want to express my gratitude to the member of the ANC who supported the campaign for water conservation. We wish all other parties would do the same and support this campaign because if there was no water there would be no whisky and wine. There would be no end of year parties and there would be no life. Let me praise the Cape Town City Council for leading this campaign. I wish all the municipalities would do the same. Thank you. [Applause.]]
The SPEAKER: Order! I will now take an extra Ministerial response because I believe that hon members deserve to get answers to their statements. [Interjections.]
Mr M J ELLIS: Madam Speaker, I wonder if you would, in the circumstances, allow the DA to make an extra statement, because the Rules make it quite clear that there should be six Ministerial replies, and we have had six already.
The SPEAKER: Is that what you are rising on?
Mr M J ELLIS: Yes, I am rising on a point of order.
The SPEAKER: Are you rising on the issue that I shouldn’t allow the seventh Minister to give a Ministerial response?
I thought members of Parliament would welcome the fact that there is a Minister who is being allowed to give them more information. I always hear members crying out for more information. Now, the Chair is being generous. [Interjections.]
Mr M J ELLIS: Madam Speaker, the truth of the matter is that we don’t always get information from that Minister. That is the point!
The SPEAKER: But there is the Deputy Minister for Justice and Constitutional Development wanting to give you information.
Mr M J ELLIS: It doesn’t matter, Madam Speaker. We don’t always get information from the hon Deputy Minister for Justice and Constitutional Development. He stands up and says a lot of things that are very seldom information.
The SPEAKER: Hon member, please allow me to exercise my prerogative and allow the Deputy Minister to give this House whatever information he has. [Applause.]
DECISION BY SPEAKER TO ATTEND TRIAL OF JACOB ZUMA
(Minister’s Response)
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Madam Speaker, I think we need a response. There are lots of things I would like to respond to. It being after lunch, hon Ellis is talking a lot again. [Laughter.] One wonders what helped him. [Laughter.] [Interjections.]
Mr M J ELLIS: Madam Speaker, I rise on a point of order: I take exception to the point he has just made. [Laughter.]
The SPEAKER: Hon Deputy Minister, please withdraw the remarks about it being after lunch . . .
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Madam Speaker, I withdraw that the hon Ellis is obviously very brave after lunch. I withdraw that unconditionally! [Laughter.] Unconditionally! [Laughter.]
I would like to respond to another terminological inexactitude that was perpetrated, I think in a very gratuitous and very cowardly manner, by the hon Camerer, who attacked the Speaker whilst she was in the Chair and could not respond. I think there is not much point in responding to most of her politicking. But I think . . . [Interjections.]
The CHIEF WHIP OF THE OPPOSITION: Madam Speaker, on a point of order . . . [Interjections.]
The SPEAKER: Please, hon Gibson, allow the hon member to finish. The CHIEF WHIP OF THE OPPOSITION: Madam Speaker, the point of order is that the hon Deputy Minister has described the statement by the hon Mrs Camerer as cowardly. That is unparliamentary, and I ask you to ask him to withdraw.
The SPEAKER: Hon Deputy Minister, please withdraw the word “cowardly”.
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: I withdraw unconditionally, Madam Speaker. [Laughter.]
Now, the point that one has to make is this: Firstly . . . [Interjections.]
Mr M J ELLIS: Madam Speaker, may I ask the hon Minister a question? I would like to ask him simply why is he being so brave after lunch.
The SPEAKER: Hon members, please let us proceed with more dignity.
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: I had some water at lunchtime, Madam Speaker.
The attack on the Speaker is a very serious one. Firstly, the principle of the presumption of innocence is entrenched in our Constitution. If there are court cases that are taking place then, clearly, the people have not yet been found guilty. Secondly, our law makes it clear that our courts are open to the public and, in fact, we encourage people to attend those cases. So, the law is very clearly against what Mrs Camerer is saying.
But, more important is this problem that she ends off with a flourish. The flourish is that the attendance of the Speaker at an open court trial, which has not yet begun, undermines the independence of the judiciary. Now, I ask you with tears in my eye: How on earth can the attendance of anyone, even the President, at a court trial of someone who is on trial undermine the independence of the judiciary? [Interjections.]
So, Mrs Camerer, can I suggest something to you - the same that the Minister of Education suggested? I think you should go with those members at the back that are now going to read and study how to research things so that they can give proper inputs in this House. Can I suggest you join them, and not say the things that you have said? [Applause.]
CONSTITUTION TWELFTH AMENDMENT BILL
(Second Reading debate)
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Madam Speaker, hon Ministers and members, comrades and friends, ladies and gentlemen, on 27 April 1994, in terms of the interim Constitution . . . [Interjections.] Look you can’t faze me, you can shout as much as you like, it does not hassle me.
In terms of the interim Constitution of 1993, the Republic of South Africa became a democratic, constitutional, sovereign state established on the basis of three distinct but interrelated spheres of government, namely the national, provincial and local spheres of government. [Interjections.] You should listen then you don’t have to do that reading.
The provincial sphere of government was established as the present nine provinces of the Republic out of the areas of the former Republic of South Africa, the Bantustans of Transkei, Bophuthatswana, Venda, Ciskei and the areas of the six self-governing territories. The geographical area comprising each of the nine provinces is defined in Schedule 1 of the interim Constitution. The areas of the respective provinces were and still are defined with reference to specific magisterial districts created in terms of the Magistrates’ Courts Act of 1944.
The above-described dispensation for the provincial sphere of government was continued under the Constitution of 1996, which provides that “ the boundaries of the provinces are those that existed when the Constitution took effect”. In other words, they are as defined under the interim Constitution, with the magisterial districts acting as building blocks of each province.
On the other hand, section 151(1) of the Constitution provides that the building blocks of our local sphere of government consist of municipalities which must be established for the whole of the territory of the Republic, and which differ significantly from magisterial districts.
Furthermore, in 1998, the Constitution was amended by the insertion of section 155(6A) that regulate the establishment of the so-called “cross- boundary municipalities”. Section 155(6A) provides, inter alia, that if the criteria for the determination of municipal boundaries cannot be fulfilled without a municipal boundary extending across a provincial boundary, that municipal boundary may, subject to certain requirements, be determined across the provincial boundary.
Sixteen cross-boundary municipalities, for example, Ekurhuleni, Tswane, Bushbuckridge, Kgalagadi and numerous other district councils and other local councils, were established in terms of this relevant statutory provisions affecting five provinces in the Republic, namely Gauteng, Limpopo, Mpumalanga, Northern Cape and North West.
Consequently, provincial boundaries are still to this day determined with reference to the boundaries of magisterial districts, rather than with reference to municipal boundaries. These two concepts are totally different in many respects. Magisterial districts are defined areas in which courts exercise jurisdiction, whereas municipal boundaries are the geographical areas designated by the Municipal Demarcation Board within which a democratically elected legislative and executive authority exercise the powers granted to such municipality in the Constitution and subsequent laws.
This state of affairs has not only resulted in some legal and practical difficulties, particularly in respect of service delivery, but also in terms of the cross-boundary municipal dispensation. The Department of Provincial and Local Government has done a profile of municipal performance, and it was found that cross-boundary municipalities were amongst those municipalities whose performance was sub-optimal.
There are many reasons for this sub-optimal performance, but the main reason is the fact that various provinces often have different legislation for similar functions applicable to such cross-border municipalities. When the laws of more than one province need to be administered in a cross- boundary municipality, this not only leads to legal and administrative confusion, but it is also a costly exercise. It is difficult at any given time to say who has ultimate responsibility over such municipalities. Therefore, sometimes neither province takes responsibility, and they do not budget accordingly.
Some of the other challenges that are being experienced include, inter alia, in the area of health, different legislation and funding from the two provinces; you find, in the area of housing, that the subsidisation of such projects impacts negatively on the delivery of housing; in terms of traffic, a cross-boundary municipality must administer the law of two provinces, resulting in confusion for road users; and ambulance services, which was raised just now, in one part of the cross-boundary municipality service may be rendered by the district municipality and in another part by the local municipality.
The experience of the last six years has shown that cross-boundary municipalities present legal, financial and administrative challenges that make it difficult for government to provide services to such communities in an equitable and sustainable manner. Consequently, on 1 November 2002, the Presidential Co-ordinating Council resolved, amongst others, that the notion of cross-boundary municipalities be abolished, and that the provincial boundaries be reviewed so that no municipality straddles two or more provincial boundaries.
The decision of the Presidential Co-ordinating Council was influenced by the above reality and the challenges experienced in the joint administration by provinces of these cross-boundary municipalities. The objective is therefore to obtain legal, financial, administrative and functional certainty to enhance service delivery, providing that all municipalities fall within a specific province.
During August and October 2005, the Municipal Demarcation Board published maps in the Government Gazette reflecting proposals for boundary changes received from the Minister for Provincial and Local Government. I will not go into the detail of these proposals, as the Minister is better placed to do so, except to say that the proposed boundaries are meant to assist the state to provide services to communities in an equitable and sustainable manner. They are also meant to promote social and economic development at regional and local level, and to enable integrated and effective local government.
In order to give effect to the resolution of the PCC, this constitutional amendment before the House seeks to redetermine the geographical areas of the provinces to avoid municipal boundaries stretching over provincial boundaries. In addition, the Cross-Boundary Municipalities Laws Repeal Bill of 2005, which is presently before Parliament, seeks to repeal all the laws providing for cross-boundary municipalities, to demarcate the new municipal boundaries being proposed, and to deal with certain consequential implications in respect of municipal boundaries.
Let me now turn to discuss each provision of this Constitution Twelfth Amendment Bill. Clause 1 seeks to amend section 103 of the Constitution, firstly, to list the respective provinces in alphabetical order; secondly, to provide that the geographical areas of the respective provinces comprise the sum of the indicated geographical areas reflected in the various maps referred to in the Notice listed in the proposed new Schedule 1A; and, thirdly, to provide that whenever the geographical area of a province is redetermined by an amendment to the Constitution, an ordinary Act of Parliament may provide for transitional measures to regulate the legal, practical and any other consequences of the redetermination.
Such transitional measures will be provided for in the said Cross-Boundary Municipalities Laws Repeal Bill, and will regulate matters such as the transfer of provincial functions, assets, rights, obligations, duties or liabilities from one province to the other.
Clauses 2 and 3 of the Bill seek to repeal sections 155(6A) and 157(4)(b) of the Constitution that deal with cross-boundary municipalities, removing the principle of cross-boundary municipalities from the Constitution.
Clause 4 of the Bill seeks to insert a new Schedule 1A in the Constitution that defines the areas of the provinces with reference to the geographical areas that are reflected in municipal demarcation maps that are contained in official notices as published by the Municipal Demarcation Board.
It needs to be pointed out that by using municipal demarcation maps, the greatest common denominator of geographical area is used, namely, 6 metropolitan municipalities and 46 district municipalities. These structures represent wall-to-wall municipalities, whereas local municipalities do not cover the whole territory of the Republic.
Although there are no cross-boundary municipalities on the provincial boundary between the Eastern Cape and KwaZulu-Natal, a decision was taken to resolve the challenges relating to that boundary in a manner that would avoid going through a process of first establishing cross-boundary municipalities. Those challenges are being addressed in the Cross-Boundary Municipalities Laws Repeal Bill through proposed demarcations of municipalities. Insofar as those proposed demarcations impact on district municipalities, such proposals are reflected in the new Schedule 1A to be inserted in the Constitution.
It is very important that a vital distinction be emphasised and understood by this House. Although the maps being used are based on municipal demarcations, the constitutional amendment passed today does not entrench the boundaries of such municipalities. The boundaries of municipalities still must be demarcated in terms of section 155(3) of the Constitution by an independent authority, that is, the Municipal Demarcation Board.
We are merely using the sum total of these maps in Schedule 1A to denote the collective area which will comprise a province. In other words, these maps are used to define the outer boundary of each province, and not to define the boundaries of the six metropolitan and 46 district municipalities, which they reflect.
Or stated differently, the outer boundaries of these municipal demarcation maps, which form the boundary of the province, are indeed also the boundary of the province. This model seems to me not to be satisfactory. However, it is what we have inherited from the past and what we continue with as the same model in this constitutional amendment. The building blocks of our provinces, including the provincial boundaries in the interim Constitution and the Constitution of 1996, are magisterial districts. The alternative we have now progressed to is to use municipal boundaries as defined by the Municipal Demarcation Board. However, this means that each time a magisterial district was amended in the past, or a municipal boundary is amended in the future, we will have to amend the Constitution.
That seems to be absurd. Is it not time that we actually obtain the expertise of someone to technically define exactly what each provincial boundary is?
The DEPUTY SPEAKER: Order! Order, Deputy Minister! Order, please! There are too many meetings taking place in the House.
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: For example, the boundary of Limpopo province is the Limpopo River in the north, the Kruger National Park in the east and the border with Botswana in the west and so on.
I would propose that the viability of this proposal of defining the specific provincial boundaries in the Constitution be examined and implemented if found acceptable. It just makes sense. To use municipal boundaries, the smallest governmental units which are the most likely to be changed for a variety of reasons, or even worse, magisterial districts as the building blocks of your provinces, including your provincial boundaries, means you will have to amend the Constitution regularly and unnecessarily. It leads to absurdities. The time has arrived, in my view, to change this model, but that is for another occasion.
In conclusion, this constitutional amendment removes the principle of cross- boundary municipalities from the Constitution and merely defines the geographical area including, by implication, the provincial boundary of each province in the new Schedule 1A of the Constitution, whereas it is the Cross-Boundary Municipalities Laws Repeal Bill, which is presently being processed,through which the exact new provincial boundaries under review and as defined by the Municipal Demarcation Board will be legislated into law.
Although their job is only half done, I would like to thank the chairpersons and members of the Portfolio Committees on Justice and Local Government and their equivalent committees in the NCOP for the time and effort that they have put into finalising this rather technical constitutional amendment within the short timeframe given to them.
We now await the finalisation, within the next week or two, of the Cross- Boundary Municipalities Laws Repeal Bill. Upon its passing, the legislative framework will be in place for the next local government elections to take place by no later than 6 March 2006.
I commend the passing of the constitutional amendment to the House. I thank you. [Applause.]
Ms F I CHOHAN-KHOTA: Madam Deputy Speaker, colleagues, the Constitution Twelfth Amendment Bill is primarily aimed at reconfiguring the manner in which geographical areas of the provinces in our country are defined. The interim constitution had previously based the geographical areas of provinces on magisterial districts, which essentially can be amended by decree by the Minister for Justice and Constitutional Development. This factor on its own makes magisterial districts less than suitable building blocks for defining the geographical area of any province.
In this regard the Department of Provincial and Local Government proposed that the building blocks to define the area of each province be district and metro municipalities. This would hold two distinct advantages. The first one is that these categories of municipalities cover every inch in geographical terms of the Republic and therefore comply with the basic requirement in any exercise to build provincial areas. The second advantage is that any change to a municipality must be made through the processes adopted by the Municipal Demarcation Board, which, because it is a more intensive process involving public consultation, is less likely to change too quickly, thus engendering more stability.
Having said this, of course, using municipal building blocks to build provinces geographically, while better than magisterial districts, is not ideal, and I do agree with the Deputy Minister. At some point it certainly will become necessary for government to produce topographical maps to delineate the various provincial boundaries. However, using municipalities for this purpose lends itself very nicely to the eradication of cross- boundary municipalities which, six years ago, seemed a plausible compromise so typical of, and important to, our proud transition to democracy.
While in keeping with the spirit of compromise, cross-boundary municipalities did precious little for administrative efficiencies and good governance practices. This then is the second objective of the constitutional amendment we have before us today.
It bears noting that while it is correct to say that we use municipalities as building blocks, it is more correct in some instances to say that we use concept municipalities, firstly, in order to locate previous cross-boundary municipalities firmly into a single province, and, secondly, to ensure that we can count on the support of the provinces who will ultimately decide on this issue. But I will talk more about this later. The Constitution Twelfth Amendment Bill effectively eradicates the 16 cross- boundary municipalities and, consequently, all municipalities fall squarely within one province or another. It is important to note that while the matter of provincial boundaries in some areas has met with devastatingly emotional responses, I certainly have not seen a single submission in favour of retaining cross-boundary municipalities.
Certain adjustments were also made to a few areas other than those pertaining to CBMs, where, for example, enclaves or little islands of one province existed in another province, as is the case in KwaZulu-Natal and the Eastern Cape. Adjustments were also proposed in this regard. As we speak, there is an area of 31 hectares of Matatiele that is part of the KwaZulu-Natal province but situated in the Eastern Cape. The whole of the Umzimkhulu District is also situated in KwaZulu-Natal but it belongs to the province of the Eastern Cape.
We have, as the portfolio committee sitting together, been inundated with petitions and submissions from individuals and organisations from these areas, but the hon Nomhle Mahlawe will deal more specifically with these areas in her input a little later on today. Suffice it to say we do not expect to please everyone by our proposals today, but what weighed quite heavily on us was the provision in the Constitution that gives the power of veto to provinces. Section 74(3) of the Constitution reads as follows:
Any other provision of the Constitution may be amended by a Bill passed by the National Assembly with a supporting vote of at least two-thirds of its members and also by the NCOP with a supporting vote of at least six provinces if that amendment relates, inter alia, to the altering of provincial boundaries, powers and functions of institutions.
In terms of section 74(8) of the Constitution, if the Bill concerns only a specific province or provinces, the NCOP may not pass the Bill or the relevant part thereof unless it has been approved by the legislature or the legislatures concerned. The procedure in terms of 74(3)(b) read with section 74(8) of the Constitution is as follows: Simply put, if the National Assembly passes this Bill it must be referred to the NCOP for consideration. The NCOP may not pass the Bill unless it has been approved by the legislature or legislatures of the affected provinces themselves.
The Constitution Twelfth Amendment Bill will therefore be referred to the provincial legislatures by the NCOP and will serve before the NCOP only once the provinces have processed it. The NCOP will then require the support of at least six provinces to process this Bill. The Bill thereafter will be referred to the President for assent.
In other words, this Bill does not return to this House at all if there is agreement by the legislatures concerned and concurrence by at least six provinces. In essence these provisions anticipated that both Houses would pass the same version of the Bill. Where, for instance, only a part of the Bill requires the approval of a specific provincial legislature, as is the case here, and such portion is not approved by a province, only that part of the Bill lapses but the rest of the Bill may be proceeded with, subject to the necessary amendments needed to remove the affected part. This effectively means that any province whose boundaries are amended in this Bill is able to veto that part of the Bill and to cast this whole process of delineating new boundaries for the seven affected provinces asunder.
As stated above, unless both Houses pass the same Bill, it will not be a Bill passed in terms of section 74. If such a Bill has already been passed by the National Assembly it must be referred back to it for reconsideration and amendment in terms of the Assembly Rules. Therefore, if the NCOP has passed an amended version of the Bill it must be referred back to the Assembly, which means that members of this House will have to be recalled. In this regard the committee was guided by the extensive discussions and consultations between the Department of Provincial and Local Government and the political leadership of the various affected provinces. The outcomes of these consultations were incorporated into the final version of the schedule to this Bill.
The extensive efforts of the Minister for Provincial and Local Government to engage and consult with stakeholders therefore must be seen in light of this constitutional process that gives the provinces the final say in the matter of provincial boundaries. The Constitution Twelfth Amendment Bill paves the way for the forthcoming local government elections and once the provincial boundaries are . . .
The DEPUTY SPEAKER: Order, hon member! I think for us to be able to deal with this very important topic, we may request other members to leave the Chamber and go and conduct their business outside.
We have never done that, but we are dealing with something that is very, very important, and I do not think some people actually realise that we need . . . Right now, the hon member is talking about recalling the National Assembly and other things, yet members of the Assembly are not even concentrating. Unfortunately, hon members, we will have to call you by name and it is not only going to be us who will know that you have not been behaving well but the country will also know that.
Hon member, please continue.
Ms F I CHOHAN-KHOTA: Once the provincial outer boundaries are determined by this legislation, the Municipal Demarcation Board, in the absence of the concept of cross-boundary municipalities, will redetermine the municipal or inner boundaries of the affected provinces.
Having said that, I must say that whilst some of the protests that we have seen on television and in the newspapers have been based on a sense of allegiance to one province or another - and in this regard not much can be done to please everyone - the objections from certain quarters seem to hinge on very real fears concerning the matter of service delivery.
It is important to note that adjustments to the provincial equitable share allocations based on shifts in population of the provinces will have to be effected. It is also important to note that, as we speak, provinces are engaged in the quest to deal with the transitional matters so that in fact, ultimately, there is no vacuum that is left in terms of service delivery.
Any provincial function performed in affected municipalities will require transfer and a transitional clause in this Bill provides for provinces to effect agreements even prior to the implementation of this law to enable a smooth and uninterrupted passage of transfer. This is so because it is not the intention of this legislature or this government to renege on service delivery, housing, or other material commitments to our people. This has not been the legacy of this government over this decade.
It is important to accept, however, that in regard to certain material issues such as provincial monetary allocations or subsidised transport to learners at schools, where severe disparities occur currently between provinces, we do as members of Parliament need to be sensitive to this. While the national education department is taking laudable steps to standardise state funding allocations to learners, the provinces in which these affected communities are now situated, need to be forthcoming and sensitive to ensure that every effort is made to accommodate the particular needs of those communities during this very volatile time.
Ongoing negotiations between affected provinces in this regard continue and our people need to be assured that no physical walls will be erected to prevent crossing of roads, no policemen, no nurse, no teacher, will lose their job or stop being paid a salary. To the parent who expresses concern over the fact that the school syllabus in the North-West province is different from that of Gauteng, I wish to say this: Your child will go to exactly the same school as before, will be taught by exactly the same teachers as before. The syllabus will continue as before, as your school governing body will not have changed. The teachers will get paid through a different province but this will not affect the syllabus and the education that any child receives.
Taxis that hold permits in one province will continue to operate those routes despite operating in a differently named province. These guarantees we have insured in the Bill associated with this amendment, the Cross- Boundary Municipal Laws Repeal Bill, but more about that at a more appropriate juncture. The point is that our provinces need and require to be sensitive beyond their normal calling to ensure a better life for all.
Affected provinces must ensure maximum responsiveness, engagement and accommodation of the needs of the people and this may now more honestly be set in motion once this House has pronounced itself on this Bill. Hon members, it bears reminding ourselves today that we are after all one country, one people, South Africans all, regardless of whether we are now in the Gauteng province or the North-West province. A decade ago we pledged our allegiance to one constitution, not one province. This Constitution reminds us that the whole of South Africa belongs to all of us who live in it.
In conclusion, I want to take this opportunity in the last few seconds to very heartily and sincerely thank the officials of the Department of Provincial and Local Government. In particular, I would like to thank Dr Petra Bauer, Adv Kholong, Mr Johan Labuschagne from the Department of Justice and, of course, the hardworking members of my portfolio committee and the members of the Portfolio Committee on Provincial and Local Government, for their assistance. I would also like to thank, in particular, the Minister for Provincial and Local Government for his assistance and guidance during this period. I do thank you all for your time. Thank you. [Applause.]
Mr L K JOUBERT: Deputy Speaker, as the title of this Bill indicates, this is the 12th time that we are seeking to amend the 1996 Constitution. As with previous amendments of as recently as August this year, we again fast- tracked the process through the committee stage.
With the previous amendment to the Constitution, I voiced my concern about the fast-tracking of the legislative process in matters that are not of vital importance. Here we have to distinguish between urgency and importance. As in the case of the previous amendment, we waited until a relatively unimportant matter became urgent because of time factors, and then pulled out all the stops and fast-tracked the process.
My question is: Is this how a responsible legislature should approach amendments to its Constitution? Should amendments to the Constitution not be considered in the most circumspect manner? When the matter of the motor vehicle allowance for all magistrates served before the justice and constitutional committee Treasury informed the committee that they could only approve expenditure not budgeted for if it was unforeseen and unavoidable.
Maybe we should take a cue from Treasury when it comes to fast-tracking legislation, especially when it concerns amendments to the Constitution, the highest law of the land. Would we have been able to fast-track this piece of legislation if we had a rule stating that we can only fast-track legislation if it was unforeseen and unavoidable?
The Deputy Minister mentioned that the Presidential Co-ordinating Council recommended the elimination of cross boundary municipalities as far back as November 2002 - three years ago. Why was nothing done until August this year? Why put the justice and constitutional affairs committee under pressure and risk our approving amendments to our Constitution to which we have not fully applied our minds because of time constraints.
I suggest that we seriously consider putting a timeframe to amendments to the Constitution to ensure that all amendments receive proper consideration. With all due respect, when a piece of legislation is being fast-tracked the risk of not applying our minds properly is just too great. Perhaps we should go back to the old principle that law cannot be made, it can only be found by the wise after careful consideration. I thank you. [Applause.]
Mr P F SMITH: Deputy Speaker, colleagues, I’d like to say that although the IFP is in agreement with the broad objectives of this Bill we can’t support the text before us today.
Now, the Bill does seek to redefine provincial boundaries and it uses new building blocks, the municipal building blocks instead of the previous ones, the magisterial districts, and we agree with that. It also proposes to get rid of cross-boundary municipalities and that too we fully agree with, as well as the transitional measures that are put in place. And, although not directly associated with the others, there is also the resolution of the KwaZulu-Natal-Eastern Cape boundary. That we agree with in principle – it needs to be done – but we do not agree with the way it is being done with this Bill. We believe that the process that characterises this Bill has been highly problematic. The Minister’s proposal in respect of Umzimkhulu - that it be excised from the Eastern Cape and be given to KwaZulu-Natal - is perfectly logical because it’s an island in the middle of KwaZulu-Natal, and all sides, in fact, agree on it and there were no submissions that we are aware of that countered that.
However, the Bill further proposes to excise Matatiele from KwaZulu-Natal and hand it over to the Eastern Cape. That is where we really have a problem, because if this were a rational decision we would go along with it, but in reality it is not a particularly rational decision and this is a highly contested area too, in terms of submissions received from the local community. Our problem is being compounded, really, because of the process problems, partly alluded to by the previous speaker, since this has been on the agenda for some three years.
Three years ago we were told that this was going to happen and yet for three years we didn’t get a Bill. Every single year since then we have raised this matter in the Budget debate, and we asked the Minister: “Where is this Bill? When is it coming? Is it going to be addressed before the next elections? Why are we having it later rather than sooner?”
And every year we are told that it is coming, it’s coming. And what has actually happened has come right at the end of a process now, and it has rendered the process so truncated that, in fact, it has limited the possibility of consultation with the affected communities. That’s what is really the problem; it is a problem of principle.
Local communities have not decided and have not had a meaningful input into this Bill. What’s happened is that – as was explained by the chair of the committee - because of the constitutional provision that the two provinces concerned have to give their consent, effectively there has been an executive deal between the provinces concerned – at a smoke-filled, back- room level – with the local communities that are affected by it having no say in this whatsoever. That is really what we are objecting to.
There were some amendments made during the committee stage - very, very few
- but the principle must be that consultation is not an add-on; consultation is a fundamental issue. Regarding this Bill, there has been inadequate consultation, and so we cannot, for that reason, give our support to it. Thank you very much.
Mr J BICI: Deputy Speaker, the amendment of the Constitution is something that we should never take lightly. The particular subject of this Bill touches upon a highly sensitive matter for local municipalities. In fact, it is so sensitive that people have protested violently. Therefore this Bill should have been the subject of thorough and wide consultation.
It is our opinion that high standards of consultation have not been applied. Some metropolitan and district municipalities are affected. Literally millions of people would certainly like to comment on a matter that directly affects them.
Without even considering the marriage of the proposed boundary changes that the Bill seeks, we can declare that the drafting process is fatally flawed and needs to be started de novo. Incidentally, we do not support the Bill. Thank you.
Mr A HARDING: Madam Deputy Speaker, when the political parties and social stakeholders of this country met to formulate a democratic constitution, two of the points that won unanimous approval was that the Constitution had to incorporate the concept of transparency and consultation.
Now, we all remember the chaos that resulted from the Bushbuckridge matter. The government did not consult those people who were affected then, and it is not consulting them now. The ID is not necessarily opposed to the scrapping of senseless political mechanisms, but today we have heard over and over about the wide-ranging effects that this amendment will have.
It is therefore only proper and right that these amendments are treated with the necessary and vital importance that is needed in terms of transparency and consultation, and as a result we do not support it. Thank you.
Mr S N SWART: Deputy Speaker, the ACDP appreciates the problems experienced in administering cross-boundary municipalities, and shares the view that CBMs have become unworkable. However, we share the views and belief that there’s been undue haste and very tight timeframes in tabling these amendments, and that insufficient consultation has taken place with affected communities.
Whilst the ACDP does not condone unlawful actions we can understand the frustrations that have been expressed. The main concerns relate to the critical issue of service delivery to the poor, as was pointed out by the chairperson of the justice portfolio committee.
It is significant, for example, that the Eastern Cape receives the largest provincial allocation, yet service delivery in that province remains appalling. The Municipal Demarcation Board was accused, in the submissions, of not embarking on an extensive consultative and participatory process in order to investigate and make recommendations that would strengthen local government and ensure affordable and sustainable service delivery. It is no wonder that the residents of Matatiele have demonstrated against their inclusion in the Eastern Cape.
It is significant that provincial legislatures have a veto over these matters. Whilst an agreement was achieved regarding Westonaria remaining in Gauteng, considerable dissatisfaction and civil unrest have accompanied the relocation of the West Rand township of Khutsong into the North West province. Residents are opposed to the relocation, again citing poor service delivery and poor levels of education in the North West province as reasons for their opposition.
It is clear that the political hotspots are being settled at a high political level without, in our view, proper consideration of the express wishes and concerns of the citizens involved. For the above reasons, whilst we support the broad ambit of this Bill, we cannot support it. I thank you.
Mnr P J GROENEWALD: Agb Adjunkspeaker, alhoewel ons hier besig is met die 12de wysiging van die Grondwet van 1996, moet ons nooit in dié Huis vergeet nie dat die 1996-Grondwet eintlik voortgespruit het uit die 1993-grondwet, wat bereik is deur ooreenkomste en sekere grondwetlike beginsels wat daargestel is.
Daarom moet ons ook vir mekaar sê die grense van provinsies is nie net uit die lug gegryp nie. So is die grense van die Noord-Kaapprovinsie deur onderhandeling gevestig om dit ‘n oorwegend Afrikaanssprekende provinsie te stel. Hier kom ons met ‘n wysiging, en ek dink dié is ‘n tipiese voorbeeld waar die ANC sy meerderheid van 73% in hierdie Huis wil gebruik om die Grondwet te wysig om hulle te pas sonder dat daar behoorlike konsultasie of ‘n behoorlike proses was.
Ons kan nie toelaat dat ‘n Grondwet net na willekeur, wanneer dit die behoefte is van die regerende party wat ‘n oorweldigende meerderheid het, verander word nie. Ons moet behoorlik oorleg pleeg, en ons moet die beginsels respekteer, en daarom sal die VF Plus nie die wysiging ondersteun nie. (Translation of Afrikaans speech follows.)
[Mr P J GROENEWALD: Hon Deputy Speaker, although we are dealing here with the 12th amendment to the Constitution of 1996, we should never forget in this House that the 1996 Constitution actually arose from the 1993 Constitution, which was achieved by agreements and the establishing of certain constitutional principles.
Therefore we also have to say to one another that the boundaries of the provinces were not merely sucked out of someone’s thumb. In this way the Northern Cape province was established through negotiations to set up a predominantly Afrikaans-speaking province. Here we have an amendment, and I think that this is a typical example of the ANC wishing to use its majority of 73% in the House to amend the Constitution to suit them without there being proper consultation or a proper process.
We cannot allow a Constitution simply to be amended when it suits the ruling party which has an overwhelming majority. We have to consult properly, and we have to respect the principles, and therefore the FF Plus will not support this amendment.]
Mr J B SIBANYONI: Madam Deputy Speaker, Deputy President, Ministers and Deputy Ministers and hon members of Parliament, I feel honoured to get an opportunity to participate in this debate on the Constitution Twelfth Amendment Bill. The purpose of this Bill is to amend the Constitution of the Republic of South Africa, 1996, so as to effect a technical change to redetermine the geographical areas of the nine provinces of the Republic of South Africa and to provide for matters connected therewith, as stated in the preamble to the Bill.
The Bill aims to redetermine the geographical areas of the provinces so as to ensure that each municipality is placed under one province. The principles and objectives of the Bill show that what is sought here is to abolish cross-boundary municipalities and thereby close the chapter on this type of municipality.
Since the majority of people who reside within cross-boundary municipalities and who are largely affected by the redetermination process speak several African languages as first languages, and not English or Afrikaans, some parts of my speech will be in isiNdebele, Sepedi, isiZulu but also English and Afrikaans.
When this Bill becomes law, there will not be even a single municipality that will straddle a provincial boundary. Areas currently demarcated as cross-boundary municipalities will remain integrated units but will fall within one province.
Ukuphosela lami lobubodlhana ekulumenipikiswano le ngithanda ukuhlathulula ngokunabileko ngenarha kamasipala oqaba umkhawulo wangemitsweding onabomasipala ababili inukeng tsa diamani [the rivers of diamond] neKungwini [the place of mist] endzindze nge Bronghonghoro eBronkhorstspruit kwamarhinini iKungwini le ifaka inarha yangeKangala koNobhalarhana. (Translation of Ndebele paragraph follows.)
[In contributing to this debate, I would like to reflect in depth on the Cross-boundary Metsweding District Municipality that consists of the two local municipalities of Nokeng Tsa Taemane, the rivers of diamond, and Kungwini, the place of mist/fog, that are situated in Bronkhorstspruit. Kungwini includes Ekangala.]
Ekangala was established as a township in 1983 by the then East Rand administration board. It was established as a residential area for the people of KwaThema–Springs, Thembisa–Kempton Park, Wattville–Benoni, Etwatwa–Daveyton, and later Mamelodi in Pretoria and Witbank. Influx to Ekangala was strictly controlled through the then section 10 of the Black Administration Act, Act 38 of 1927.
This legislation excluded people who were not qualified to reside in the then urban areas, that is people from rural areas such as farms and homelands. People were told that Ekangala was going to be a second Soweto under the East Rand, and that the reason why it was built next to Bronkhortspruit was that there was no longer any building space available on the East Rand and that Ekangala would not be part of KwaNdebele.
In 1985 the then KwaNdebele homeland government opted for independence, which it didn’t obtain. In terms of the consolidation of the homelands, Ekangala was incorporated into KwaNdebele homeland by the previous government without the consent and against the wishes of the residents of Ekangala.
Abahlali bangeKangala baveza amazizo wabo wokungakhambisani nokobana inarha yeKangala ifakwe ngaphasi kwesabelo sakwaNdebele ngekani. kodwana ukubhenyoga lokho kwaphadlwa begodu kwapheliswa mbuso wesabelo urhelejwa mbuso owagadungako wekhethululo. Umuntu omutjha uKenneth Letlatla wadunyuzwa wahlongakala lokha isipholisa nasiphadlhalaja umbenyogo loyo, wokwala bonyana ikangala ifakwe ngaphasi kwenarha yakwaNdebele. Igatjha lika ANC ewodini ekhabe ihlala kiyo ihloko le ithiyelelwe ngezinyo layo ngokuvumelana nabazali begodu nomndeni wakhe. Abanye abahlali babaleka bayisukela iKangala bayohlala eRethabiseng neSpruitview nge East Rand lapho kabe babuyakhona abanye bahlala begodu kwabagadesi. (Translation of Ndebele paragraph follows.)
[Ekangala residents voiced their objection to the incorporation of Ekangala into the kwaNdebele government, but the objection was violently crushed by the homeland government assisted by the apartheid regime. A young man, Kenneth Letlatla, was shot and killed by the police in a protest march against the incorporation of Ekangala into the kwaNdebele government. A branch of the ANC in the ward where he resided during his lifetime has been named after him with the approval of his parents and family. Some people fled the area, to reside at Rethabiseng and Spruitview on the East Rand from where they came. Others remained until today.]
Cross-boundary municipalities were established to ensure viable, integrated and effective local government without shifting the existing provincial boundaries. These arrangements caused problems instead of solutions. The typical challenges that were experienced by other cross-boundary municipalities were also experienced by Metsweding, especially Kungwini which includes Ekangala.
Examples of this are that laws of more than one province need to be administered by the Kungwini cross-boundary municipality; the municipality needs both provinces to approve its integrated development planning; a shortage of water in Ekangala, the Mpumalanga part of Kungwini, whilst water has always been available in Rethabiseng and Zithobeni, the Gauteng part of the municipality; the Kungwini municipality owns land in the Gauteng portion but in the Mpumalanga portion the land is still owned by the province, and in the latter portion, the municipality cannot allocate land for houses, churches and business.
Isiqunto sokuphelisa abomasipala abaqaba imikhawulo namkha inida yemfuda samukelwa miphakathi eminengi ethintekako khabe kunethabo elikhulu esitjhabeni seKangala naseMetsweding lokha ibhodi yokutlama imida nayiveza isiphakamiso sokobana iMetsweding yoke ifakwe ngaphasi kweGauteng. Umphakathi wangeMetsweding abanye babo bakhona la ku-Public Gallery namhlanje wathaba wathatha godu ithuba lokwenza imphakamiso. Umrhatjho womphakathi wangeKangala iKCRS wazinikela begodu warhatjha amahlelo wokobana abalaleli badose imirhala ngomqopho wokukhuthaza ikulumopikiswano malungana nemphakamiso hlangana nenkhulumi uDorhodera Vuyo Molokodi weBhodi etlama imikhawulo watjhumegwa imibuzo ngokunabileko malungana nabomasipala abaqaba imikhawulo begodu nangerherho elilandelwako nentlabagelo zakhona nakufakwa iimphakamiso nehlangano erhatjha ngomoya eSewula ne Afrika yaba namahlelo ngendaba le. (Translation of Ndebele paragraph follows.)
[The decision to discard cross-boundary municipalities was welcomed by the majority of the affected communities. There was sporadic jubilation from the Ekangala community and the majority of the members of the Metsweding community on the Demarcation Board’s proposal that the entire Metsweding district be incorporated into Gauteng. The Metsweding community took and fully made use of the opportunity to make submissions. The Ekangala Community Radio Services (KCRS) volunteered and conducted some phone-in programmes to stimulate debate on the proposals. Dr Vuyo Mlokothi from the Demarcation Board, among others, was interviewed extensively on cross- boundary municipalities and the procedure and requirements in making submissions. The SABC also broadcast programmes on this topic.]
Some residents’ concerns are based on fear of the unknown. These concerns include, among others, the following issues. People refer to provincial boundaries as borders. They fear that they may be restricted to working, residing, buying, etc only in the province in which they reside. The realignment concerns provincial boundaries, not borders that separate one country from another. People will not be required to produce passports to move from one province to another.
People should not fear that, if they are in a particular province, their cultural rights will not be protected when they are in another province. For instance, people who speak isiNdebele and still observe their customs should not think that they need to be in the Mpumalanga province to speak isiNdebele or send their sons to initiation schools.
This process will not take away people’s rights to speak their languages and practise their culture. People feel strongly about ethnicity, while those feelings are based on misinformation. Ethnicity should not be a determining factor. People should pay allegiance to the Constitution and state institutions that protect constitutional democracy, for example the Human Rights Commission, Public Protector and so forth.
Human rights are protected at national level by the Constitution and not by provincial laws. In South Africa, we no longer have homelands that were established on an ethnic basis. Also, people should not fear that they will lose their jobs if their area changes from one province to another. Because my chairperson dealt with this issue regarding the continuation of rights, I will not deal with it.
Ten slotte wil ek graag uit die Bergprediking in Die Bybel aanhaal. Dit handel oor die sout van die aarde en die lig van die wêreld. Nadat Jesus aan die skare gesê het dat hulle die sout vir die aarde is, gaan hy voort en sê:
Maar as sout verslaan het, hoe kry ’n mens dit weer sout? Dit is niks meer werd nie. Dit word buitekant weggegooi, en die mense vertrap dit. (Translation of Afrikaans paragraph follows.)
[In conclusion, I would like to quote from the Bible, the Sermon on the Mount, which deals with the salt of the earth and the light of the world. After telling the crowd that they were the salt of the earth, Jesus went on to say:
But if the salt loses its saltiness, how can it be made salty again? It is no longer good for anything, except to be thrown out and trampled by men.]
Bjale ge letswai le tapa, le sa tlo nokwa ka eng? Ga le sa hola selo ge e se go lahlwa la gatwa ke batho. [When the salt loses its taste, what will it be seasoned with? It is worthless and deserves to be thrown away and be stepped on by people.]
Ek wil sê die konsep van oorgrensmunisipaliteite het net soos sout verslaan. Dit word deur die Wetsontwerp op die Herroeping van Wette Betreffende Oorgrensmunisipaliteite gehanteer. Dit is niks meer werd nie. Dit moet in die argief gebêre word vir die akademici en ons nageslag sodat hulle net kan weet daar was eens op ’n tyd oorgrensmunisipaliteite. (Translation of Afrikaans paragraph follows.)
[I want to state that the concept of cross-boundary municipalities has lost its effectiveness just as the salt has lost its saltiness. It is covered by the Cross-Boundary Municipalities Laws Repeal Bill. It is of no use. It has to be archived for academics and posterity so that they will be aware that there once were cross-boundary municipalities.]
Uma sesiwuphasisile lo Mthethosivivinywa, sizokuba nezifunda eziyisishiyagalolunye. Ngeke kube khona ngisho nowodwa uhulumeni wasekhaya ozovundla phezu komngcele wesifunda. Ngakho-ke thina, singuKhongolose, siyawusekela lo Mthethosivivinywa. Ngiyabonga. [Ihlombe.] (Translation of Zulu paragraph follows.)
[After passing this Bill, we are going to have nine provinces. There will be no local municipality that will straddle the boundaries of provinces. Therefore, the ANC supports this Bill. Thank you. [Applause.]]
Ms M M MDLALOSE: Madam Deputy Speaker, siwu-Nadeco sithi: a Constitution, uMgaqosiseko, uMthethesisekelo [as Nadeco we say: a Constitution] is a guide and determinant of what is possible. It should ensure stability and not affect self-determination or co-existence.
Singu-Nadeco sithi [As Nadeco we say]: The people want a neat service delivery, efficiency and stability. Amending the Constitution does not always ensure stability, progress and smooth running of things. The amendment of the Constitution should not unsettle and should not bring uncertainties. It needs to be smooth and be done timeously so that it does not destabilise, and it does not need to be rushed. It should enhance social cohesion and peace.
Having stated our concern as Nadeco, we want to concede and say we accept the amendments, even though they are a bit late. Thank you. [Applause.]
Mr I S MFUNDISI: Deputy Speaker and hon members, it is unfortunate that a Bill like this and the other one that goes with it have to be considered at the last moment and, above all, in turmoil, as is the case on the West Rand, because government, through the Presidential Co-ordinating Council, identified the need for doing away with cross-boundary municipalities in February 2002, and approved that in November the same year.
We in the UCDP call on the government to heed Mr Micawber’s advice and never do tomorrow what you can do today, because justice delayed is as good as justice denied. The UCDP supports the new alphabetical listing to accommodate Limpopo province. Even this could have been done with the name change of the province.
While we are not hard-put to accede to the reconfiguration of the provincial boundaries, we accept that, regarding the unrest of Khutsong, we are bound by the decisions of most of our members who have voluntarily agreed to be incorporated into the Northern Cape and Gauteng provinces. Failure to support the amendment would be a slap in their face as they did this kwa ntle ga tshollo yamadi [without bloodshed]. The UCDP will support this Constitution Twelfth Amendment Bill. [Applause.]
Mr M T LIKOTSI: Deputy Speaker, the PAC supports the Constitution Twelfth Amendment Bill. It is a logical, well-considered and long-overdue amendment. It’s purpose is to effect technical changes, to redetermine the geographical areas of the nine provinces of the country and, of course, to provide for matters connected therewith. The boundaries are now, according to the Bill, those which existed when this Constitution came into effect.
The memorandum on the objects of the Constitution Twelfth Amendment Bill gives a clear and comprehensive explanation of why this amendment to the Constitution is necessary. The PAC hopes that this unitary state will not have any more boundary disputes which are characteristic of a federal state. The historical background must always, however, be considered when drawing boundaries. Colonial boundaries which separate people who speak one language must be avoided. I thank you. [Applause.]
Ms S RAJBALLY: Madam Deputy Speaker, when the boundaries of provinces were drawn in 1993, many problems emerged with the cross-boundary municipalities. This Constitution Twelfth Amendment Bill is introduced to give effect to the Presidential Co-ordinating Council resolution of 2002 to scrap cross-boundary municipalities by ensuring that the provincial boundaries fall within one or another province.
While some of us may see the benefit of this, there appears to be some dissatisfaction expressed on the matter, especially by those communities caught in the cross-boundary areas. For whatever reason, these people have expressed a preference to belong to the areas to which they have always been known to belong. The MF understands their plight and wonders why their preference is not prioritised. We believe a vote should be taken regarding these areas to which the majority should receive preference – we are a democracy, after all.
The MF thus acknowledges that, if we carry out these plans, great improvement would be attained in terms of delivery by municipalities, especially in these cross-boundary areas. Many do not like change but this change could prove to be very beneficial regarding upliftment of communities and fulfilment of their needs by the new municipalities.
In light of that, the MF calls for communities to be open to this. At the end of the day, we all still belong to a beautiful South Africa. No matter where we are within these boundaries, your government is serving you in the best interest, always. The MF supports the Constitution Twelfth Amendment Bill. [Applause.]
Mr P J NEFOLOVHODWE: Madam Deputy Speaker, Azapo supports this Bill. [Interjections.] [Applause.] Since its inception, Azapo has never supported the idea of balkanising our country, because in Azapo’s terms to do so is to weaken the unity of our people as well as the extent to which central government can exercise its power. It is for this reason that Azapo has, time and again, called for the abolition of provincial governments, as presently constituted, and for them to be replaced with administrators who can serve our people better.
Problems that emanated from cross-boundary municipalities as well as the simmering discontent from residents whenever they are required to belong to this or that province have reaffirmed our standpoint that the provinces should be scrapped. To Azapo, a lot of resources could be saved if provinces were abolished and many of the trained and tested cadres were deployed for service delivery.
When all is said and done, and with all the arguments presented here today, this just convinces Azapo that, at some stage, we will have to decide whether we still want these provinces. Thank you. [Interjections.]
Mr S SIMMONS: Madam Deputy Speaker, this amendment exposes the danger of a ruling party that has a two-thirds majority. [Interjections.] It allows the governing party to recklessly abuse its numbers with no regard to the views of others.
I say this because of the blatant disregard of the negotiation process that took place prior to the 1994 elections. The principles that were decided on during these negotiations were responsible for the peaceful transition of our country. Government, through this amendment, is compromising the principal achievements reached through due consideration of all people, and not just one party.
The United Party of South Africa is of the opinion that this amendment’s sole purpose is to strengthen the ANC’s grip on the Northern Cape and other provinces. It has not given proper consideration to the effect this will have on a province like the Northern Cape that is already struggling regarding service delivery capacity. This is the result of insufficient consultation with all role-players and more so the people directly affected by this amendment. The United Party of South Africa, therefore, cannot support this amendment. I thank you. [Interjections.]
Mrs S M CAMERER: Madam Deputy Speaker, the DA cannot support this constitutional amendment Bill. In principle the DA supports the need to do away with municipalities that straddle provincial boundaries if dealing with two provinces creates co-ordination problems, which could hamper service delivery in the municipality, but not in this dictatorial, slap- dash, ill-prepared way.
The ANC Head of the Presidency intoned last week that any formula that comes out of cross-boundary proposals should be a process, which takes into consideration the views of the people. Hello, Mr Ngonyama! Where has Minister Mufamadi been? Why have we taken three years to get to this point, where no proper consultation has taken place? Again the administrative incompetence of this government has been exposed for all to see.
The DA believes that the only way to resolve the crises in Merafong Local Municipality is for Minister Mufamadi to hold a referendum among the people who live there, either before or after the elections. The DA believes that neither political parties nor government should decide which province cross- boundary municipalities should fall into. The people whose everyday lives are affected must be consulted and allowed to decide for themselves. A referendum need not stall the elections because the boundaries of the municipality itself will not change; it will either go to one province or another. The resolution of cross-boundary municipalities should therefore not be an excuse by the government to postpone the elections.
By contrast, the DA has consulted with our structures and we would like to place on record the following further specific objections. We object to the incorporation of Kgalagadi District Municipality of the North West province into the Northern Cape for the following reasons: This municipality comes with up to 450 000 Setswana-speaking people to a geographically large province with less than a million inhabitants. In other words, it increases the population by 50%.
The Northern Cape is one of our poorest provinces with very little economic growth and development, and this will place a tremendous burden on existing resources. There appears to be no impact study that has been conducted and there is nothing to indicate that the province will derive any benefit from this addition.
We also object to the incorporation of Matatiele Municipality into the Eastern Cape for the following reasons: There has been a betrayal of a process of pubic consultation, as the wishes of the local inhabitants have not been taken into account. This municipality has historic links with KZN due to proximity, economic ties and ease of administration. We suspect that the political motives of the ANC government have been involved in a trade- off in this particular case. Therefore we cannot support this Bill. [Applause.]
Ms N M MAHLAWE: Sethosi sa Seboleledi sa Palamente …[Deputy Speaker and hon members …]
… malungu abekekileyo, ndiyafuna kwasekuqaleni okokuba ndivumelane noSekela-Mphathiswa weSebe lezoBulungisa, uMnu De Lange, xa esithi kuyafuneka ukuba kukhe kwenziwe uphando olululo ngalo mcimbi, ngakumbi ngokubhekisele kwezi ndawo zichaphazelekayo zaseMpuma Koloni naKwaZulu- Natala. Imbali yezaa ndawo iyazidibanisa eza ndawo zonke, ukusuka eMzimkhulu, ukuya kuQumbu, ukuya kuma ngeMatatiyela.
Laa ndawo yayisakubizwa ngokuba yi-“No man’s land” ngenxa yokuba yayingaweli phantsi kwaphondo eliza kuyiphatha. Kodwa ke kwathi emveni kokufika kuka Adam Kok, zadityaniswa eza ndawo zenza le nto eyaziwa njenge- East Griqualand.
Yiyo le nto ke kufuneka okokuba kubekho umntu oza kuhlala phantsi enze uphando olululo ngeza ndawo; hayi ngoku ke, njengoko uMphathiswa naye etshilo, koko ngokuhamba kwexesha ukwenzela ukuba singamane sisiza apha ukuza kuguqula uMgaqo-siseko.
Ndiyafuna ukuba ndihlomle nangalo mba ubekwe ngamalungu athile, wokuba akukhange kubekho kubonisana. Abantu abazifundayo iincwadi nabenza uphando baya kufumanisa ukuba ngonyaka-mali ka-1996-97 sasineKomishoni kaTrengrove eyayizama ukuqwalasela umba wokuba ezi ndawo kufuneka zibe phantsi kwaliphi na iphondo. Into eyabangela ukuba ezi nzame zingaphumeleli kukuba ngelo xesha kwakuphethe omnye umbutho e-KZN, ngoko ke iMpuma Koloni zange ikwazi ukuba idibane. (Translation of Xhosa paragraphs follows.)
…I want to, from the onset, say that I agree with the Deputy Minister for Justice and Constitutional Development, Mr De Lange, when he says that there needs to be an inquiry into this matter, paying particular attention to the KwaZulu-Natal and Eastern Cape provinces. History tells us that the areas such as Mzimkhulu, Qumbu, Matatiele and others should be under one governance.
That area used to be referred to as “No man’s land” because it was not governed by the province whose jurisdiction it was under. After Adam Kok’s arrival, those areas were combined and became known as East Griqualand.
It is for that reason that a proper research has to be conducted in those areas. Not now, of course, as the Minister has also said, but at some point in time in order that we should not need to have to make amendments to our Constitution.
I would like to respond to some members’ wrong claim that we did not consult with the communities. People who read and those who conduct their own research will find that during the 1996-97 financial year there was the Trengrove Commission of Inquiry into the finalisation of boundaries between the provinces of KwaZulu-Natal and the Eastern Cape. This action was not successful because KwaZulu-Natal was under the control of a different party at that time, therefore, the Eastern Cape remained in KwaZulu-Natal.]
Madam Deputy Speaker, hon members, the objectives of the Constitution Twelfth Amendment Bill and the background to the Bill have been adequately addressed by the Deputy Minister and the Chairperson of the Portfolio Committee on Justice. I will just concentrate on the affected areas in my area of deployment, that is, in the Eastern Cape and KwaZulu-Natal.
Hamba uye kwisichazi-magama ukuba awuyazi intsingiselo yelo gama. [Consult a dictionary if you do not know the meaning of that word.]
Umzimkhulu is presently in the Eastern Cape. It is an island between the towns of iXopo and Kokstad, which are in KZN. The boundary is distinct, even on the N2 between Kokstad and Durban. [Interjections.]
Ewe ndiyayazi ukuba yiXopo. [I know that it is iXopo.]
You travel for 10 km from Kokstad in KwaZulu-Natal and after 10km you come to the Eastern Cape on the same road, on the N2. On numerous occasions, people have suffered when there were accidents in the area, because it had to be determined, before the people were taken to hospital, whether they had to be taken to Rietvlei in the Eastern Cape or to Kokstad hospital in Kwazulu-Natal. The new proposal, therefore, to integrate Umzimkhulu with KwaZulu-Natal will go a long way to change the lives of the communities of Umzimkhulu.
The change will facilitate provision of services to communities in an equitable and sustainable manner, as well as integrating social and economic development, as the Deputy Minister has indicated. It’s not that the Eastern Cape did not, or could not do that, but that there have been practical realities in the affected areas.
This resulted in unhappiness and disgruntlement in some areas, not in all areas, because the Eastern Cape has made some delivery in those areas. Perhaps I can just mention a few of the constraints that were there.
Firstly, it takes six to seven hours to drive to Bisho from Umzimkhulu. A lot of time is wasted on the road by all parties, not only the people of Umzimkhulu but also the people from Bisho. There are also costs involved, because if you have to go there you have to stay in Bisho and then pay for the hotels. On the other hand, it takes one to two hours to drive to Pietermaritzburg, KwaZulu-Natal headquarters, and far-flung areas that are further in the north, only take 30 minutes to drive to Pietermaritzburg.
Secondly, the Department of Justice has already taken the lead in addressing the travelling problem by passing a resolution to transfer the High Court from Umtata to Pietermaritzburg for the area of Umzimkhulu as well as Matatiele.
The situation in Matatiele is similar to that in Umzimkhulu in terms of travelling to Bisho and proximity to business centres in Durban and Pietermaritzburg, but the legacy of apartheid has left a very skewed situation there. The rural areas of Matatiele have been excluded from the town since 1976, and a small administrative centre was set up at Maluti.
However, the proposals of the Demarcation Board to integrate Maluti and the town of Matatiele to form one municipality has been welcomed and there is no contention in that area, the only contention being the incorporation of Matatiele into the Eastern Cape.
In conclusion Madam Deputy Speaker, we need to learn lessons from this process, that is . . .
. . . amalungu ePalamente, kuqukwa namalungu eqela eliphikisayo, nawo abhatalwa yile Palamente nyanga nenyanga, kufuneka afundise abantu ukuze baqonde ukuba le mida yimida yethutyana, ngoba kaloku uMzantsi Afrika lilizwe elimanyeneyo. Ibalulekile ke ngoko into yokuba sibafundise abantu bethu, singabatheli nqa xa besenza itoyi-toyi. Nathi sisilele ukudlala indima eyethu yokubafundisa, including you, on my left hand side. [kuqukwa nawe, kwesokunxele sam.] Enye into ebalulekileyo kukususa la ngqondo ebantwini bethu ethi la maphondo yiyona nto esiza kuphila ngayo kwaye kufuneka ahlulwe ngokobuhlanga.
Ngoku sifikelele kwixesha apho kufuneka sihambe siye kwi-Afrika yonke iphelele, nakwilizwe ngokubanzi. Ngale ntsasa, abantu abazimamelayo iindaba nabanomdla kwizinto ezenzeka eMzantsi afrika, simvile uMphathiswa wezaBasebenzi, uTata uMdladlana, ethetha eJiniva ngenjongo yobukho bakhe phaya.
Uyabona ke, ukuba siza kubayeka abantu becinga apha kwabo, ngokuthi: “Mna ndingowaKwaZulu-Natala; mna ndingowaseMpuma; mna ndingowaseGauteng; mna ndingowaseMntla Koloni.” Ezo zinto kufuneka sizihlenxisile. Loo nto iya kwenzeka ngokuthi sibafundise ngalo lonke ixesha abantu bethu. Enkosi. [Laphela ixesha.] (Translation of Xhosa paragraphs follows.)
[ . . . members of Parliament, including those of the opposition, whose salary this Parliament pays each and every month, should educate people about cross-boundary municipalities as that is one of their delegated functions, namely that they are temporary as South Africa is a united country. It is important for us to teach our people, and we should not be surprised when they engage in protest action. We are at fault for not having played our role in educating them, and that includes you on my left. We should also erase from people’s mind the idea that the provinces should be divided along racial lines.
We have to realise that we need to engage with the rest of Africa and the rest of the world. This morning, the news reported about Minister Mdladlana’s visit and presentation in Geneva.
It would not be proper for us to allow people to claim to belong to certain provinces, say, KwaZulu-Natal, the Eastern Cape, Gauteng and the Northern Cape. People will know about the effects of that only if we teach them. Thank you. [Time expired.]]
The DEPUTY MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Deputy Speaker, may I start by thanking everyone for their participation and by assuring you that all these views will be taken into consideration and looked at afresh to see if there is something that has to be changed. I would also like to thank particularly those parties who have supported these constitutional amendments.
It is very difficult to understand the attitude of those parties who have not supported these amendments. It really defies all understanding. As I stand here now, everything you have said amounts to nothing. You might not vote for it, but no objective in this Bill stands challenged. No principle in this Bill has been rejected by your not voting for it.
On the other hand, the changes are reasonable. In fact, some of you have said in your speeches that you supported them, that they were in the public interest and that they promoted the ideals of coherency, effective co- ordination and rational administrative arrangement.
It creates legal certainty to remove the double legal systems that apply in these cross-boundary municipalities, and, therefore, the only conclusion one can arrive at is that either they do not understand what they are doing, or they are guided by opportunistic self-interest and not by the public good.
Let me, for example, respond to the hon Mr Joubert. He has said that we fast-tracked the Bill. Sir, you should go and look at the Rules. There’s a specific fast-tracking mechanism in the Rules that has not been used on this occasion.
Secondly, you have said that timeframes have not been met. You must go and read section 74 of the Constitution. We had to amend the Constitution to create procedural protection for constitutional amendments. They are in section 74. Every single one of them has been complied with, and in good time. Regarding the issue of consultation, consultation is not an end in itself. It is obviously an important mechanism in any democratic country, but at some stage during a consultation process, government has to go ahead and govern. It has to do so rationally, and it has to do so weighing up all the facts.
Now, to suggest that the consultation process started some time in August this year is ridiculous. The consultation process on all boundaries is work in progress. We are a new democracy. We started long before 1994 with these processes. We experimented with cross-boundary municipalities, six years later we found out that they did not work, and that they were problematic.
So, one takes all that knowledge, gained over a long period of time - all the consultation that our majority party and government have had in all these areas - and at some stage you say this is where we think we have to go. We will be judged by history whether we did the wrong thing or not. So, consultation is vital, but consultation is not an end in itself.
Then again, all of you seem to forget that we don’t draft the municipal boundaries. They are drafted by an independent authority, namely the Demarcation Board, in terms of the Constitution. They have also consulted these communities many a time, and will come to the conclusions they will come to. We also had the astounding proposition from two members that the constitutional principles still remained binding on us and that if these constitutional principles were undermined, somehow the negotiation process had gone up in flames.
I would like to remind members that the constitutional principles were part of the interim Constitution, and the Constitutional Assembly was part of the interim Constitution. The Constitutional Assembly had to draft a constitution that complied with those principles. The interim Constitution was then replaced by the final Constitution. In the final Constitution there is no Constitutional Assembly and there are no constitutional principles. The constitutional principles have not, either by implication or expressly, been included in the present Constitution.
The only matter that we deal with that creates principles against which we judge constitutional amendments is section 1 in the Constitution. If this amendment is somehow inimical to any principle in section 1 of the Constitution then you can say that we are undermining that principle, but you can’t take something in the interim Constitution, which has long gone in the past, and suggest that somehow a process exists here. Even if that applied, I would reject any idea that we are undermining any principle in the negotiating process.
Let me just say, once again, that this is not a simple issue. There are a lot of emotions involved and a lot of political involvement, and so on, and we are very serious in trying to make sure that we do this properly. But not one of you mentioned it; some of you even said that we had a lot of time to look at this thing.
The Constitution tells us we must have had an election by 6 March. What are you proposing? Must we amend the Constitution and move that date on somehow to allow you to go on with this process? [Interjections.] No, none of you would say so. So, please, when you make suggestions make them as rational beings and make them as people that are reasonable so that there are things that we can listen to. Thank you very much. [Applause.]
Debate concluded.
Question put: That the Bill be read a second time.
Division demanded.
The House divided:
The DEPUTY SPEAKER: Order, hon members! The results of the division are as follows:
AYES - 266: Abram, S; Ainslie, A R; Anthony, T G; Arendse, J D; Asiya, S E; Asmal, A K; Balfour, B M N; Baloyi, M R; Bapela, K O; Benjamin, J; Beukman, F; Bhamjee, Y S; Bhengu, F; Bhengu, P; Bhoola, R B; Bloem, D V; Blose, H M; Bogopane-Zulu, H I; Bonhomme, T J; Booi, M S; Botha, N G W; Burgess, C V; Cachalia, I M; Carrim, Y I; Chalmers, J; Chauke, H P; Chikunga, L S; Chohan-Khota, F I; Combrinck, J J; Cronin, J P; Cwele, S C; Dambuza, B N; Davies, R H; De Lange, J H; Diale, L N; Didiza, A T; Dikgacwi, M M; Direko, I W; Dithebe, S L; Ditshetelo, P H K; Dlali, D M; Dodovu, T S; Du Toit, D C ; Fihla, N B; Frolick, C T; Fubbs , J L; Gabela, L S; Gaum, A H; Gcwabaza, N E ; George, M E; Gerber, P A; Gillwald, C E ; Gogotya, N J; Gololo, C L; Gomomo, P J; Goniwe, M T; Greyling, C H F; Gumede, D M; Gxowa, N B; Hajaig, F; Hanekom, D A; Hangana, N E; Hendricks, L B; Hendrickse, P A C; Hogan, B A; Holomisa, S P; Jacobus, L ; Jeffery, J H; Johnson, C B; Johnson, M; Jordan, Z P; Kalako, M U; Kasienyane, O R; Kasrils, R; Kati, Z J; Kekana, C D; Khoarai, L P; Kholwane, S E; Khumalo, K K; Khumalo, K M; Khumalo, M S; Khunou, N P; Komphela, B M; Koornhof, G W; Kota, Z A; Kotwal, Z; Landers, L T; Lekgetho, G; Lekgoro, M K; Lekgoro, M M S; Lishivha, T E; Louw, J T; Louw, S K; Ludwabe, C I; Luthuli, A N; Mabe, L; Mabena, D C; Mabuyakhulu, D V; Madella, A F; Madlala-Routledge, N C; Maduma , L D; Madumise, M M; Magau, K R; Magubane, N E ; Magwanishe, G B; Mahlangu-Nkabinde, G L; Mahlawe, N M; Mahote, S; Maine, M S; Maja, S J; Makasi, X C; Makgate, M W; Malahlela, M J; Maloney, L; Maloyi, P D N; Maluleka, H P; Maluleke, D K; Manana, M N S; Manuel, T A; Mapisa-Nqakula, N N; Martins, B A D; Maserumule, F T; Mashangoane, P R; Mashigo, R J; Mashile, B L; Masutha, T M; Mathebe, P M; Mathibela, N F; Matlala, M H; Matsemela, M L; Matsomela, M J J ; Maunye, M M; Mayatula, S M; Mbete, B; Mbombo, N D; Mdladlose, M M; Mentor, M P; Meruti, M V; Mfundisi, IS; Mgabadeli, H C; Mkhize, Z S; Mkongi, B M; Mlambo-Ngcuka, P G; Mlangeni, A; Mngomezulu, G P; Mnguni, B A; Mnyandu, B J; Moatshe, M S; Modisenyane, L J; Mofokeng, T R; Mogale, O M; Mogase, I D; Mohamed, I J; Mohlaloga, M R; Mokoena, A D; Molefe, C T; Moleketi, P J; Moloto, K A; Monareng, O E; Montsitsi, S D; Moonsamy, K; Morkel, C M; Morobi, D M; Morutoa, M R; Morwamoche, K W; Mosala, B G; Moss, M I; Motubatse-Hounkpatin, S D; Mpahlwa, M B; Mshudulu, S A; Mthembu, B; Mthethwa, E N; Mufamadi, F S; Mzondeki, M J G; Ndou, R S; Ndzanga, R A; Nefolovhodwe, P J; Nel, A C; Nene, N M; Newhoudt-Druchen, W S; Ngaleka, E; Ngcengwane, N D; Ngcobo, B T; Ngcobo, E N N; Ngculu, L V J; Ngele, N J; Ngema, M V; Ngwenya, M L; Ngwenya, W; Njikelana, S J; Njobe, M A A; Nkem-Abonta, E; Nkuna, C; Nogumla, R Z; Nonkonyana, M; Nqakula, C; Ntombela, S H; Ntuli, B M; Ntuli, M M; Ntuli, R S; Ntuli, S B; Nwamitwa-Shilubana, T L P; Nxumalo, M D; Nxumalo, S N ; Nzimande, L P M; Olifant, D A A; Oliphant, G G; Oosthuizen, G C; Pahad, A G H; Pandor, G N M; Phadagi, M G; Phala, M J; Phungula, J P; Pieterse, R D; Pule, B E; Radebe, B A; Radebe, J T; Rajbally, S ; Ramakaba-Lesiea, M M; Ramgobin, M; Ramodibe, D M; Ramotsamai, C P M; Ramphele, T D H; Rasmeni, S M; Rwexana, S P; Saloojee, E; Schneemann, G D; Schippers, J; Schoeman, E A; Sefularo, M; Sekgobela, P S; September , C C; Shabangu, S; Sibande, M P; Sibanyoni, J B; Siboza, S ; Sigcau, S N; Sikakane, M R; Sisulu, L N; Skhosana, W M; Skweyiya, Z S T; Smith , V G; Solo, B M; Solomon, G; Sonjica, B P; Sonto, M R; Sosibo, J E; Thomson, B; Tinto, B; Tobias, T V; Tolo, L J; Tsenoli, S L; Tshivhase, T J; Tshwete, P; Turok, B; Vadi, I; Van der Heever, R P Z; Van der Merwe, S C; Van Schalkwyk, M C J; Van Wyk, A; Vundisa, S S; Wang, Y; Woods, G G; Xolo, E T; Yengeni, L E; Zita, L; Zulu, B Z.
The DEPUTY SPEAKER: In terms of section 53(2)(b) of the Constitution, I, as presiding officer, have a deliberative vote. I cast my vote in favour of the question. [Applause.]
Question accordingly agreed to.
Bill read a second time.
Dr C P MULDER: Madam Deputy Speaker, won’t it be in order for the ANC to thank the NNP for their six votes? [Laughter.]
The DEPUTY SPEAKER: Unfortunately, I can’t answer that for the ANC.
Mr J H VAN DER MERWE: Madam Speaker, you never told us how many members voted No. [Interjections.]
The DEPUTY SPEAKER: I think it is in order to mention that. The ayes were 266 and the noes 65, and there were no abstentions. Thank you for that correction.
NOES-65: Bhengu, M J; Bici, J; Blanché, J P I; Boinamo, G G; Botha, C-S; Camerer, S M; Chang, E S; Coetzee, R; Cupido, H B ; Davidson, I O; Delport, J T; Doman, W P; Dreyer, A M; Dudley, C; Ellis, M J; Farrow, S B; Gibson, D H M; Groenewald, P J; Harding, A; Jankielsohn, L; Joubert, L K; Kalyan, S V; Kohler-Barnard, D; Labuschagne, L B; Lee, T D; Lowe, C M; Lucas, E J; Madikiza, G T; Mars, I; Masango, S J; Minnie, K J; Morgan , G R; Mpontshane, A M; Mulder, C P; Mulder, P W A; Ndlovu, V B; Nel, A H; Opperman, S E; Rabie, P J; Roopnarain, U; Sayedali-Shah, M R; Schmidt, H C; Seaton, S A; Selfe, J; Semple, J A; Sibuyana, M W; Sigcau , Sylvia N; Simmons, S; Skosana, M B; Smith, P F; Smuts, M; Spies, W D; Stephens, M; Steyn, A C; Swart, P S; Swart, S N; Swathe, M M; Trent, E W; Van der Merwe, J H; Van der Walt, D; van Dyk, S M; Vezi, T E; Waters, M; Weber, H; Zulu, N E.
Dr R RABINOWITZ: Madam Deputy Speaker, on a point of order: I had a foot in the door, and there is a member who saw me. [Interjections.]
The DEPUTY SPEAKER: I beg your pardon!
Dr R RABINOWITZ: I had my foot in the door.
The DEPUTY SPEAKER: The foot?
Dr R RABINOWITZ: My foot in the door. And it was slammed in my face. [Laughter.]
The DEPUTY SPEAKER: Order! Hon members, hon Rabinowitz is raising a very important point here. The point is that she only had her foot in the Chamber when we needed the whole Rabinowitz in the Chamber. [Laughter.]
The CHIEF WHIP OF THE MAJORITY PARTY: Can I establish, Madam Deputy Speaker? I almost misheard her. I thought she was saying she was suffering from foot-and-mouth. [Laughter.]
ADJUSTMENTS APPROPRIATION BILL
(First Reading debate)
Mr N M NENE: Madam Deputy Speaker, hon Deputy President and hon members . . . [Interjections.]
The DEPUTY SPEAKER: Order!
Mr N M NENE: Madam Deputy Speaker, it is this issue of the foot in the door.
Let me start by saying that with regard to the Adjustments Appropriation Bill we are about to debate, a list of errata has been distributed to members to rectify certain errors that appear in the adjusted Estimates of National Expenditure, 2005. I would imagine that the House would have no problem in accepting that.
All it does is that it allocates the funds correctly, because in this red book – the Estimates of National Expenditure, 2005 - it is not properly captured, but in the Bill that we are about to debate it is properly captured. Those funds are the ones that are in Programme 7 of Vote 5, where the figure is written as R4,276 million. They have been split as they appear in the Bill. Also, as regards the shifting of funds – and not finds
- in Programme 4, that is, Systems and Capacity-Building, it is written as R26 million having been sent to Water Affairs. In actual fact, it is R13 million to Water Affairs and R13 million from Foreign Affairs.
Section 30(2) of the Public Finance Management Act of 1999 outlines clearly what national adjustments may provide for. These may range from, among others, unforeseeable and unavoidable expenditure, emergency situations, expenditure announced in the Budget Speech but not appropriated to the Vote, to the shifting of funds between Votes and the roll-over of unspent funds from the preceding financial year. It is therefore in accordance with this legislation that we consider this Adjustments Appropriation Bill today.
This process is further affirmation of the ANC government’s commitment to clean and transparent governance. We will recall that when the Budget was tabled in February 2005, in addition to appropriations of R415,3 billion in the main Budget, provision was also made for a contingency reserve of R2 billion and other allocated funds of R0,5 billion.
Considering that we have approved roll-overs of R1,4 billion, additional allocations for unforeseeable and unavoidable expenditure of R1,1 billion, infrastructure investment of R1,1 billion and self-financing expenditure of R0,7 billion, we end up with an expenditure revised downwards. This allows government an opportunity to address the needs of the country from a much more comfortable position. It all amounts to a government that is committed to the contract that we signed with the people of fighting poverty and creating work.
Each of these adjustments is clearly explained for members of this House in their adjusted Estimates of National Expenditure I was referring to that was tabled together with the Medium-Term Budget Policy Statement.
I would want to believe that in their oversight task, members would have read this document as it provides answers to some of the questions with regard to expenditure that might not necessarily be explained in the normal processes. I trust that having done so, members of this House will also hold departments to account for these adjustments in relation to their mandates of delivering services to the people of South Africa.
I do not want to bore this House with individual Votes, as there is a process that will follow this one where wise questions will be asked, and if silly questions are asked, there will be no need for answers.
The committee was satisfied with these adjustments and implores this House to adopt them in the interest of the public. We are, however, of the view that adjustments would be better dealt with by the Joint Budget Committee, as they fit into its mandate and in terms of monitoring and expenditure. We therefore submit that the process of allocating functions between the Portfolio Committee on Finance and the Joint Budget Committee be addressed as a matter of expediency. The ANC supports the Adjustments Appropriation Bill. I thank you, Deputy Chairperson. [Applause.]
Mr I O DAVIDSON: Mr Chairman, the total estimated expenditure of government tabled in the February Budget was R417,8 billion.
The Bill provides for an extra R4,2 billion to be allocated to the various Votes, but as a result of a reduced debt cost of R1,3 billion, a R2, 5 billion reduction in the contingency reserve and projected savings and underspending of R2,5 billion, there is a net decrease in the Appropriation Bill of R2,1 billion, resulting in the overall budget being reduced from R417,8 billion to R415,7 billion.
While the DA supports the Bill overall, as there is no further strain on the fiscus, and therefore ultimately in the long-term, on the taxpayer, serious questions and various comments are going to be raised on the individual Votes when the House considers each of the Votes and the Schedule.
Let me add that the DA is not happy with the process for the introduction of the Adjustments Appropriation Bill. Adjustments are allowed in circumstances set out in terms of section 30(2) of the Public Finance Management Act. But the process does not allow either the Finance Committee or the relevant individual portfolio committees to adequately interrogate either the savings and underspending or indeed the adjustments and reallocations proposed in this Bill.
Yes, of course, a document is tabled, but very often the descriptions there are cryptic and what is needed is a thorough interrogation if we are going to oversee our mandate correctly. We will be calling in the long-term in the Portfolio Committee on Finance for a review of the process and, if need be, an amendment to the Public Finance Management Act. Thank you.
Mr T E VEZI: Deputy Chairperson, the Adjustments Appropriation Bill provides for various kinds of changes to spending plans detailed in section 30(2) of the Public Finance Management Act.
The IFP notes that the total adjustments from national departments amount to R2,9 billion that adjustments are offset against contingency reserve, unallocated amounts, declared savings and projected underspending, and that adjustments resulted in a decrease in expenditure from R418 billion to R416 billion.
The IFP supports the Adjustments Appropriation Bill and hopes that its concerns raised in various departments will be addressed. I thank you, Deputy Chairperson.
Mr S N SWART: Chairperson, the ACDP welcomes the fact that after projected in-year savings, lower interest costs, the contingency reserve and other unallocated amounts, total spending is anticipated to be R2,1 billion less than the budget estimate, or R415,8 billion.
We support various recommendations of the National Treasury Committee, for example the R311 million proposed to contribute water supplies in municipalities affected by drought, R40,7 million for emergency infrastructure repairs in the Western Cape, as well as R32 million going to the Disaster Relief Fund.
Clearly, the R140 million proposed as a contribution to the World Food Programme is without doubt necessary, as well as the R120 million going to Agriculture for farmers affected by drought.
The supplementary amount of R200 million recommended for the Primary School Nutrition Programme is of course very necessary and critical to support children that have dietary deficiencies.
The ACDP will support this Bill. I thank you, Chairperson.
Mr M T LIKOTSI: Chairperson, the PAC supports this Adjustments Appropriation Bill. When the Minister of Finance first tabled this Bill in the House, he was delighted that our countrymen have answered the call to submit their tax returns and that has brought positive spin-offs for the country.
The PAC extends this call to all other people in the country and the business community who may make a big contribution to the economic development of the country to abide by the revenue laws.
The PAC further calls on the government of our country to be vigilant and proactive to prevent misuse and maladministration of scarce state revenue. The PAC supports the Bill. Thank you, Chairperson.
Ms S RAJBALLY: Chairperson, in terms of the Adjustments Appropriation Bill, the MF finds the adjustment made to the central government administration reasonable. However, concern is expressed on the large decrease in capital payment of Home Affairs, noting the need in the sector for improvement in software and other physical assets.
All adjustments made to the financial and administrative services are found to be appropriate and thus supported. However, concern is expressed when we look at the social services as, in the light of the notable worry of unemployment and the major decrease in Labour’s total Vote, transfers and capital payments made are not understood.
Further noting the important need for infrastructure development, the decrease in capital payment to education is a concern. We further acknowledge a decrease in the funding of infrastructure and maintenance of hospitals and are concerned about whether this does not indicate a shortfall of delivery in this sector.
Adjustments made to Justice and protection services are supported and the adjustment appropriation made the economic services and infrastructure development appears to be in order. The MF hopes that all adjustments made shall suffice to increase service delivery and the attainment of our goals for this financial year.
The MF supports the Adjustments Appropriation Bill. [Applause.]
The MINISTER OF FINANCE: Chairperson, I think the point to make about this particular adjustments estimate is that, as confirmed by a number of speakers, it’s proof that the Public Finance Management Act is working, though there are elements, hon Davidson, where my submission would be that Parliament is not equal to the task.
We publish, on a monthly basis, actual expenditure reports that would allow Parliament at any time to engage here with the trends of spending; what savings are likely, what the spending and infrastructure are and whether there is a risk of overexpenditure. This is done in the letter and spirit of the Public Finance Management Act but, more importantly, in the context of empowering Parliament.
The hon Nene spoke about the fact that we need to sort out the work between the Portfolio Committee on Finance and the Joint Budget Committee. I want to support that because we have a capability to do so. We have the actual information and some of it would be in the Joint Budget Committee collectively, while some of it ought to be referred to particular portfolio committees, but Parliament is not doing that.
What we have here is, in many respects, unprecedented. If one looks at what happens in fiscal management around the world, for a country, firstly, to have a single adjustments estimate within a fiscal year and, secondly, to do what we are doing here to reduce the amount that we are spending from R417,8 billion to R415,7 billion, is quite unprecedented.
Also, if we look at the amount allocated in this adjustments estimate for unforeseen and unavoidable expenditure, it’s around R1 billion or 0,4% of the total national expenditure of R225 billion – it’s a miniscule amount. It must say to this House that the Public Finance Management Act is working and that it needs to be supported.
If that is working, the very next stage that we must engage with is the quality of spending. Here, I want to echo what the hon Rajbally said: Spending on infrastructure is exceedingly important. If we fail at that, we will fail in providing quality of life to people. It’s not a money problem, it’s a quality problem. And I believe that the oversight role of this Parliament is accentuated by what we have before us, a broadly supported adjustments estimate. I trust that in the questions, line by line, we will support the Adjustments Appropriation. Debate concluded.
Bill read a first time.
ADJUSTMENTS APPROPRIATION BILL
(Consideration of Votes and Schedule)
The HOUSE CHAIRPERSON(Mr K O BAPELA): The proceedings will initially take the form of a question and answer session. I shall put each Vote in turn, whereupon members will have the opportunity to put questions to the relevant Ministers. Members must please press the request-to-speak button if they wish to ask a question. Hon members should please wait until I recognise them before putting their question.
Vote No 1 – Presidency – put and agreed to.
Vote No 2 – Parliament – put and agreed to.
Vote No 3 – Foreign Affairs – put and agreed to.
Vote No 4 – Home Affairs – put and agreed to.
Vote No 5 – Provincial and Local Government put:
Mr W P DOMAN: Thank you very much, Chairperson. Minister Mufumadi, under programme 7 of the adjusted estimates it is reflected, as we have just heard, that R1,26 million has been transferred to the Municipal Demarcation Board to address the problem of cross-boundary municipalities.
Given that you have known since 2002 that cross-boundary municipalities would be abolished, why did you not get your department to budget timeously for this, and in so doing avert the present crisis in Khutsong, Matatiele and other cross-boundary municipalities?
The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Chairperson, the hon member is conflating his own prejudices with a legitimate question. There is no crisis anywhere in the country. There are people who have got preferences in terms of where they want to go, which province they want to belong to and they are entitled to express those preferences.
What we have done in the process of consultations, including with the people of Khutsong, was to explain to them what mechanisms and processes are available to them and it is the processes that were crafted by hon members of this House, some of whom have conveniently forgotten that there are such processes. All of a sudden they talk about referenda and other such things, which are not provided for in the legislation.
So, you can imagine if there is such an overwhelming level of ignorance at the level of your party in particular, then there is a need for the sort of consultations that we have been undertaking. So, there have been intense consultations with communities. It is just that your own party has been conspicuous by its absence in the areas where such consultations were taking place.
Mr S SIMMONS: Chairperson, has the hon Minister implemented any measures to address the poor levels of service delivery that came about due to the appointment of incompetent public servants at provincial and local government level?
The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Chairperson, I don’t why know the hon member has such a proclivity for irrelevancy. What does this has to do with issues under my Vote?
Mr H B CUPIDO: In view of the drastic skills shortage at local government level, does the Medium-Term Budget adequately address the situation which negatively impacts on service delivery and the lives of all South Africans?
The MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Chairperson, we are discussing the adjusted estimates, not the MTEF. Please, shall we stick to what is before the House?
Agreed to.
Vote No 6 – Public Works – put and agreed to.
Vote No 8 – National Treasury – put and agreed to.
Vote No 9 – Public Enterprises:
Prof E S CHANG: Chairperson and hon Minister, we are all deeply concerned about Denel. Apart from it not finishing its annual report on time, does the hon Minister think that Denel is a viable enterprise, especially in the light of its funding crisis?
The MINISTER FOR PUBLIC ENTERPRISES: Chairperson, yes, we do think that Denel is a viable enterprise in terms of the comprehensive restructuring proposals that we have put forward. Obviously, we are in a position at the moment of considerable financial difficulty. We intend changing that and we have had the assurance of the Treasury that they’ll support us under very strict conditions. So, if we can satisfy the Treasury, I am sure we can satisfy you.
Agreed to.
Vote No 10 – Public Service and Administration – put and agreed to.
Vote No 11 – Public Service Commission – put and agreed to.
Vote No 13 – Statistics South Africa – put and agreed to.
Vote No 14 – Arts and Culture – put and agreed to.
Vote No 15 – Education put:
Ms H ZILLE: Chairperson, the DA supports the R200 million increase in the baseline allocation to feed children in schools. While millions are being added to the feeding scheme, constant cutbacks on food are regularly reported because of an alleged funding shortage.
We would like to ask the Minister what she is doing, apart from spending over R1 billion on vehicles to monitor the scheme, to ensure that the endemic corruption and mismanagement of the scheme comes to an end?
The MINISTER OF EDUCATION: Chairperson, I would welcome the hon member providing me with the exact figures that indicate that R1 billion has been spent on vehicles. So, if she could provide me with that information I would certainly investigate the matter and I would return to the House and make a statement. I would welcome that information with respect.
I think the hon member should be aware, and probably is, that the programme agreed to with respect to the national school-feeding programme does not provide for feeding of children in our schools for the entire number of school days in a calendar year. Therefore, you often had the situation where provinces have chosen particular periods in which they feed.
The additional allocation will allow particularly the poorest province, the Eastern Cape, which feeds the largest number of poor schools, to continue its feeding programme and not stop, as had been the likely prognosis had we not received this support.
We also, with the R200 million, will be able to assist other schools. The hon member also, being a member of the committee, will be fully aware through reports we have provided to the committee, that we have improved our monitoring processes with respect to the national school-feeding programme and that a large number of schools now have projects and are actually initiating their own additional feeding for children as well as support to communities.
So, we will continue with the monitoring and evaluation and ensuring that as many of our schools as possible have school gardens as part of the infrastructure, water and sanitation process. All of this is of course part of what we intend to do to ensure that our children are healthy and learning in our schools.
I thank the hon member for the support for the rest of the programmes.
Agreed to.
Vote No 16 – Health - put:
Ms D KOHLER-BARNARD: Chairperson, this Adjustments Appropriation is a reflection of the utter chaos the Department of Health wallows in as it once again received a qualified audit report reflecting zero control over revenue received, lack of planning, unclaimed benefits and the renting of unutilised buildings.
Despite the HIV/Aids pandemic killing 1 000 a day, R10 million was spent on condoms that didn’t arrive. There was the return of R78 million from KZN, reflecting the failure of the Hospital Revitalisation Programme because, of course, Public Works doesn’t do its work. Tenders were mishandled and unqualified staff simply forgot to purchase software programmes and conditional grants were withheld from two negligent provinces, North West and Mpumalanga, for failing to provide business plans.
Will the Minister, at the very least, assure this House that as with global business best practice there were substantial penalties relating to, for example, the nondelivery of R10 million worth of condoms and inform us that this delay will not push the crippling HIV infection rate in this country still higher?
The DA has no option but to vote for this enormous unutilised amount of R120 million, because the people need it, even if the Department of Health is incapable of handling it.
The MINISTER OF FINANCE: Chairperson, part of hon Barnard’s problem is that she follows the kinds of stories that the hon Nqakula referred to earlier. They are not based on fact at all. Here I have the document before me. The issues that she is raising are not in the adjusted estimates.
In respect of the Hospital Revitalisation Programme, if the hon Barnard bothered or had the capability to familiarise herself with the Division of Revenue Act, she would know that an adjustment was effected in the way in which the Act is structured with effect from this year. In the past some provinces were doing better at Hospital Revitalisation than others. We introduced a mechanism in the Act this year that allows for movement of resources between one province and the next, depending on the speed of roll- out of the revitalisation programme.
But I do not know why I’m going into the facts. She is not interested in the facts. She’ll never allow the facts to get in the way of a good story. She is a bad journalist and always has been. The facts won’t get in the way of a good story and I don’t think any purpose can be served in trying to convince her of what the published facts are.
Dr R RABINOWITZ: Chairperson, I wonder if the Minister could tell us what the hold is of the cellphone industry, - Vodacom, MTN and Cell C - over the Minister of Health that has resulted in her reneging on her responsibility to regulate the industry as from November 2003. As a result, no labels are placed on cellphones indicating the amount of radiation emitted.
Cellphone masts are being planted anywhere and everywhere at any height and any level, close to schools and close to densely populated areas. Now, this is a result of the cellphone industry putting in a complaint against the way they were being regulated under the Hazardous Substances Act. Since that time, the Minister has cancelled all licences and instead of regulating the industry, offers advice according to the World Health Organisation guidelines.
Well, has the Minister read that the WHO warns that children suffer brain damage from overuse of cellphones and that there is no proof that cellphones do cause damage or that they don’t? Are the interests of the industry more important than the interests of the vulnerable public who are becoming addicted to cellphones?
The MINISTER OF FINANCE: Chairperson, I hope that the hon Rabinowitz has not been subjected to too much cellphone radiation, because I think that the question belongs under Vote 26, which is the Communications Vote.
Recently this Parliament approved the Telecommunications Convergence Act, and in the Act, the positioning, including environmental impact assessments of the placement of cellphone repeaters, etc, are all covered in the Act.
So, the industry is regulated by the Minister of Communications, nay, by Icasa, as hon Smuts would insist we correctly record, but the Convergence Act deals with all of these matters. So, may I suggest in humility that the question is misplaced?
Mrs C DUDLEY: Chairperson, as the hon Minister is aware, new HIV infections in South Africa continue to occur at an estimated 400 000 a year with more than 1 000 people being infected every day. South Africa probably has more people living with HIV than any other country, with estimates of up to 6,3 million. In addition, as many as 800 000 people now have Aids and therefore require highly active antiretroviral treatment without which nearly all will die within a few years.
Presently, only an estimated 130 000 people are said to be receiving ART. This leaves over 600 000 people without treatment. Does this Adjustment Budget provide for the necessary measures to address this shortfall?
The MINISTER OF FINANCE: Chairperson, the 130 000 people on antiretroviral treatment in a public facility is still the largest number in the world today. There is nothing else that matches it, but I want the hon member to understand that this is not the admission or the provision of aspirin and paracetamol. These are antiretrovirals that require a sound health system, including lab testing, counselling and a myriad of other elements. Now, if you go back to the report released on provincial budgets a few months ago, you will see the poor distribution of health professionals through the provinces.
This is something you have to work at - if the professionals are not there and you can’t have response times on lab testing facilities and you can’t provide adequate counselling, to hope that you can spend your way out of trouble because you have enriched pharmaceutical companies will not deal with the problem.
Essentially, what we have to do . . . All of your numbers, with great respect, are poppycock. Like the hon Barnard’s number of 1 000 deaths a day is poppycock. Your numbers, hon member, are poppycock. What we need is a situation that allows for a greater focus on education and therefore prevention, because ARVs are not a cure, they merely extend the life of the patient. But along with it, there are a series of other issues including nutrition generally improved quality of life etc.
Now, stop focusing narrowly on what will enrich the pharmaceutical companies and let’s hold hands together and decide how we will tackle this scourge of HIV/Aids in society. [Applause.]
Agreed to.
Vote No 17 – Labour – put:
Mr C M LOWE: Chairperson, if one looks at Vote 17 one sees that R50 million in savings has been made. Minister, I am looking at page 102 of the booklet. It is not a lot of money but it is still R50 million.
Now, two areas where the department continues to fall down are the Unemployment Insurance Fund and the Compensation Fund, specifically in getting service to people and in getting moneys paid to people who need it. Both departments have received qualified audit reports and both report serious breakdowns in internal control accounting systems and one of them has a forensic investigation under way. Both are of vital service to the man and woman on the street.
Now, Minister, I see that the Minister of job losses and unemployment creation is not here. I hope he hasn’t lost his job too. But perhaps you could just ask why we can’t put more money towards providing better services at the coalface and backing up the systems for those two departments, because it seems continuously that there are problems in getting service to people.
The MINISTER OF FINANCE: Chairperson, regarding both the Unemployment Insurance Fund and the Compensation Fund, the social insurance funds in the Department of Labour are essentially self-financed. If you look at the breakdown by programme of the department, the bulk of it is spent on facilities like training, works and safety, inspectorates, etc.
The key issue in respect of both the Compensation Fund and the UIF is that they are running huge surpluses at the moment. So, there are issues to be resolved in respect of general administration. The hon member would have been part of a decision led by the labour committee and now incorporated into the Unemployment Insurance Fund Act, that has changed the benefit structure and part of the result of this is that we are building up this surplus in the UIF. So, it’s partly an administration problem and partly a situation that arises from certain amendments to the Act.
In respect of the Compensation Fund, it is work in progress. I think that the changes in the leadership of both these institutions, stand alone agencies as they are, will see improvements in general administration. But in respect of the Compensation Fund, I am sure that, arising from the forensic investigation, certain matters will come to light.
But it is not possible for the department to take savings on one Vote and construct an environment, which would allow for additional funding, because it’s not the amount of money in either of those large funds; it’s the ability to get them through and sometimes the ability or quality of applications for funding in respect of the two funds.
Agreed to.
Vote No 18 – Social Development – put and agreed to.
Vote No 19 – Sports and Recreation South Africa – put and agreed to.
Vote No 20 – Correctional Services put: Mr J SELFE: Chairperson, in a recent presentation to the portfolio committee, the civil society Prison Reform Initiative urged the department to increase the budgetary allocation to Programme 6 - Aftercare, or Social Reintegration, as it is now to be known.
This is to ensure that greater numbers of appropriate offenders could be considered for alternative sentencing. This in turn would help to reduce prison overcrowding. Unfortunately the budget allocation for this programme has been reduced in real terms over the past three years.
Now, this adjustment seeks to shift a further R28,35 million away from aftercare to Programme 3 - Corrections. I wondered whether the Minister would give us the assurance that the process of reintegration of offenders and alternative sentencing will be properly resourced in the future.
The MINISTER OF CORRECTIONAL SERVICES: Chairperson, I definitely will give that kind of confirmation. One of the areas we are looking at is to make sure that the judiciary and the magistracy do have options when some of these offenders end up in front of them.
I have just appointed a new person in Corrections because that is the whole element that I want to overhaul and make sure that reintegration, care and aftercare really take the bulk of the budget of correctional services, because we believe that the best way of dealing with overcrowding is by having the magistrates and judiciary have confidence in what they would do when they divert them to aftercare or when parolees are released on probation.
So, I do want to confirm that I am in the process of doing exactly that. Thank you very much.
Agreed to.
Vote No 21 – Defence – put and agreed to.
Vote No 23 – Justice and Constitutional Development - put:
Mrs S M CAMERER: I am not sure which Minister is going to answer. I was intending to ask the Minister about the R50 million additional expenditure for the National Prosecuting Authority, and particularly the R20 million that was put aside for high-profile court cases. Perhaps the Minister can tell us which high-profile cases are referred to and how the money was spent.
However, I would also like to ask the Minister about an item that is not in this additional appropriation which surely should be; namely, the amount of approximately R170 million that is needed for the salary increases and car allowances for magistrates that was gazetted by the President on 22 August this year, and it’s now November and they have still not been paid. Presumably, the Minister of Finance could help us out there.
Apparently, the Minister claims that there is no money. The question is, why? And in the meantime the magistrates trusted the President of our country and the Government Gazette and bought cars because of the allowances that would have been given to them and now have been left high and dry. As a result, the magistrates are protesting vehemently at their unfair treatment at the hands of this government. If the money for this has not been allocated in this appropriation, when will it be? Thank you.
The MINISTER OF FINANCE: In respect of the first part of the question on high-profile court cases, I hope the hon Camerer is not on any list because it might be a high-profile court case if she appeared. I don’t know which these are, but there is a general allocation. I don’t think that we need to be specific about that.
In respect of the salary increases for the magistrates, the hon Camerer would be aware that magistrates are no longer just public servants but they are judicial officers and they are covered therefore by the same commission on remuneration of judicial officers and public office bearers.
Mrs S M CAMERER: [Inaudible.]
The MINISTER OF FINANCE: For that reason the salary increase of the hon Camerer is not in here as an adjustment estimate. Individuals or classes of contributors or recipients of emoluments covered by the commission are a direct charge against the National Revenue Fund. So, that is a direct charge. It’s not on the department’s Vote. It’s a direct charge against revenue and will be funded in that way when all of the matters are clarified. [Interjections.]
Mrs S M CAMERER: The question is when? That was my question.
The MINISTER OF FINANCE: Well, all of these issues are clarified. The hon member is a member of Parliament and I presume she doesn’t play truant when she should be in the Portfolio Committee on Justice. [Interjections.]
Mrs S M CAMERER: We are not dealing with that! [Interjections.]
The MINISTER OF FINANCE: If she is not playing truant, then I imagine that before she rises this year to go on holiday next week, this matter would have been resolved. Thank you.
Mr M J ELLIS: Mr Chairperson, on a point of order: I certainly respect the Minister of Finance for his being prepared to answer questions across the portfolios, but it’s quite clear from his first answer to the hon Mrs Camerer that he didn’t really know because he is not the Minister of Justice. Can I ask a simple question: Where is the Minister of Justice or the Deputy Minister? Why are they not here to answer the questions?
The HOUSE CHAIRPERSON (Mr K O BAPELA): Hon member, there are apologies that were tendered and the Leader of Government Business has written a letter that indicates the questions that the Minister of Finance would be responsible for. [Interjections.]
Mr M J ELLIS: Mr Chairperson, may I ask, should not the opposition parties have been given copies of those letters to indicate to us why these Ministers are not available? [Interjections.]
The HOUSE CHAIRPERSON (Mr B O BAPELA): Well, that is an outside arrangement that you could really make with the Speaker’s Office.
Mr M J ELLIS: I am not aware of any arrangement, Mr Chairperson. From the opposition’s side there is no arrangement. The Ministers just aren’t here this afternoon.
The HOUSE CHAIRPERSON (Mr K O BAPELA): All right, we will take that as noted and whatever arrangements you want, we can pursue them.
Vote No 24 – Safety and Security – put:
Mr R JANKIELSOHN: Thank you, Chair. With the increase in armed robberies across the country and the critical shortages of crime prevention personnel in some provinces, such as Gauteng with its almost 50% vacancy rate of crime prevention personnel, how do you justify the savings in visible policing and adjustment of funds from visible policing to administration and protection services? Surely, Minister, the safety of the public is more important than the safety of politicians. Could you perhaps explain this? Thank you, Chair.
The MINISTER OF SAFETY AND SECURITY: How I wish these hon members would listen when we provide answers to the questions that they pose. He thinks that the only thing that the protection and security services do is to protect VIPs. That is not true. We protect the national key points, which include the various airports – just last week I was responding to questions that relate to that.
In any event, what he does not understand here is the fact that we shift funds in order for us to respond to certain requirements and if he looked at that page he would have seen that we have been shifting money around, including shifting money that relates to the upkeep of mortuaries in this country. So I don’t understand what he is trying to say here.
The fact of the matter is that visible policing is an important programme insofar as we are concerned. That is why, in terms of the current allocation, we have received more than R13 billion, which is the biggest allocation relevant to the work that the police do. This is designed to ensure that we stop crime from happening. So, I do not understand what he is referring to and the facts are indicated in the booklet that he has. Thank you.
Mnu V B NDLOVU: Sihlalo, ngicela ukubuza mhlonishwa ngalesi sitatimende esithi ukukhushulwa kwemali kuzosiza ukuthi kuqashwe amaphoyisa amaningi. Kuzobuye kusize futhi ukuthi izinhlaka zokusebenza zamaphoyisa zikwazi ukuthi zikhokhelwe njengalabo abiziwa ngama ‘reservists’ nabanye. Kunemali eningi kabi esiyikhokhela izinkampani zokuvikela. Ngicela ukubuza ukuthi kungasiza yini lapho ukuthi sibe nabethu onogada abazogada lezi zinto ezifakwayo (installations) ezigadwa izinkampani zokuvikela, ukuze sikwazi ukonga imali ingayi ezinkampinini zokuvikela kodwa ilekelele amaphoyisa ekwenzeni umsebenzi? (Translation of Zulu speech follows.)
[Mr V B NDLOVU: Chairperson, I would like to ask the hon Minister a question concerning his statement that, “The budget increment will help to recruit more police. It will also help to pay salaries in other police structures like those who are called reservists.” Large amounts of money are being paid to security companies. I would like to know whether it would help to have our security guards protect installations that are protected by security companies, so that we will be able to save money and help the police do their work?]
The MINISTER OF SAFETY AND SECURITY: Well, we will never, at any stage, say that the money that we receive is adequate. But let me indicate that our allocation is quite commendable and with the allocation that we got during this financial year, we are going to be able to provide resources of both a human nature as well as a material nature in order for us to do our work.
But it should also be understood that we have laws in this country that have created space, among other things, for private security companies to operate in South Africa. I don’t know, maybe the hon member is picking up on the last interactions we had around the statement - because there was an issue that was raised by the hon Ditshetelo. If hon members believe that we should review that Act which accommodates private security companies in this country they should say so. The fact of the matter is that we cannot wish them away and we cannot define them out of existence.
Therefore, we have the police who do their work and other role-players, including private security companies, who also do their work. In terms of the broader work of the police, I believe that this allocation is quite commendable, apart from the fact that there was another allocation that we gave to members of the SAPS to ensure that we rationalise their salaries, and we believe therefore that what we have would assist us to do our work. Of course, we are working side by side with other role-players, including private security companies.
Agreed to.
The HOUSE CHAIRPERSON (Mr B O BAPELA): Thank you. The Minister for Justice and Constitutional Development has just arrived and I shall use my discretion to check if the hon member from the DA would still like to pursue the question. If so, you can do so, and if not then we can proceed. [Interjections.] All right, you do want to make a follow-up question?
Mrs S M CAMERER: Yes, thank you for accommodating me, Chair, and better late than never Minister, but I have got a question under your Budget Vote – the Additional Appropriation. Do you want to give her a moment, Chair?
The HOUSE CHAIRPERSON (Mr K O BAPELA): OK, I will give her a moment. Minister there was a question, which was raised earlier. So, I just want the member to raise it but then you don’t have to respond immediately if you want to just look at the question first.
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: I apologise for being late, I was in the NCOP much earlier on. I will take a breath; then I will hear your question and I’ll respond to it.
The HOUSE CHAIRPERSON (K O BAPELA): OK, I hope that would then be taken as a consideration.
Vote No 25 – Agriculture – put and agreed to.
Vote No 26 – Communications – put and agreed to.
Vote No 27 – Environmental Affairs and Tourism – put and agreed to.
Vote No 28 – Housing – put:
Mr A C STEYN: Thank you, Chairperson. An adjustment of an additional R74 million is made to the housing department in this Bill. In the bigger scheme of things that may seem like a small amount. However, of this amount almost 90%, R66 million, is to be transferred to one institution, Thubelisha Homes; R50 million for emergency housing - which is probably too little - and the balance of R36 million for a VAT adjustment - which is probably too much.
In the previous financial year, Thubelisha Homes had a debtors and underclaims book valued at R61 million, and a revenue underachievement of R46 million. The auditors have also previously expressed doubt about the company’s ability to continue as a growing concern. Hon Minister, can you therefore, firstly, give this House an indication what emergency housing this allocation is intended for? Secondly, a VAT allowance of R36 million implies expenditure of almost R260 million.
From past balance sheets of this institution, it is clear that the expenditure will not even be half the amount to justify the R36 million VAT adjustment. Can the hon Minister therefore assure this House that this adjustment is conditional and can therefore only be allocated against the loss of unclaimed VAT and not for operational costs?
The MINISTER OF HOUSING: Thank you, Chairperson. There are two points to this question. One is the viability of Thubelisha Homes; the second one is, what are the emergency houses that Thubelisha has been asked to deal with. I will start with the last one. Hon member, it is my intention to make a presentation to the committee on this matter because it’s a very important matter for me.
On 12 October, we got permission from Cabinet to proceed with our preparations for emergency housing. On a daily basis, we see shacks burning down in the Western Cape and in the Eastern Cape, and I am certain that as we sit here we are very concerned about it. We therefore requested Cabinet to allow us to use the emergency instrument to provide proper houses where there is obvious danger for people living in those areas - that is what we are trying to do. This is the R30 million that we are giving to Thubelisha to make sure that it is possible for it to assist us to build the capacity that we need when we build the emergency housing.
Now, the VAT adjustment is necessary if we are going to use Thubelisha to continue with the work that we want it to do. It is quite clear to me that it is better for us to increase the in-house capacity that we have than to try and outsource this work. I am certain that when we do our calculations, you and I, we will find that the R36 million that we are giving to Thubelisha for the VAT adjustment is money better spent than if we were to outsource this to some project manager.
Having said that, I am very grateful that the hon member has made mention of this because I did want to publicise this - that this government is very concerned about the conditions that our people are living in and that we are doing something about it, which is why we are grateful that we’ve been given this opportunity to build some decent houses for these people. Thank you.
Agreed to.
Vote No 29 – Land Affairs – put and agreed to.
Vote No 30 – Minerals and Energy – put:
Adv H C SCHMIDT: Hon Chair, in light of the roll-over of R20 million to finance a project to build a new power plant by 2008 when South Africa will require a new generation capacity, and particularly, in light of the major electricity outage last week Friday, is South Africa’s planning on track to prevent similar occurrences from happening more frequently in future? Thank you, Mr Chair.
The MINISTER OF MINERALS AND ENERGY: Thank you, Chairperson. Yes, indeed, South Africa is well set for the electricity distribution industry in the country. As you are aware, tonight we will be discussing one of the tools whereby we are aiming at ensuring that the incidences you are talking about, of blackouts and brownouts, don’t occur.
This is in part one of the strategies to actualise our energy policy whereby it was recognised that somewhere in the future - 2007 or 2008 - we will run out of capacity and as we run out of capacity Eskom will not have the capacity, so we needed to plan for new generation whereby we bring in independent power producers and look at renewable energy.
So, we have a strategy. We are well on course, and I can assure the member that part of the regulations that will come from the Electricity Regulation Bill will empower the Minister to set standards and norms to ensure that there is effectiveness and efficiency in the electricity production to ensure security of supply in the future.
Agreed to.
Vote No 31 – Science and Technology – put:
Mr E N N NGCOBO: Thank you, Chair. First, let me start by congratulating the Minister of Science and Technology on a job well done in so far as expenditure trends within the department are concerned, illustrating 100% expenditure. Well done indeed, hon Minister.
However, I would like to know whether you could share with the House whether the R37,9 million allocated for technology for poverty alleviation and R47 million for technology for sustainable livelihoods need not be increased to help extricate more people out of poverty, helping to create work especially in the second economy. Thank you.
The MINISTER OF SCIENCE AND TECHNOLOGY: Thank you, Chair. I can confirm for the hon member that issues of poverty and poverty eradication do occupy our minds, and we try our best from whatever platform and whatever mandate we have to make a contribution towards the eradication of poverty.
In the case of our department, the instruments that he mentions - technology for poverty alleviation and technology for sustainable livelihoods - are the instruments we employ to try to contribute towards that effort.
There are ongoing engagements which are very positive at all times to get more resources so that we have greater capacity to make that contribution. But, as the hon member knows, there are many competing worthy needs in our country. We are quite certain that these engagements will yield positive results. Thank you very much.
Agreed to.
Vote No 32 – Trade and Industry – put:
Mr L W GREYLING: Thank you, Chair. On the issue of the Trade and Industry Vote, we question the fact that another R580 million has been allocated to the pebble bed modular reactor, the PBMR. We questioned this last year as well, when R500 million was allocated. In fact, it jumped to R600 million in the budget. We question whether the government will be forced to bankroll this project, which is run on very . . . In fact, Jaco Kriek, the CEO, has even said that it is a very high-risk project. What guarantee can the government or the Minister give us that we will not be forced to bankroll this project ad infinitum? Thank you.
The MINISTER OF TRADE AND INDUSTRY: Chair, the work on the pebble bed modular reactor is ongoing work and it is long-term work. Part of what is going into that work are negotiations to ensure that we can get some of the major nuclear production companies in the world to be part of this pebble bed modular reactor, and that is ongoing work.
We are confident because the position that South Africa occupies in terms of the extent to which it has developed this kind of technology gives us confidence that we are going to be able to attract major investments to the PBMR.
As government we are committing funds to it, because we have the confidence that this is a technology of the future in which we must invest now. We will therefore continue to give support whilst we are also doing the work of attracting other investors to the project.
Agreed to.
Vote No 33 – Transport – put:
Mr S B FARROW: Thank you, Chair. I see the Minister of Transport and the Minister of Finance here, so maybe I should try to find out which one of them will answer this. This really relates to your announcement in your speech, Minister of Finance, pertaining to the Gautrain and the R20 billion that you have earmarked for it.
Where exactly is that money going to be channelled through? Is it going through the Minister of Transport, or will it be part of an equitable share delivered directly to the province of Gauteng? Maybe you can give me some clarity, more than anything else. Thank you.
The MINISTER OF FINANCE: Chair, I think the hon member is jumping the gun. The R20 billion is in the Medium-Term Budget Policy Statement. We are dealing with the adjustments estimate at the moment.
What we are doing in respect of that is that the amount is earmarked. Clearly, between now and 15 February, Budget Day, additional work will be done, and I think the Portfolio Committee on Transport last week raised the profile of a very necessary discussion on this matter.
Essentially, however, there is a change in the way in which we administer these kinds of projects. The same applies in respect of Coega, because hitherto the approach would have been one that required of provinces to finance these major projects out of their equitable share, and they can only do so if they sacrifice other services, especially social services.
What we are doing now - and this is the big change in the adjustments estimate - is to actually move these kinds of projects, when they are recognised as national projects, out of the sphere of provincial government only, carry them on the national Budget and recognise that the impact of a particular major infrastructure project may be specific to one province, but that it is a national project. So, it will be on national and in the adjustments estimate it will be part of a special kind of strategic infrastructure fund. Both Coega and the Gautrain would be part of that. Thanks.
Agreed to.
Vote No 34 - Water Affairs and Forestry – put:
Mr M W SIBUYANA: Thank you, Chair. Seeing that, contrary to the reply given by the hon Minister of Water Affairs and Forestry in this House concerning the water supply at the Sihlekiso Primary School, which is a voting station, would the hon Minister be kind enough to allocate certain funds in order to facilitate the smooth running of the local government elections?
The MINISTER OF WATER AFFAIRS AND FORESTRY: Chairperson, I cannot help the hon member in his campaign for the local government elections. The question is irrelevant, Chair. [Laughter.]
Agreed to.
Vote No 23 – Justice and Constitutional Development – put:
Mrs S M CAMERER: I’m indebted to you, Chair.
I was intending to ask the Minister about the R50 million additional expenditure for the National Prosecuting Authority and particularly the R20 million put aside for high-profile court cases, and I was hoping she could tell us which high-profile cases are referred to and how the money was spent.
However, I would also like to ask the Minister – and this was what the Minister of Finance attempted to answer in your absence - about the item that is not in the additional appropriation but surely should be, namely the amount of approximately R170 million needed for the salary increases and car allowances for magistrates which were gazetted by the President on 22 August but which have still not been paid.
Apparently, the Minister has claimed there is no money. In the meantime, magistrates trusted the President and what they read in the Gazette and bought cars and have been left high and dry. The magistrates are protesting vehemently at their unfair treatment at the hands of this government. The question is: if the money for this has not been allocated in this appropriation, when will it be?
The Minister of Finance tried to indicate that, as a member of the portfolio committee, I should know and that we should be discussing this. But actually, we have been told that we were not going to discuss it. There has been absolutely no progress. This was reported to us yesterday by the chair of the committee. So, perhaps the Minister could enlighten us on what is going on. Thank you, Chairperson.
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: I think your last question accompanied by the speech is irrelevant. I do not know whether you are campaigning. I am not sure you are. It is irrelevant because it’s not related to the . . . [Interjections.]
The R50 million relates to imperial holding, which is R30 million, and the R20 million is for unforeseeable expenditure. You should understand that in the area of investigations and forensics and specialised services, you have to have something in reserve. So, largely, the NPA would have this kind of cost in their books.
An HON MEMBER: And the high-profile cases? Which ones!
The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Well, that’s neither here nor there. [Interjections.]
Agreed to.
Schedule put and agreed to.
ADJUSTMENTS APPROPRIATION BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
DIAMONDS SECOND AMENDMENT BILL
(Decision of Question on Second Reading)
There was no debate.
Bill read a second time (Democratic Alliance and African Christian Democratic Party dissenting).
MEDIUM-TERM BUDGET POLICY STATEMENT
(Debate)
Mr N M NENE: Chairperson and hon members, this Medium-term . . .
Mr M J ELLIS: Mr Chairman, on a point of order: I thought that we were giving preference this afternoon to items 11 and 12. Consequently, we should now be on item number 12.
REPORT NO 30 OF PUBLIC PROTECTOR – PetroSA
(Decision of Question on Report of Portfolio Committee on Minerals and Energy)
The CHIEF WHIP OF THE MAJORITY PARTY: I move:
That the report be adopted.
Division demanded.
The House divided:
AYES - 267: Abram, S; Ainslie, A R; Anthony, T G; Arendse, J D; Asiya, S E; Asmal, A K; Balfour, B M N; Baloyi, M R; Benjamin, J; Beukman, F; Bhamjee, Y S; Bhengu, F; Bhengu , M J; Bhengu, P; Bhoola, R B; Bloem, D V; Blose, H M; Bogopane-Zulu, H I; Bonhomme, T J; Booi, M S; Botha, N G W; Burgess, C V; Cachalia, I M; Carrim, Y I; Chalmers, J; Chang, E S; Chikunga, L S; Chohan-Khota, F I; Combrinck, J J; Cronin, J P; Cwele, S C; Dambuza, B N; Davies, R H; De Lange, J H; Diale, L N; Didiza, A T; Dikgacwi, M M; Direko, I W; Dithebe, S L; Dlali, D M; Dodovu, T S; du Toit, D C ; Fihla, N B; Frolick, C T; Fubbs , J L; Gabela, L S; Gaum, A H; Gcwabaza, N E ; George, M E; Gerber, P A; Gillwald, C E ; Godi, N T; Gogotya, N J; Gololo, C L; Gomomo, P J; Goniwe, M T; Greyling, C H F; Gumede, D M; Gxowa, N B; Hajaig, F; Hanekom, D A; Hangana, N E; Hendricks, L B; Hendrickse, P A C; Hogan, B A; Holomisa, S P; Huang, S; Jacobus, L ; Jeffery, J H; Johnson, C B; Johnson, M; Jordan, Z P; Kasienyane, O R; Kasrils, R; Kati, Z J; Kekana, C D; Khoarai, L P; Kholwane, S E; Khumalo, K K; Khumalo, K M; Khumalo, M S; Khunou, N P; Komphela, B M; Koornhof, G W; Kota, Z A; Kotwal, Z; Landers, L T; Lekgetho, G; Lekgoro, M K; Lekgoro, M M S; Likotsi, M T; Lishivha, T E; Louw, J T; Louw, S K; Lucas, E J; Ludwabe, C I; Luthuli, A N; Mabandla, B S; Mabe, L L; Mabena, D C; Mabuyakhulu, D V; Madella, A F; Madlala- Routledge, N C; Maduma , L D; Madumise, M M; Magau, K R; Magubane, N E ; Magwanishe, G B; Mahlangu-Nkabinde, G L; Mahlawe, N M; Mahote, S; Maine, M S; Maja, S J; Makasi, X C; Makgate, M W; Malahlela, M J; Maloney, L; Maloyi, P D N; Maluleka, H P; Maluleke, D K; Manana, M N S; Manuel, T A; Mapisa-Nqakula, N N; Mars, I; Martins, B A D; Maserumule, F T; Mashangoane, P R; Mashigo, R J; Mashile, B L; Masutha, T M; Mathebe, P M; Mathibela, N F; Matlala, M H; Matsemela, M L; Matsomela, M J J ; Maunye, M M; Mayatula, S M; Mbombo, N D; Mentor, M P; Meruti, M V; Mgabadeli, H C; Mkhize, Z S; Mkongi, B M; Mlangeni, A; Mngomezulu, G P; Mnguni, B A; Mnyandu, B J; Moatshe, M S; Modisenyane, L J; Mofokeng, T R; Mogale, O M; Mogase, I D; Mohamed, I J; Mohlaloga, M R; Mokoena, A D; Mokoto, N R; Molefe, C T; Moleketi, P J; Moloto, K A; Monareng, O E; Montsitsi, S D; Moonsamy, K; Morutoa, M R; Morwamoche, K W; Mosala, B G; Moss, M I; Motubatse-Hounkpatin, S D; Mpahlwa, M B; Mshudulu, S A; Mthembu, B; Mthethwa, E N; Mtshali, E; Mufamadi, F S; Mzondeki, M J G; Ndlovu, V B; Ndou, R S; Ndzanga, R A; Nel, A C; Nene, N M; Newhoudt-Druchen, W S; Ngaleka, E; Ngcengwane, N D; Ngcobo, B T; Ngcobo, E N N; Ngculu, L V J; Ngele, N J; Ngwenya, M L; Ngwenya, W; Njikelana, S J ; Njobe, M A A; Nkem- Abonta, E; Nkuna, C; Nogumla, R Z; Nonkonyana, M; Nqakula, C; Ntombela, S H; Ntuli, B M; Ntuli, M M; Ntuli, R S; Ntuli, S B; Nwamitwa-Shilubana, T L P; Nxumalo, M D; Nxumalo, S N ; Nzimande, L P M; Oliphant, G G; Pahad, A G H; Pandor, G N M; Phadagi, M G; Phala, M J; Phungula, J P; Pieterse, R D; Rabinowitz, R; Radebe, B A; Radebe, J T; Rajbally, S ; Ramakaba- Lesiea, M M; Ramgobin, M; Ramodibe, D M; Ramotsamai, C P M; Ramphele, T D H; Rasmeni, S M; Rwexana, S P; Saloojee, E; Scheemann, G D; Schippers, J; Schoeman, E A; Seaton, S A; Sefularo, M; Sekgobela, P S; September , C C; Shabangu, S; Sibande, M P; Sibanyoni, J B; Siboza, S ; Sibuyana, M W; Sigcau, S N; Sikakane, M R; Skhosana, W M; Skosana, M B; Smith, P F; Smith , V G; Solomon, G; Sonjica, B P; Sonto, M R; Sosibo, J E; Thomson, B; Tinto, B; Tobias, T V; Tolo, L J; Tsenoli, S L; Tshivhase, T J; Tshwete, P; Turok, B; Vadi, I; Van der Heever, R P Z; Van der Merwe, J H; Van der Merwe, S C; Van Schalkwyk, M C J; Van Wyk, A; Vezi, T E; Vundisa, S S; Wang, Y; Xolo, E T; Yengeni, L E; Zita, L; Zulu, B Z ; Zulu, N E.
NOES - 48: Bici, J; Blanché, J P I; Camerer, S M; Cupido, H B ; Davidson, I O; Ditshetelo, P H K; Doman, W P; Dreyer, A M; Dudley, C; Ellis, M J; Farrow, S B; Gibson, D H M; Greyling, L W; Jankielsohn, L; Joubert, L K; Kalyan, S V; Kohler-Barnard, D; Lee, T D; Lowe, C M; Madikiza, G T; Masango, S J; Mfundisi, IS; Minnie, K J; Morgan , G R; Morkel, C M; Nel, A H; Ngema, M V; Opperman, S E; Pule, B E; Rabie, P J; Schmidt, H C; Selfe, J; Semple, J A; Sigcau , Sylvia N; Simmons, S; Smuts, M; Steyn, A C; Swart, M; Swart, P S; Swart, S N; Swathe, M M; Trent, E W; Van der Walt, D; Van Dyk, S M; Waters, M; Weber, H; Woods, G G; Zille, H.
ABSTAIN - 1: Nefolovhodwe, P J.
Motion agreed to.
Report accordingly adopted.
MEDIUM-TERM BUDGET POLICY STATEMENT
(Debate)
Mr N M NENE: Chairperson and hon members, this Medium-Term Budget Policy Statement builds on the progress made in the realisation of the objectives of the 2004 statement, which focused on accelerated economic growth underpinned by bridging the divide between the first and the second economy.
Improved economic growth has been accompanied by a stable, moderate inflation and a slight deficit in the current account of the balance of payments, but offset by a healthy capital account surplus. Capital formation by both the public and private sector has also shown a remarkable growth with the prospect of even being boosted by some major construction projects that are currently taking place and industrial investment over the coming period.
Building a developmental state, as we all appreciate, is a huge task that does not come without its challenges. While the informal sector has seen some degree of growth as a result of some policies and programmes, unemployment continues to be a major challenge. In the latest government programme of action it is clear
The HOUSE CHAIRPERSON (Mr K O BAPELA): Hon members, the House decorum is affected by the level of noise. We can no longer hear the speaker. Could you please allow the speaker to proceed uninterrupted.
Mr N M NENE: Thank you, Chairperson. There is one member with a big voice on this side of the House. [Interjections.]
In the latest programme of action of the government it is clear that the matter of economic inclusion of the formal sector is taken very seriously.
The committee held public hearings on this statement with stakeholders who made varying comments on how they viewed it. Among the issues raised was the fact that even though education expenditure as a percentage of GDP in South Africa is higher than in many developing countries, this is not realising the desired outcomes. The committee is aware that there are medium to long-term strategies in place to address this problem. This is of critical importance because lack of appropriate skills is one of the constraints to sustainable economic growth.
Household consumption expenditure, as well as vigorous investment in private residential buildings have also been identified as the principal drivers of the current economic growth. Of notable significance was also the rise of 27,4% in car sales and 10,2% in cement sales.
While some economists tended to overstate the growing number of workers that are not economically active, the committee is of the view that the decline in the unemployment rate should be balanced with a full appreciation of the redistribution of income, which is at the heart of this accelerated shared growth initiative that is led by the Deputy President.
The ANC government has remained steadfastly committed to the objective of a better life for all and hence the consistency we see in the policies that are pursued, dating as far back as the founding of this movement. Sharing equally in the wealth of the country might have been a far-fetched dream in 1955, but what we see now is the progressive realisation thereof.
In order to support or augment this accelerated shared growth initiative, we see a modest expansion in revenue as a percentage of the GDP, approaching 26% as opposed to 25% in previous years. This is supported further by the continued performance of the South African Revenue Services, collecting well beyond projections. This over-collection has also resulted in the reduction of the budget deficit going forward.
None of the extra revenue collected in 2005-06 is being used to finance extra expenditure. The committee agrees with government on this aspect that if extra funds cannot be used effectively, then these should be used to reduce borrowing. This is consistent with the fiscal management principle that suggests that government should seek to reduce deficits during the upswing phase of the business cycle, so as to create space for borrowing when the cycle enters the downswing phase. We are also experiencing debt service costs falling as a percentage of GDP relative to the baseline projected in the budget for 2005-06.
One of the important features of the statement is that it outlines the projected growth in infrastructure spending which should be directed to labour intensive projects and support development of SMMEs and Broad-Based Black Economic Empowerment. In the quest for allocative efficiency, public- private partnerships are, in the view of the committee, encouraged.
Social security funds also have some surpluses, with government savings also expected to be positive by the end of the MTEF period. This simply means one thing – that there is more money to spend on poverty alleviation and creating sustainable livelihoods. This statement also outlines a significant reduction in public enterprises’ borrowing requirements, which are indicative of these enterprises either being able to finance their projects or delaying them.
A number of taxation changes are also effected in this current year, as will be dealt with when this House deals with the Revenue Laws Amendment Bills later today. I wish to take this opportunity to commend the South African Revenue Service on the launch of its general avoidance discussion document in Cape Town on 3 November this year. This was a historic event indeed and the committee looks forward to hearing public comments on this initiative.
As the Minister of Finance always says, this statement gives Parliament and the public at large an opportunity to engage with the outer years of the Medium-Term Expenditure Framework and to raise issues for discussion while government departments consolidate their spending plans that will be submitted before this House as strategic plans and estimates of national expenditure that will be tabled early next year.
The committee notes the phasing-out of the Regional Services Council levies and trusts that the matter will be dealt with in a manner that does not undermine accountability and provide municipalities with a stable source of income that is supportive of local economic development.
The other chapters of this statement are going to be dealt with by the Joint Budget Committee members whom I share a history with and I wish them well in their deliberations. The Portfolio Committee on Finance is satisfied with matters of its competence and the certainty brought about by this tradition of multiyear budgeting. We support the Medium-Term Budget Policy Statement, 2005. Thank you. [Applause.]
Mr I O DAVIDSON: Thank you, Mr Chairman. The need to accelerate economic growth to create jobs and reduce poverty is the single greatest imperative facing South Africa.
The need is not just growth but, indeed, growth which will create jobs. The policy statement confirms that there has been growth in the formal sector, but also reveals a rapid increase in the number of workers that are not economically active. It also reveals that the absolute number of people without work in the age group 15 to 65 years continues to increase more rapidly than the economy is able to create jobs.
The HSRC report indicates that in order for government to meet its target of halving unemployment by 2014, the private sector alone needs to generate 500 000 jobs a year, which can only be done if the average growth rate of 6% is achieved on a sustainable basis for the next 10 years. GDP growth in 2005 was 4,4% and according to the report in front of us, it is expected to slow to 4,2% this year and remain within the 4% range for the balance of the period under review. This is well below, I must tell you, other emerging markets and indeed the rest of Africa.
The key, therefore, in judging the policy statement is how it helps in achieving that 6% growth. While the Deputy President’s initiative will provide the details, the template is clear from this policy statement. Instead of stimulating the supply side, government seems to have reverted to the mainstream economic thought of three decades ago when the dominant philosophy of Keynes prevailed, which emphasised government spending as the best tool for growth. However, there are a couple of major problems.
Firstly, capacity constraints continue to impact negatively on the budgeted figures. Current estimates suggest that 60% of government programmes are delivered at local government level and it is here where the largest capacity constraints exist. Further evidence of this is the R2 billion which was underspent in the municipal infrastructure grant.
Secondly, and related to the above, is the whole question of the skills crisis. Economist Iraj Abedian estimates vacancies in terms of skilled jobs to be in the region of 500 000. This cuts to the core of government’s problem. Even if funds for investment in the public sector are available, the skilled people to build and work the enterprises are not.
It is for this reason that a proper analysis of the policy statement reveals that government has opted to utilise the R30 billion revenue overrun this year, not to drastically increase capital expenditure, but rather to reduce the deficit even further. Likewise, a significant portion of the anticipated extra revenue generated in the following two years will also be used to keep the budget deficit well below the international norm of 3%.
In it’s report the Finance Committee notes the fact that growth in expenditure could well have been far stronger had government had the capacity to manage the extra spending. So here is the problem: Increased revenue flows, a strategy which says increase government infrastructural spending to fuel growth, but an inability to spend because of lack of a capacity and skills. So what do we do? Decrease the deficit. Hardly an expansionary fiscal policy; hardly a recipe to ignite growth.
In any event, as economist Noelani Conradie observed, higher state infrastructure spending - even with strong consumption demand, which we are experiencing – cannot achieve 6% sustainable growth. Growth will slow unless it is led by increased private sector fixed investment and a powering-up of the production side of the economy, and it is here where we believe government missed a golden opportunity to utilise the overruns to incentivise the private sector to be part of it’s strategy for growth.
Although economic growth is multidimensional, private sector investment remains the crucial factor in employment creation and growth. Yet where are the incentives in this policy statement? Fixed investment needs to reach 25% of GDP for growth to lift off. Yet, despite new commitments from government, the ratio still languishes at around 16%. We need to address the lower levels of domestic savings in our country. We need to address the extremely low levels of foreign direct investment other than portfolio investments.
The relative cost of doing business has to be a major factor in the decision-making process of whether to invest, and in this respect the level of taxation is an important component. There are other factors, yes, no less than two were mentioned by the Governor of the Reserve Bank when he named the whole question of foreign exchange controls and the nature and implementation of our labour laws.
As highlighted by Merrill Lynch, South African tax rates are high by emerging market standards and very high when you add in the secondary tax on companies. In a globalised world where international capital is highly mobile we have to be more than competitive as an investment destination. This does not mean, Minister Manuel, a race to the bottom, but a race to make us more competitive.
Government policy to date has been to keep the tax burden as a percentage of GDP below the 25% mark, yet this policy statement sees the total tax burden rise to 26% and stay there during the course of this policy statement. The level of our budget deficit is more than acceptable by international standards. Instead of using revenue overruns to reduce it further, government policy should have been more expansionary in its stance, and used it to incentivise the supply side by way of corporate tax.
We called for government to commit itself to multiyear tax reductions to bring the corporate tax rate closer to 25%. This, we believe, would have sent a very powerful signal and fuelled the private sector as far as growth was concerned. The Minister believed, however, that this would encourage companies to arbitrage their income across years to take advantage of future lower tax rates. I don’t accept this argument.
Firstly, companies are arbitraging this in any event. Secondly, we have a highly efficient tax collection agency. Thirdly, rather let them arbitrage in the short term and invest than have them seek investments in other markets with low tax regimes.
We accept there is no silver bullet to investment growth and the creation of jobs. Yes, infrastructural spending is important. Without it the private sector cannot operate at optimum levels. It is not an either-or situation. But the policy statement could have been genuinely stimulatory by incentivising the private sector by way of tax cuts to make it part of government’s growth strategy. Thank you.
Mr T E VEZI: Thank you, Deputy Chair. In 1999 – 2000, 22,2% of government expenditure was directed at interest payments. This has since fallen to 12,5%. This means there is more money available. The stronger than expected revenue growth is supported by robust economic growth.
Spending more evenly distributes. Where previously the bulk of government spending was directed at a small portion of South Africa’s population, it is now more evenly distributed. South Africa does not have a lack of cash. It has a lack of ability to spend.
We will not have the ability to spend the cash and create jobs, unless we solve the skills mismatch problem. The IFP believes that immigrant skills are only a short-term intervention. The long-term solution is further education and skills training.
The IFP is, therefore, very concerned to note business headlines in the Sunday Tribune, which read as follows: “Corruption mars training”. I quote:
Business has a list of 32 employers and skills training providers, who are suspected of having submitted suspicious or inflated invoices to learnerships or skills programmes, involving about 4000 trainees, the invoices total more than R182 million.
One of the experts in our committee stated that it takes about six months to fill a vacancy in the public service. We, in the committee, of course, were not in a position to refute that allegation. The IFP supports the statement, but the question of skills training has to be revisited. I thank you.
Mr S L DITHEBE: Thank you, Chair. The Joint Budget Committee listened to presentations by various departments, economists, non-profit and research organisations, two days after the tabling of the MTBPS by the Minister of Finance. This process alone ran for four working days.
I am mentioning this background because, more often than not, some within our society take the very functioning of this democracy for granted. Shouldn’t we therefore pause, marvel at and hail a democratic system that functions so well that it allows as much voice of countervailing power as is possible, to influence the public policy process? Indeed, I think we should do so.
Several participants during the hearings made very interesting and incisive interventions, which might not be implemented in the medium term, but are examined in detail as we scrutinise every bit of the government’s programme of action and the accelerated and shared growth initiative.
However, we must be mindful of the budget as an exercise of difficult trade- offs. It is very critical, though, that whatever the trade-offs or reviews of future budgets, government, Parliament, business, labour and civil society should all set their eyes firmly on ensuring a widespread improvement of the human condition, through a self-sustaining and shared growth.
Whatever the merits or demerits of different methods of measuring poverty and inequality, we must, at the end of the day, be able to say that we have succeeded in facilitating public participation and involvement in these hearings, and that we have acted boldly to scrutinise and oversee the executive, with a view to allowing every sphere of government to contribute to the 6% growth rate.
This, however, does not suggest that only the public sector can achieve this goal. The private sector too has a role to play. This means, among other things, that while tax avoidance may not be illegal, as opposed to tax evasion, business must think of the benefits of a growing fiscus, and how further government spending can benefit both households and firms, and thus help grow the economy.
My contribution in this debate would be incomplete if I did not comment on the propensity of some national and provincial departments to underspend. It does not require the wisdom of the oracle of Delphi to know that if departments do not spend, that tends to violate the ethos of Batho Pele, as well as setting in motion the whole train of unintended consequences.
I am saying this, cognisant of the latitude given to departments in terms of section 30(2) of the Public Finance Management Act. It is important to mention upfront that we are not necessarily suggesting that if, for example, R1 million of a R20,2 billion budget is not spent, then that is an inherently bad situation. These matters will depend on the nature and mandate of every department.
We must, therefore, remain vigilant against a narrow techno-fiscal approach that may encourage fiscal dumping in an effort to avoid being seen to have not spent money. Let me nonetheless give credit where it is due. It must go to those departments that are prudent in their expenditure, and spend their allocated funds.
Returning to the foreword of the MTBPS, we must not lose sight of the objective of modernising the economy, improving its competitiveness, while broadening participation and enhancing social inclusion. Based on this commitment, the benefits of the MTBPS will take root in national departments, provinces and local government, and other sectors of the economy, but they will be felt long after it has passed.
We must ponder a future without social exclusion and yawning poverty gaps. A society whose economy is built daily while it does not fail to meet the basic needs of the population, and ensures human resource development, strengthens its democratic institutions and the culture of human rights, and builds the nation itself. These events are already in time’s womb. We alone will determine what to make of the future. Accordingly, Parliament is requested to give serious consideration to the recommendations of the Joint Budget Committee. Allow me to cite a few of these.
The committee, it says, should carry out oversight visits to developmental nodes in particular. Parliament should play a central role in ensuring that departments complement, rather than compete with each other, in terms of their mandates in different clusters. Parliament should ensure that the MTBPS process facilitates institutional capacity, the human resource base as well as employment creation in order to narrow the gap between the underdeveloped, marginalised and unskilled section of the population on the one hand, and the advanced, global and skilled section of the population on the other, commonly known as the first and second economy.
But, perhaps, before I take my seat, let me deal with a few issues. It has been suggested from this podium that government is not intent on increasing the budget deficit, because it hides its ability and capacity to spend funds where they exist.
I think it must be remembered by members of this House, that not so long ago in the 1990s, the economy of this country was in the gutter. It took courage and ability on the part of this people’s democratic government to extricate it from that gutter. Through fiscal discipline we are where we are today, and more fiscal space enables us to spend on the basic needs of the people, and help in growing the economy. I thank you.
Mr A HARDING: Chairperson, the ID agrees that the MTBPS, in tandem with government’s initiatives, should accelerate and share economic growth for the benefit of all South Africans. We do have, however, one major but overarching concern, which could be explained by way of a very simple circular and paradoxical predicament.
The budgets allocated to various government departments are often underspent, which has a negative effect on service delivery. This problem is paradoxical in the sense that government keeps on overestimating the budget deficit. This results in budget allocations that are not expansionary enough for national departments to ultimately improve service delivery.
This paradox presents a problem that this government needs to tackle speedily and effectively if it wants to bridge the divides that exist in the current South African society. Thank you, Chairperson.
Mr S N SWART: Chairperson, we are most certainly hitting the sweet spot in the economy, and for this we need to be thankful. Will someone please say amen to that? The SA Revenue Service is to be commended for collecting R21 billion more than last year’s projected target.
The ACDP regrets, however, that corporate tax rates will, in all likelihood, not be decreased, notwithstanding the finance committee’s support of a rate cut. We trust, however, that personal tax relief will result not only in additional spending, but in a higher level of domestic saving. Certain other weaknesses do also exist.
The current boom is driven by strong consumer-led spending. Manufacturing and export-led growth are lagging behind. We are also disappointed that capital formation only reached 17% of GDP for the second quarter of 2005.
Economists accept that public and fixed investment need to reach 25% of GDP for accelerated economic growth to achieve the projected 6% growth target.
Whilst there’s a huge demand for social security, government needs to shift from welfare towards development in order to address poverty and unemployment in the long term.
The challenges undoubtedly remain, not in finding the funds, but in finding the engineers, project managers and technicians for the large infrastructure projects. State capacity is undoubtedly the single most important factor constraining growth.
The ACDP shares the views of an economist from Merrill Lynch who stated that it was time for a combination of infrastructure, social spending and lower tax rates. These would lower the costs of doing business and promote job creation. A catch net would still be needed, so social spending was necessary, but job creation was more important in the long run.
At the end of the day we will be judged as to what degree the economic boom translates into more jobs to address the poverty being experienced in our country – this is the ultimate challenge.
The ACDP supports the Medium-Term Budget Policy Statement. I thank you.
Mr B E PULE: Chairperson, the UCDP is appreciative of the 2005 Medium-Term Budget Policy Statement that is calculated to address the goals of South Africa’s growth strategy, which strategy aims to modernise the economy and improve its competitiveness while broadening participation and enhancing social inclusion.
However, it is imperative that the UCDP makes the House aware of the following challenges that merit serious attention. The current boom is driven by strong consumer-led domestic spending, that is, consumers borrow money to pay other loans, they skip payments on some accounts in order to pay others, and eventually they cannot pay their bills at the end of the month. Production and export-led growth is lacking.
It is therefore almost impractical to achieve a 6% sustainable growth on the strength of consumer-led spending, even if it is supplemented by higher state infrastructure spending, with all the challenges that go with spending on infrastructure.
This is also despite the fact that the Micro Finance Regulatory Council, in conjunction with the Department of Trade and Industry, is implementing a debt-relief programme to assist overindebted consumers.
The other disturbing factor is the silence of the Medium-Term Budget Policy Statement on how services of the HIV and Aids . . . [Time expired.]
Mr M T LIKOTSI: Chairperson, the PAC regards the Medium-Term Budget Policy Statement as a barometer to check if the national cake is being equitably shared and tailored to the needs of especially the country’s millions of poor.
The overall objective of the national Budget must produce results that meet the needs of society while making the best use of national resources the country is endowed with. We must prioritise the development of our country and its people. There must be total commitment to transform our economy in the shortest time possible.
As leaders and hon members we must display the political will to address, amongst other things, poverty, unemployment, affordable education - especially at tertiary level - poor health and the housing backlog.
The Medium-Term Budget Policy Statement should be used as a yardstick for best budgets to come in the near future. The PAC supports the statement.
Mr Y WANG: Chairperson, hon Minister, hon members, today I’m going to tell you why we need to strengthen the capacity of the Department of Trade and Industry, and why we should encourage export opportunities with a change of mindset and how else we can empower our people.
In the state of the nation address in February this year, the President identified the need to improve foreign capital flow. He also referred to special efforts to finalise sector development strategies and programmes, including especially business outsourcing and tourism, information and communications technology, agroprocessing, and community and social services.
In light of this directive, international trade plays a complex and important role. As international trade is an exchange of goods and services between countries, it is also the division and specialisation of participating countries and a refection of their dependency on one another. And with globalisation international trade now has even more influence over the domestic economy and the average individual.
The budget allocated for international trade and economic development under the Department of Trade and industry will play an important role in achieving the President’s directive, namely, attracting more foreign direct investments.
If you look at the complexity of international trade, trading is about seeking better deals and often, as a result, we get cheaper and better products. For exporting countries, the benefit is the huge external and international opportunities translated into local job creation. Most countries encourage their industries to focus on export markets, to create more jobs and gain foreign exchange, and sometimes incentives are given.
To give an example, South Africa’s population cannot be compared to that of China, India and Indonesia. The huge populations in those countries have created a huge domestic demand and expanded their market there. Although the domestic market is huge, China and India still support foreign factories for their operations and importing countries benefit in terms of cheaper and better products. But there are risks. The risk is the opposing opinion that says cheaper rates might often damage the relevant industry that is not competitive enough, but this can only probably be solved through better education of our legal force in the long run.
International trade cannot be discussed on its own as other factors also play an important role, especially the supporting infrastructure. Looking at communication, information is key, but is worthless if it’s not communicated and applied. We should not only empower our people financially, but we should also empower them with knowledge.
Why is this important? If we look at this – this is not a proudly South African thing, it’s a piece of knowledge in Physical Science that has benefited us all through communication. Similarly, international trade will provide us with the opportunity to enrich ourselves for the better and through all forms of communication benefit our people. This is why I would say international trade also includes an exchange of knowledge.
This year Sentech has been working hard to provide signal coverage for many communities. With allocated budgets, we encourage them to do more for our people and also with the liberalisation of the markets, we would also see the cost of communication going down. This would not only relieve the cost of communication for our people working far from home, but also reduce the cost for business transactions locally and internationally and potentially also be a stimulus for growth.
Now, if you look at our transport sector, enabling a smooth public transportation network is of vital importance. Not only will the infrastructure benefit international trade indirectly through logistics, but it will also impact immensely on local business activities.
We thus welcome the increase in the budget for our national roads and additional funding for strategic road infrastructure at the border post to support the efficiency of SADC regional road networks. This will support the Minister’s policy focal point as outlined in the MTBPS, which is building regional and international partnerships for growth and development.
That leads us to the effort on regional economic co-operation. If we look at the short-term and long-term MTBPS, in the short term we should integrate our neighbouring countries in SADC and in the medium term we should be taken as a gateway to Africa, a financial centre and transportation hub of Africa that integrates the African continent, and in the long term we can then go to the East and connect to other countries.
Starting again with China as a new superpower -. China has already identified South Africa as a gateway to Africa and they are really keen to launch any trade negotiations, and specifically future trade agreements amongst other countries. So we look forward for mutually benefits for trade agreements with other countries in the near future.
In conclusion, I just want to summarise again and point out that there is a need to strengthen the capacity of our enduring industry, and due to limited local markets we should encourage more export opportunities which are intended to generate more revenue to build our country further. This requires a change of mindset, knowing what the risks are, managing the risks and exploring other possibilities. And we should see China as a land of opportunities, and not as a threat.
Finally, none of this is possible without empowering our people with relevant information and knowledge. And that is exactly why we support the MTBPS. Thank you, Chairperson. [Applause.]
Mr R B BHOOLA: Chairperson, the Minority Front welcomes the allocations in the MTEF. The adjustments clearly show government determination to improve living conditions, the standard of living, and developing South Africa into a powerhouse that will uplift our country in a global market and retard poverty in the long run.
The MF supports the strategies to encourage industrial development through investment in major infrastructure projects in the energy, transport, water and communications sectors. We support the allocations made to national and provincial government but would have liked a bigger allocation than 2,5% to local government. We applaud the greatly increased allocation to social services and call for the efficient utilisation of funds to improve the living conditions of our people and clamp down heavily on poverty.
With crime being such a serious problem in South Africa, the MF is glad of the 12,2% increase to Justice, Police and Prisons. Thus, the economic services of water, agriculture, forestry and fishing appear to be adequately allocated and the transport and communication sectors appear to have sufficient allocations.
We do appreciate the boost to municipalities that will enable free basic services to poor households. The increase in social security grants is appreciated, and we hope that our pensioners will this year receive a more liveable allocation.
We would, however, like to express concern about why there is a slower rate of increase over the next three years to health and welfare. [Interjections.] The Minority Front supports the Medium-Term Budget Policy Statement. [Time expired.]
Mr P J NEFOLOVHODWE: Deputy Chairperson, this year’s Medium-Term Budget Policy Statement points in the direction of providing more resources to programmes that are intended to improve the lives of the poor.
To this end, Azapo believes that the Treasury has discharged its responsibility by making sure that every year the Budget is tilted towards the plight of the marginalised. Having done this, it is now the responsibility of those in charge of delivery to use the resources for the intended purposes.
We all know now that this eludes some of the municipalities. The Medium- Term Budget Policy Statement comes in an environment where interest rates and inflation levels are not very high. The worrying factor though is that all these favourable factors reside primarily within the first economy. The projected economic growth is also related to the first economy.
Azapo has learned over the past years that growth in the first economy has meant very little benefit to the second economy. To Azapo, the second economy must also grow for the poor to benefit, for it is in the second economy where the poor reside. This is indeed a challenge for the government.
Azapo supports the Bill. [Applause.]
The HOUSE CHAIRPERSON(Mr K O BAPELA): Order! We will now interrupt the debate as agreed by the Programming Committee. Proceedings will now be suspended for a supper break. Supper will be provided to members at no cost in the restaurant on the second floor of the New Wing Building and in the area outside the E249 committee room.
Proceedings will resume in 30 minutes. The bells will be rung for the resumption of the proceedings. Proceedings are now suspended. I thank you.
Debate interrupted.
Business suspended at 18:35 and resumed 19:10.
MEDIUM-TERM BUDGET POLICY STATEMENT
(Resumption of debate.)
Ms B N DAMBUZA: Chairperson, hon members, distinguished guests, my humble greetings.
Sihlalo, amaqobo namaqobokazana sele eyihlahlile indlela, okwam nje kukuba ndingene emxholweni. Okokuqala okubalulekileyo endiza kuthetha ngako luphuhliso lwemimandla yasemaphandleni, uhlaziyo lwemimandla yasezidolophini kwakunye neenkonzo zoluntu. (Translation of Xhosa paragraph follows.)
[Chairperson, young men and women have paved the way for me. My task is to get to the point. Firstly, I am going to talk about rural development, urban renewal and service delivery.]
The main or key initiative is the provision of an infrastructure investment that is labour-intensive through the Expanded Public Works Programme, social and economic development infrastructure, institutional capacity- building and provision of technical support.
It is important to highlight that the ANC-led government remains committed to building a caring and people-centred society, particularly for those who had been previously disadvantaged. Through interaction with various departments in the past weeks, the ANC is fully convinced that the current MTBPS is an attempt to achieve government priorities, which is a developmental goal.
The Department of Provincial and Local Government presented their key principles, which are to fight poverty and underdevelopment and build economic growth in our communities through integrated sustainable rural development and urban renewal to accelerate the eradication of backlogs, for instance, with regard to water, roads, sanitation and electricity and, also, to promote an increase of employment through the Expanded Public Work Programmes and the provision of free basic services to those who are in need. In addition, they are mainstreaming programmes of Project Consolidate in nodal areas and, funding to implement financial management reforms. The systems are in place to measure the success or the extent of Project Consolidate.
The Department of Housing presented a new comprehensive strategy for improved housing delivery to achieve integrated housing and sustainable human settlement and also quality housing with social and economic amenities. The policy seeks to address housing backlogs, alleviate poverty, upgrade informal settlements and create jobs.
It also looks at ensuring property ownership and provision of rental housing to the poor, and will address spatial patterns, and will also encourage private sector participation, for instance, in housing loans. Then, the land released for housing and accreditation of the municipalities will also build capacity of the municipalities. For instance, the municipalities will have a fully-fledged department, and then the monitoring mechanisms are also in place for this department.
Regarding the Department of Education, the MTBPS is in line with the national baseline and with the provincial equitable share. Their focus is on early childhood development; recapitalisation of further education and training colleges; modernisation of equipment and facilities; the school nutrition programme; and school-based life skills education from Grades 1 to 9. It aims at improving the remuneration package for educators as part of their ``attract and retain’’ strategy.
The core services for the Department of Home Affairs are civic and immigration activities. They are looking at importing the scarce skills, for instance engineering, to drive economic growth. We are talking about it being at 6%. And then, there is staff recruitment and the provision of smart cards by September 2006. This department works with other departments to provide social services.
The Department of Health’s programmes are as follows: they are going to upgrade and revitalise hospitals; focus on medical equipment provision and information systems; and consolidate of primary health services. The department’s strategy is to expand the middle level workers pool, for instance, to increase the number of pharmacists, medical assistants and medical aid for nursing work.
The department also aims at reviewing structures of training as a retention strategy for nurses. The malaria reduction programme and the antiretroviral roll-out are on track, and 56 sites have been established.
About the brain drain, this is a policy matter and it is under consideration to address the nurses’ concerns. The other strategy is to review the salary packages for health workers.
Regarding Social Development, their key role is to promote opportunities for marginalised communities in economic activity, to improve the quality of life of the poor and vulnerable groups in society.
Their programme incorporates the Child Support Grant for children up to the age of 14. Social Assistance Administration Grants include the appointment of social workers and an increased package system. The Food Emergency Relief Grant includes the provision of appropriate social welfare services and the distribution of mobile units. They also address staff recruitment to address delays in processing applications.
The Department of Water Affairs and Forestry’s business is to address social, economic and environmental challenges as well as managing the economic assets of water resources and forestry. Their programmes include water resource management, water services and forestry. This requires ongoing rehabilitation and maintenance of dams. The bulk of funding will go towards the investment and water resources infrastructure and will strengthen regulatory functions.
Mandiyibeke icace gca, Sihlalo, into yokuba xa i-ANC ithetha ngezakhono ezinqabileyo ayiphazami, isemgceni. [Laphela ixesha.] [Kwaqhwatywa.] [Let me set the record straight, Chairperson, when the ANC speaks of scarcity of skills it is not making a mistake, it is on the right track. [Time expired.] [Applause.]]
Mr S SIMMONS: Chairperson, it would be a brave soul indeed and, one has to admit, a somewhat naïve one who would argue against the notion that wealth creation in the business sector benefits all. And so it must have been pleasant in the extreme for the hon Minister to announce an additional tax income of R30 billion, albeit it courtesy of the Receiver’s miscalculations.
We are all agreed on what is needed to ensure that this economy reaches its long-term growth potential. But is there enough courage to take the requisite steps when such measures clash with political agendas? There can be little doubt as to the creativity and skills of our own homegrown businessmen, but idealistic legislation and over-regulation exact a price.
The UK, one of the world’s largest economies, is now reaping the benefits brought about by extremely competent SA businessmen active in that economy. Why are those individuals and their businesses not applying the skills in their own country where they are most needed? Certainly, it is not out of choice. Idealistic politicking and severely restrictive regulations leave them with none. Even homegrown corporations are eschewing JSE-listing for London due to, amongst others, considerations of foreign exchange controls.
It is time to remove these hurdles and allow skilled South Africans to do what they do best in their own country and reward them for their efforts. Then we can all share in the resultant benefits. A highly developed sense of social responsibility already abounds among South African business leaders both here and abroad. It is essential that this is allowed to manifest itself in the broader society.
The UDP of South Africa supports the Medium-Term Budget Policy Statement. [Time expired.]
Mrs L S CHIKUNGA: Madam Chairperson, hon members, comrades and friends, as we build a peaceful and stable society, we continue to be informed by the Freedom Charter which provides, among other things, that there shall be peace and friendship. We believe that in conditions of peace and stability, democracy grows to maturity.
We have to move forward with a common understanding that peace and stability are prerequisites for a successful transformation of the country. Because instability in any country of the world results from social, economic and political conditions, promoting peace and stability in our country requires us to adopt an approach which aims to effectively respond to the socioeconomic needs of our people, which response would be inadequate and incomplete if it fails to include funding of justice and protection services’ initiatives and programmes.
This paradigm was introduced in our society by the democratic movement and the ANC government. Responding to the economic needs of our people is a paradigm which should guide us as and when we debate efforts of implementing justice and protection programmes.
We must welcome and support all the progressive aspects of adjustments which have been effected in the Budget for the departments in the Justice and Protection Services cluster. We welcome additional funding which will improve courts, policing, defence equipment and access to justice services, which ought to transform the judiciary.
We are fully aware that some of the problems faced by some departments in the Justice and Protection Services cluster will not be solved overnight, such as overcrowding in prisons. We believe that budget adjustments in respect of Correctional Services would seek to respond to the overcrowding challenges and other priority challenges within the current budget cycle. However, let me emphasise that addressing overcrowding goes beyond merely reducing the number of inmates. We must be mindful of the fact that lasting solutions reside in the correction of behaviour.
For this reason we must begin to redirect more resources to the initiatives and efforts which seek to correct unacceptable behaviour. As criminal activities continue to undermine our constitutional democracy, we need to prioritise criminal justice system initiatives and efforts which aim to intensify campaigns at all levels to reduce crime, especially the proliferation of illegal weapons and drugs, corruption and fraudulent activities, and the abuse of women, children and the elderly.
Hence priority is given to the capacitating and strengthening of the investigating and prosecuting authorities, as well as consolidating and strengthening our victim empowerment system. Coupled with this, the cluster should ensure that there are adequate resources which enable it to expeditiously implement the service charter for victims of crime.
It is our firm belief that South Africa would not be able to achieve internal peace and stability in conditions of regional and continental instability. This is precisely why the Freedom Charter requires our country to strive to maintain world peace. Hence we continue to support the deployment of adequate resources in our peacekeeping efforts, which efforts seek to stabilise our continent and the world.
As Parliament we have to fulfil a continuous and effective oversight function over the Budget through monthly and quarterly reports by different departments, which portfolio committees have to ensure that they receive. Parliament should further explore ways to influence co-operation and complementarity rather than competition between departments, particularly in respect of co-ordination of planning between departments in the same cluster.
Our criminal justice system continues to achieve successes in stabilising the levels of crime with decreases reported in respect of certain priority crimes. By increasing the number of police, prosecutors and correctional officials, and implementing an information system, government aims to reduce the level of crime each year.
Together as government in partnership with agencies and communities, we’ll bring peace, stability and friendship. Seeing that I still have a few minutes left, I feel that maybe I should respond to some of the things that were said from this podium.
Yebo, mhlonishwa u-Davidson, ikhona inkinga yokushoda kwabantu abanamakhono emisebenzi. Kodwa-ke kuhle ukuthi ngelinye ilanga uthole ithuba uke uma lapha esidlangalaleni utshele abantu baseNingizimu Afrika ukuthi i-DA yona yasifaka kangakanani isandla ekutheni kube nokushoda okungaka kwabantu abanamakhono emisebenzi eNingizimu Afrika. (Translation of Zulu paragraph follows.)
[Indeed hon Davidson, there is a shortage of skilled people in the workforce, but I think it would be a good thing if you stood here at the podium and told the whole of South Africa what the DA’s role was with regard to the skills shortage in the South African labour market.]
It is unfortunate when a person comes here . . .
. . . akhulume ngokushoda kwabantu abanamakhono emisebenzi kube sengathi yinto eqhamuka namuhla futhi yenziwe yilo hulumeni okhona. [ . . . and talks about a skills shortage in the workforce as if it is something that came with this government.]
Indeed you contributed and you made us all choose . . .
. . . izinto ezithile ukuze singabe sisakwazi ukuthola ezinye izinto . . . [ . . . certain things so that we could not get other things . . . ]
. . . and that is why we have that one. Mr Davidson, again, it is very true that we need to accelerate growth but, indeed, you need also to accept the fact that economic growth in South Africa has been accelerated through this current government.
Kuhle ukukusho lokhu nokubonga umsebenzi owenziwe yilo hulumeni we-ANC. Futhi, kufanele senze amathuba emisebenzi nokuletha impilo engcono kubantu. Kodwa noma ungakusho izikhathi eziyi-120 kule sisidlangalala, ngazi kahle ukuthi abantu bayazi ukuthi uma ngingase ngikubuze ukuthi yini ubuphofu. Uzocabanga incwadi ethize oke wayifunda noma unjingalwazi othile oke wakuchazela yona. [Uhleko.] Ngiyabazi ubuphofu, angidingi incwadi . . . (Translation of Zulu paragraph follows.)
[It is good to say this and be grateful to the ANC government for the work they have done. And we must also create employment opportunities and bring a better life to people. Even if you say what you are saying 120 times in public, I know very well that people out there know that if I ask you what poverty is, you will only think about a certain book that you read or a certain professor who once explained to you what poverty is. [Laughter.] I know what it means to be poor. I don’t need a book . . . ]
. . . because I’ve seen it, I’ve smelt it, I’ve heard it, I’ve touched it and therefore I don’t need any book [Applause.] It is only the ANC that can talk about poverty and bringing a better life to the people of South Africa. That is why as you stand here, they will not hear you. Only the ANC can bring a better life for the people of South Africa. Thank you. [Applause.]
The MINISTER OF FINANCE: Thank you very much, Chairperson, and let me express my appreciation to all of the members who contributed to this very rich debate.
What we are dealing with is of course the Medium-Term Budget Policy Statement. It is that. It is a statement, a foretaste of what we will table in the detailed Budget in February next year. Clearly, it starts from a particular perspective, and what this document cannot do and what this debate cannot do is to resolve some of the fundamental ideological disagreements between parties in this House. They are ideological, call them by any other name, but they are ideological, and the differences are primarily about how you drive change and what is first.
There are those who would argue that all you need to do is leave money in the hands of the wealthy and all change will emanate from that. There are others who would argue that the state has a very specific role to play in respect of this.
The poster child for the former group is of course what happens in the United States of America. Now, since George W Bush became president a number of very important decisions have been taken, including the fact that tax rates should be dropped for wealthy individuals and for co-operations in the country.
The net effect of that is that the country is incapable of financing social services. More and more citizens of the USA cannot afford health care, and fewer and fewer people can retire with any sense of security regarding the future. [Interjections.] All of this was hidden and it took Katrina to make us realise the extent of poverty and inequality that has been masked by what we see in The Bold and the Beautiful, about life for poor African Americans, poor Hispanic people and poor white people in the United States. So we must make a choice about these things.
The other poster child has of course been Germany, and if you look at the fragmentation of taxes in Germany, where so many of the company taxes were devolved to local government- neither the federal government nor the Länder, but in fact local government- the huge fiscal crisis that has been building up is as a result of a tax policy that is manifested through a number of different governments over a fairly long period of time.
Let us look at the issue of tax rates that the hon Davidson holds up. [Interjections.] Let us look at corporate tax rates that the hon Davidson held up here this afternoon. Let me ask you what the tax rate is in India today, hon Davidson. It is 35,9%. Or you can look at China where it is 33%, or Brazil where it is 34%, or Egypt where it is 40%. And then you ask questions about the 29% corporate rate in South Africa, and I ask you what the source of your comparisons is.
You are not comparing like with like. What you should avoid doing, hon Davidson, is to take those who come before you with special pleadings on behalf of capital and convert them into oracles of permanent wisdom. Because, unfortunately, the many representatives of the banks who come before the committee as economists suddenly assume this life beyond the status that they are accustomed to, because they have spoken as economists. But these are just the views of economists, at the end of the day, and economists will always differ in respect of their views.
I am saying that the key issue - and what you must find in the policy document - here is the tilt to Batho Pele. Do we put the people first? And, if so, how do we set about doing that, because that for me is the key challenge. [Interjections.]
The hon Davidson also, in the way in which he structures his argument . . . [Interjections.] You see, now I want them to listen. The bloody problem is that they never listen! [Laughter.] [Interjections.]
I withdraw that.
The HOUSE CHAIRPERSON (Ms C-S BOTHA): Order, please members, order! [Interjections.]
The MINISTER OF FINANCE: You, Mister, what is your name? Shaik?
HON MEMBERS: Shah! [Interjections.]
The MINISTER OF FINANCE: Why don’t you shut up for a while? [Interjections.]
The HOUSE CHAIRPERSON (Ms C-S BOTHA): Order! Hon Minister, you will address the members through the Chair, please. [Interjections.]
THE MINISTER OF FINANCE: Let me deal with what the hon Davidson was saying. [Interjections.]
The HOUSE CHAIRPERSON (Ms C-S BOTHA): Order please, members! You must allow the member at the podium to speak.
The MINISTER OF FINANCE: Let me deal with what the hon Davidson was saying. You see, he set up a straw man in the context of the arguments of Keynes. Now, there is expansion, but this was a classical Keynesian expansionist budget. It is not and you should not, hon Davidson, look only at the size of the deficit. Look also at what is happening in respect of tax collections and there are a variety of ways of arriving at exactly the same objectives. We should not attach any glory to the size of the borrowing, but having set up a straw man, you then attack the straw man.
You see, if the only issue is the size of the tax rate, then it’s a race to the bottom, because if you look at the structure of our tax rate at 29% corporate tax and a secondary tax in companies, and evaluate the secondary tax in companies, it exists only as a tax on distributed income. It suggests that we should trap this money inside companies so that they invest. There are more than enough incentives for private capital to invest in this country. Do they do so in sufficient quantity? The answer has to be a resounding no.
So, you believe that if you cut the tax rate, suddenly they will invest. What gives you that impression? I’m saying you can only arrive at that impression because you’re a fundamentalist believer in the power of capital. The hon Swart is similar, and I should caution you, my brother, against Mammon. Beware the god of money. It doesn’t work! We have a responsibility as the state to deal with poverty and underdevelopment. [Interjections.]
The HOUSE CHAIRPERSON (Ms C-S Botha): Order, members, please, order! [Interjections.] Order! [Interjections.]
The MINISTER OF FINANCE: In respect of decisions already taken, we have taken the decision in this country, in respect of a wage subsidy, to support the employment of young South Africans. Are companies drawing on the wage subsidy to employ people? Notwithstanding the fact that we believe that the only thing we have to do is incentivise and business will take this up, are we seeing the wage subsidy being drawn upon? Of course we aren’t, because of the fact that there are a series of other issues, and part of the evaluation that we’re undertaking is what the binding constraints are. [Interjections.]
The binding constraints are not in the labour laws. If they were in the labour laws business would raise this in the investment climate facility study. If they were in the tax rates they would raise them in the investment climate facility study. What business is concerned about is the supply side of the labour market. It’s a fact that we have an education system steeped in apartheid that does not produce sufficient people with skills that allow them to be rapidly absorbed. [Interjections.]
That is the problem in South Africa: Last year we produced 5% of matriculants with mathematics at the higher grade. That is a binding constraint! If you want to fix it, don’t fix it in the labour laws, fix it in the education system. And when the relics of apartheid, the dinosaurs on my left, understand that, we will have a start in society. [Interjections.][Applause.]
The HOUSE CHAIRPERSON (Ms C-S Botha): Order, please! Order, members!
The MINISTER OF FINANCE: You see, the other issue in respect of what the hon Davidson said – and I checked this out with the committee, and it’s not in the report – namely that the absolute number of unemployed persons is increasing. If this is the case, then pages 23 and 24 of the MTBPS must be fundamentally wrong. There are issues . . .
Ms J A SEMPLE: How do you decide that?
The MINISTER OF FINANCE: The Labour Force Survey tells us this, and the Labour Force Survey and its methodology has been confirmed by the ILO just last week.
Mr I O DAVIDSON: Look at page 24 of your document!
The MINISTER OF FINANCE: Yes, I’m saying look at page 24, and then you need to understand the factor of sustainable livelihoods. It’s not about employment, it’s not about income on page 24. Do you want to see it? [Interjections.] You see, there were more than 500 000 jobs created last year. The figures speak for themselves, so even the numbers produced by Mike Schussler the other day come in way below what is actually happening in this economy, and the moment the DA understands that we are successful in the management of this economy they’ll lose their raison d’être and then they may as well go home. The sooner they do that the better for democracy. [Applause.]
Let’s come to what some other members were saying. Clearly, what we’ve constructed over a long period is additional fiscal space. We have more choice to be able to take the decisions. Thank you, hon Dithebe, for reminding us of that.
The hon Harding is not in the House now, but the paradox that he raises is quite an important one. It arises in a number of places. It arises because we’re more efficient at what we do and so the deficit declines, and we have to measure, in the way that I said earlier, the quality of the spending. It’s something that I ask Parliament to engage with on an ongoing basis. [Interjections.] You’re not on the radio, hon Kohler-Barnard!
Ms D KOHLER-BARNARD: That’s why I left! [Interjections.]
The MINISTER OF FINANCE: The quality of the radio service has increased and the average IQ of members of Parliament has decreased since the past election! [Interjections.]
The hon Harding’s paradox is an important one that we must be able to come back to. [Interjections.]
The HOUSE CHAIRPERSON (Ms C-S Botha): Order, hon members, order, please! [Interjections.] Minister, I am only calling the House to order, not you.
The MINISTER OF FINANCE: Thank you, Chairperson. [Interjections.]
The hon Wang’s points about infrastructure and the vision he sets out for South Africa and the world, similarly, is a very important issue.
The hon Nefolovhodwe raised an important issue, and one that I think we need to remind this House of. The question is: What happens when times are good? When times are good more and more South African families get themselves into debt. If we look at the increase in household indebtedness ahead of the interest rate hikes of 1997, you saw the increase from a low of 42% to a high of 62% in the ratio of household indebtedness to earnings, and when the interest rates increased many, many families found themselves on the wrong end of blacklisting, outside of their houses, without their cars, etc.
The Governor has made the appeal and I want to make that appeal as well. Times are good and it becomes necessary that we talk about the risks of interest rate changes now.
If you look at the situation in the United States at the moment, the commitment by the outgoing chairman of the Federal Reserve, Alan Greenspan, is that the rates will continue. The incoming chairman, Ben Bernanke, has indicated that that is a trend he will observe. Savings rates in the United States are negative. Too many families find themselves deeply in debt and too many families are going to end up on the wrong side of the interest rate curve.
It is very important that we make this point repeatedly in South Africa so that families could prevent the debt trap. We have now been in a very benign interest rate environment. We have been in a very benign inflationary environment as well, and people think that tomorrow does not count.
The world’s interest rates have shifted. We have seen that in the UK and we have seen it in Australia and New Zealand. It is likely that the European Central Bank will increase its rates in the same way as the United States has done. It is unlikely that we will remain behind the curve. It is very important that this is repeated as a very, very, very important lesson. Come December, people get bonuses; they think there is no tomorrow. It feels like there is a lot of money around and the illusion of wealth is probably going to be exceedingly costly in this environment.
In respect of the hon Simmons – is he still in the House? What we could never ask of him is to understand that what this document does is to give forecasts from the best possible information about the situation that will obtain at the end of the fiscal year, 31 March 2008. It is a long period. Clearly you will have a series of risks in those kinds of forecasts. We need to understand that.
I also want to just point out that, in our revenue estimation, there are a number of government departments involved. Stats SA do not do it alone – the National Treasury participates, so does Sars, together with some outside academics. It is the best shot that we have.
If you look at some of the unforeseen expenditure in this economy, and again try and understand it, the fact is that the decisions that we take sometimes don’t quite have the intended results. Amongst the decisions we announced earlier was that we would set a ceiling of R350 000 for car allowances. If somebody wants to buy a Maybach at R3,5 million, the only benefit they would be entitled to is R350 000. Notwithstanding that, if you look at the increases in car sales, coming in at 27,2% as reported in the Medium-Term Budget Policy Statement and you look at the high-end cars, people are not responding to that. People continue to buy expensive cars with debt as if there is no tomorrow. We are not seeing the changes.
Let me conclude by saying that these things don’t work through into our lives and decision-making. But part of the big challenge we have is to provide certainty so that people can understand that the decisions we take have a profound impact on their lives going forward. Thank you very much. [Applause.]
Debate concluded.
MEDIUM-TERM BUDGET POLICY STATEMENT (MTBPS) 2005
(Consideration of Report of Joint Budget Committee)
There was no debate.
THE CHIEF WHIP OF THE MAJORITY PARTY: Madam Chairperson, I move:
That the Report be adopted.
Motion agreed to.
Report accordingly adopted.
REVENUE LAWS AMENDMENT BILL
(First Reading debate)
Mr Y S BHAMJEE: Chairperson, hon members, my contribution to this debate begins by referring to inputs of experts and practitioners, whose primary task is to unpack the draft Revenue Laws Amendment Bill.
Business Unity South Africa’s workshop, representing a wide range of business interest groups, has acknowledged during the hearings that the draft amendments are technical in nature and reflect the complexity of the Income Tax Act. The Banking Association of South Africa expressed a similar view, namely that there is no doubt that taxation is an extremely complex subject, with substantial resources devoted to its collection and administration.
As the demands of the committee are increasing in dealing with technical Bills, it is imperative that Parliament should give serious consideration to securing dedicated in-house specialists on relevant fields in order for the committee to pursue its oversight role to yet higher levels to ensure a sound Act and to engage constructively in its deliberations on regulations.
The means for revenue collection are company tax, personal income tax and value-added tax. The mandate to raise these funds is derived from the Constitution and the appropriation of these funds is guided by the annual budget speech that outlines government policy and priority objectives. This requires the Revenue Laws Amendment Act of 2004 and relevant legislation to be amended annually. In practice, tax law and revenue collection are work in progress. They are guided by a series of Acts.
The aim of drafters and Sars is to address loopholes, secure in general the support of taxpayers, introduce best practices and conform to international norms and standards of economic globalisation. The draft Revenue Laws Amendment Bill is a single draft Bill when it is subjected to public hearings, but when it is officially tabled in Parliament, the Revenue Laws Amendment Bill is divided into two Bills, the Revenue Laws Amendment Bill and the Revenue Laws Second Amendment Bill.
The Revenue Laws Amendment Bill, tagged a section 77 Bill, is a money Bill. As such, it can only be deliberated on when it is a draft, as the Bill’s objective is to present a legislative framework for the 2005 Budget, to legalise its provisions by amending existing legislation and to regulate for the provisions thereof. To this effect, amendments and/or regulations to specific sections of a number of Acts are inserted, namely the Transfer Duty Act of 1949, the Estate Duty Act of 1955, the Income Tax Act of 1962, the Customs and Excise Act of 1964, the Stamp Duties Act of 1968, the Value- Added Tax Act of 1991, the Uncertificated Securities Tax Act of 1998, the Tax on Retirement Funds Act of 1996, the Road Accident Fund Act of 1996, the Revenue Laws Amendment Act of 2003, the Second Revenue Laws Amendment Act of 2004 and so on.
The Revenue Laws Second Amendment Bill, tagged a section 75 Bill, introduced amendments to the administrative provisions of most of the Acts just mentioned. It is blatantly obvious then, that the two Bills are broad- based. It is not an exact menu. It affects several specialist pieces of legislation. It would be an exercise in futility for the Portfolio Committee on Finance to propose such amendments in the absence of the very necessary specialised knowledge required to appreciate and monitor the impact of the proposed amendments.
In response to the portfolio committee’s query on where the Commissioner of Sars gets his mandate to waive, write off or compromise any amount of tax, duty, levy, charge or other amounts and on a need for tabling regulations, the following positive response has been inserted as part of clause 15 of the Revenue Laws Second Amendment Bill. In fact, paragraph 1.16 of the Bill’s memorandum offers a user-friendly explanation for its inclusion. It is cited in some detail as it may impact on the work of other committees that deal with public entities:
. . . section 76(1) of the Public Finance Management Act, and consequently the regulations issued thereunder are not applicable to Sars. The . . . section . . . states that National Treasury must make regulations or issue instructions applicable to departments, thus excluding Sars which is defined in the Public Finance Management Act as a “public entity”, listed in Schedule 3A of the PFMA.
It is proposed that enabling legislation be incorporated into the Income Tax Act to grant the Minister of Finance the power to prescribe by regulation the circumstances for waiver, write off or compromise of undisputed tax debts. A provision is also inserted to provide that the Minister must publish the draft regulations in the Gazette for public comment and that the regulations must be submitted to Parliament for parliamentary scrutiny at least 30 days before their promulgation.
Parliament must thus ensure that the tabling of regulations is referred to relevant committees timeously in order to satisfy the constitutional obligation of their oversight role. The finance committee must not be found wanting. This can only serve to improve the quality of legislation and advance the principle of good governance.
Regarding the issue of specialist researchers, it is conceded that it would be an expensive exercise to enlist this resource. But it is respectfully submitted that failure to do so would, in the long run, cost much more and compromise our primary parliamentary obligation of playing a meaningful and effective oversight role. The opportunity costs cannot be ignored.
This motivation in no way intends to undermine the role that the Treasury and Sars in particular have played in guiding the committee. In fact, their responses to our queries and suggestions have been highly professional and empowering. However, it may be argued that the committee, at one level, cannot claim that it was solely responsible for the amendments proposed.
Inputs from public hearings are largely left to the Treasury and Sars to respond to. The process lacks the robust debate necessary that would have ensued, had the committee had the resources of appropriate technical specialists, bearing in mind that a money Bill cannot be amended. If the status quo prevails, the objective of the committee may stand to be compromised. In some instances, crucial clauses may pass unnoticed. This empowerment is a challenge, not only for the finance committee to pursue but for all committees of this hon House.
Regarding the issue of land restitution, its delay has plagued progress. As a way forward, it is proposed that the so-called Land Bank valuation be replaced with a valuation applicable to all other property, namely the price that could be obtained between a willing buyer and a willing seller dealing at arm’s length in an open market must be reduced by 30%.
To address the need concerning the shortage of skills, in particular to attract foreign expatriates, it is proposed that, in keeping with international practice, taxation on a nonresident’s foreign income and capital gains, when physically present in the Republic, should be extended from three years to five years.
In general, the Bills address the following: tax treatment of medical schemes contributions, withholding tax on foreign entertainers and sportspersons, controlled foreign company rules, visiting skilled expatriates, changes to the tax treatment of public benefit organisations, the extension of urban development zones initiatives, changes to the collection of the road accident levy, a number of changes to the Value- Added Tax Act, income tax exemptions, government grants, individual home office grants, company car fringe benefits, travel expenses of family members to visit an employee working away from home, pension provisions for previous nonstatutory force members and so on. My comrade, the hon B A Mnguni, will unpack these issues in his input.
In our driven commitment to create a better life for all, in contemplating challenges of a dynamic economy on the one hand and increasing the revenue base on the other, we need to constantly strive for equitable nonpunitive revenue collection. The amendments proposed to the Acts, through the Bill, progress towards this objective.
In conclusion, for the benefit of the industrious member of Parliament who has the conviction to familiarise himself or herself with the memorandum explaining the amendments, the document is about 90 pages in length.
The ANC supports the Bill. I thank you. [Applause.]
Mr I O DAVIDSON: Madam Chairperson, before the Minister loses any more of his hair – he has not got much left! – I’d like to tell him that we’re supporting the Bill. [Laughter.] [Interjections.]
The Bill is an omnibus piece of legislation, which seeks to amend various pieces of tax legislation currently in force. The amendments put forward are results of the National Treasury and SA Revenue Service wishing to broaden the tax base, implementing suggestions made in the process of the budget review, closing tax loopholes in the current legislation and generally introducing incentives or allowances which public policy may dictate.
As pointed out by the previous speaker, it’s a large Bill of 92 pages, and I certainly don’t intend going through anywhere near the content of it, but I do want to single out a few things which were of interest from presentations to the committee. I thought the contribution at the public hearings of the Aids Law Project in respect of clauses dealing with medical contributions and expenses was insightful.
The object of these clauses of the Bill is to increase access to private health services through the provision of tax subsidies for medical contributions and expenses of self-employed and formerly employed persons, including their dependants. It also aims to remove the distinction between on-site and off-site medical services.
I think one of the points made which I thought was very important was the fact that benefits in this Bill applied in terms of this particular section to those that fall above the tax threshold, namely those that earn more than R2 971 per month. Those that fall below the threshold are obviously exempt from paying tax, are not in the tax system and therefore do not receive tax subsidies related to medical contributions and expenses. In a sense, we don’t provide for it. This is a piece of tax legislation and it is not in the purview of this legislation to deal with people that fall below that threshold. It is something that we as legislators must apply our mind to.
To the hon member who spoke earlier and attacked me because perhaps I hadn’t been poor at an earlier stage, I must point out to her that she knows nothing about my past and she makes one fundamentally wrong assumption and that is that only black people can be poor. I must tell you that poverty goes across all racial barriers and the member should listen to that and remember that. [Interjections.]
A representation that I regret Treasury did not accept came from the independent producers association. The amendment tabled seeks to stimulate the film-making industry in South Africa by allowing for the deduction of production and post-production costs if 75% of those costs are paid to individuals or entities attracting tax in South Africa.
Accepting that the market for South African films, without some international stars, is limited, they argued for a formula that would allow for some deduction upfront of the costs of these stars. This argument seemed to me to be of merit and would pave the way, I believe, for the aggressive marketing of essentially South African-made films in markets where these stars have high recognition.
Two further amendments that deserve a short mention are those, firstly in respect of capital gains tax where the period of eligibility for capital gains tax for foreign skilled persons temporarily working in South Africa, is extended from three to five years. This is an excellent introduction, particularly in the light of the skills shortage that we have. I should hope that it acts as an extra incentive for people coming to work here for short-term periods.
Secondly, I think a vital piece of legislation which, once again, is firmed up in this Revenue Laws Amendment Bill, is the urban development zone clause, with the benefit of accelerated depreciated allowances for construction and development being extended to first-time buyers. This is excellent and we approve of it. [Time expired.]
Mr T E VEZI: Chairperson, in the interest of time, I will not now start tabulating the various amendments, which this Bill deals with. This is a well put-together Bill with the majority of measures introduced, understandable, justified and welcomed.
The IFP supports the accelerated allowances for small businesses, but same should be accompanied by relaxing leasing restrictions. Restrictions of leasing will restrict the ability of small businesses to invest. The IFP supports a simplified tax system and in the circumstances substantial resources should be applied to interpret and apply the tax rules. The IFP advocates the adoption of international accounting standards to resolve the ambiguity of derivatives. Tax amendments for policy objectives should be supported by financial impact assessments.
The proposals contained in the Revenue Laws Amendment Bill will contribute to broad-based empowerment by offering tax breaks for broad-based share plans directed to lower-level employees. The IFP supports the Revenue Laws Amendment Bill. Thank you. [Applause.]
Mr S N SWART: Chairperson, churches in South Africa form huge NGOs providing vital mission assistance to communities. In providing these benefits, they relieve the financial burden which otherwise falls on the state. Tax benefits are designed to assist such PBOs with resources to enable them to fulfil their responsibilities to the community and achieve their objectives.
Certain proposals were made by the Methodist Church and the SA Council of Churches. Some of them were accepted in full or in part, others were rejected. For example, the concept of a rebate was withdrawn. In order to assist PBOs, where trade and income unrelated to the objective of the PBO constitutes a small part of the total income of that PBO, a de minimis threshold is to be introduced. This we support.
The proposal of a uniform tax rate for PBOs was noted as a matter requiring further research. The department also accepted proposals regarding capital gains. Whilst there were various concerns that were not accommodated by the department, the ACDP will support this Bill. [Time expired.]
Mr M T LIKOTSI: Chairperson, these amendments affect six of our revenue laws. Our revenue laws are aimed at the collection of state annual income from which the public expenses are met. The intention of these laws is good but we must look into their impact on the nation.
The Estate Duty Act of 1955 refers to the determination of duty payable to the property of the deceased. This leaves the dependants of the deceased with a dispute of fighting over crumbs after a portion of the will is paid as tax. The Value-Added Tax Act of 1991 has left most of our African businesses bankrupt.
There has been a witch-hunt for businesses that operated prior to the new dispensation for taxes not submitted in the old apartheid era. During the scrapping of arrears for services in 1994, the businesses of Africans were not included in the deal. Today they bear the brunt. The government must protect African businesses. The PAC supports this Bill.
Ms S RAJBALLY: Thank you, Chairperson. The MF supports the authority given to the Minister of Finance by amending the Transfer Duty Act of 1949. Further amendments made in terms of succession law to the Estate Duty Act of 1955 are found just and therefore supported. In terms of the amendment made to the Income Tax Act of 1962, the MF finds clarity in provisions made that shall clear subtle discrepancies in sectors such as tax credit, rebates and foreign investments.
Clarity and provision are also provided for other business sectors and the MF hopes that these shall be applied effectively to bring our economy in line with global trends, make growth and development more accessible and make investment easier and more attractive.
Further amendments made on the Value-Added Tax Act of 1991 provide greater clarity and we agree that they bring the Act in line with the Customs and Excise Act of 1964. The changes made in terms of VAT debts will persuade our people to live within their means and spend on necessities for survival. The MF supports the Revenue Laws Amendment Bill. [Time expired.]
Mr B A MNGUNI: Thank you, Deputy Chairperson, I would like to highlight just a few things already mentioned by the hon Bhamjee. I will only mention three or four of those issues.
Public benefit organisations have been taken care of, although, as the hon member has said, some ideas still need proper investigation. For instance, the PBOs such as churches can now exceed their income limits when engaged in trading activities, which are not actually objectives of the church, but they have the opportunity to raise funds. In that way, there are positive externalities as the wealth of our communities increases. On the other hand, there are also positive externalities as far as the tax is concerned because they increase the tax base of the country for sustainable revenue. In simple terms, these concessions help the PBOs to raise their tax threshold from R25 000 to R50 000. In recognition of the sacrifices made by individuals who were members of the liberation movements, special pensions provisions were introduced for such persons through the enactment of the Special Pensions Act, Act No 69 of 1996. The consequences for recipients of special pensions are not often understood by the beneficiaries. Therefore, the beneficiaries must take note that special pensioners will not pay tax on any funeral benefits, payable in terms of the Special Pensions Act of 1996. The beneficiaries must clearly understand that these tax exemption provisions only apply to funeral benefits.
Generally, recipients of special pensions are liable for a tax if such beneficiaries have a total income that exceeds R35 000 on 28 February 2006 and that should be the day of handing in your income tax return.
It is an accepted practice internationally for entertainers and sportspersons to pay tax in countries in which they perform. Now the problem arises where the state or the government is unable to collect that tax due to the little time those sports personalities or entertainers spend in the country. A provision is made here so that those entertainers do pay tax by proposing that the organisers who are resident in South Africa must be made liable for that tax due by the entertainer or the sports personality. It will be 15% of the gross income paid to the entertainer. The rate is applicable to all those people who come into the country to entertain. SADC entertainers, the people from our neighbouring countries, paid only 5%. Now there is a proposal that they should also pay the 15% rate, because if they pay 5%, it is against the general agreement on trade and tariffs. So, to comply with international standards, they will now also pay 15%. However, that 15% is not tax deductible as it is paid to the organisers, who retain it, or to the event management who organised the party, so that the people who leave the country will pay their dues. It won’t be tax deductible.
Earlier on there was a share scheme for companies that they got when they gave shares to their employees. That share scheme gave the wrong impression that people who leave the company before 5 years will not pay tax. This Bill proposes that that perception be corrected and employees who leave the company and who got those equitable shares, will be liable for tax.
It further proposes that if a company is taken over by another company or if it is restructured, the new shares that are accrued to that particular individual or employee should not have a limit. With this equitable share scheme there was a limit of shares that the company could give to the employee.
In short, these are the issues that I would like to bring to light for the members and the public as such. There are a lot of issues that are addressed by the Bill, of which the ideology behind the whole of this Bill was debated in the Budget Speech as such. This Bill just effects administratively all those proposals made by the Minister in his budget speech. I thank you. [Applause.]
The MINISTER OF FINANCE: Thank you very much, Chairperson. I have been given the task to filibuster until the next Order is ready to appear before the House. [Interjections.] Let me deal with just a few issues, Chairperson. I hope that the officials are running around to try and find those involved in the next Order. [Interjections.] No, I didn’t have dinner, unlike some members who may be tired and emotional at this stage.
One of the issues that I’d like to respond to is what the hon Davidson raised about the film-making incentives. Around the world, the big, big problem is that incentives have been horribly exploited. The stories in South Africa are legion and there is a high level of aggressive marketing. Clearly, film is going to be an important industry in this country. We must recognise it and we must be able to structure the appropriate balances.
The previous allowances, of course, required some definition of a film as being a South African export film. Now we have levelled the playing field, so all films should be able to benefit. That is the key issue and I think we must, with DTI, the IDC, from the perspective of Sars, must remain engaged with this issue to examine how, in an orderly way, we can support an industry like this. As a tribute to the hard work that the hon Davidson put into preparing for today, I want to get him a ticket to go and see the premiere of Mama Jack, one of the new South African films this weekend.
The second issue I’d like to deal with is the matter raised by the hon Likotsi. We were very mindful of the position that affected a number of black businesses pre-democracy and so, in very close proximity to each other, we actually had two tax amnesties. I met with Nafcoc in virtually every region in the country to ensure that all of their members understood that those who were reasonably outside of the tax law, could benefit from the amnesty and there could be a new beginning in the advent of democracy.
We reached many, but there were some who were so far outside the norms, that we couldn’t. Those remained some difficult cases, but on a visit earlier this year to Limpopo where I met with hundreds of small businesspeople to discuss tax issues, I was astounded to see how many of them were tax compliant and felt aggrieved that others were not tax compliant. Frequently the grievance that small businesspeople express against foreigners who have recently settled in the country, is that they don’t contribute to the tax pool. Businesses say that they would like to help Sars to ensure that everybody becomes compliant. We are actually on a good wicket. The changes announced earlier this year in respect of a very open window to small business, the availability of software to help businesses to be compliant, the employment of tax helpers by Sars, the opening of the Soweto tax office earlier, all of that is part of the same strategy, which includes a very important element of outreach.
The last point that I’d like to respond to, is the matter raised by the hon Swart. The difficulty we have is: When is a church a church? When is a church a business, which amongst other business activity, purveys biblical tracts or something else? [Interjections.] It is a fundamental question. I have been in discussion with the SACC about this matter, because there are some churches that are actually way beyond the margins of decency in respect of what they rake in from their congregations.
I think it would be a travesty to include the deeming provisions that should apply to bona fide nonprofit PBOs, including those in the faith community, to those kinds of businesses. We have a difficulty and I have asked Dr Cele to help us see whether somewhere in the depths of theology, there is some definition of what a church is but we are still waiting for the answer to that.
There is one last issue, which I think is probably the best news, Chairperson. One of the issues in this Bill and its amendments – and the hon Koos van der Merwe would know this as a lawyer – in paragraph 10 of Schedule 7 is a benefit that we had to build in for MPs. It relates to travel privileges for people who work more than 250 km from where they would normally reside.
There is one difficulty with it and that is that members must have been at a place other than their normal place of residence for 183 days. [Interjections.] No, I don’t think it is funny. [Interjections.] The problem, Chairperson, and I want to address the Chief Whip’s Forum on this matter, is that by tomorrow, Parliament would have sat for 178 days this year. So you either find 5 more days or you pay the tax and for your families’ travel privileges. [Laughter.] Thank you. [Applause.]
THE HOUSE CHAIRPERSON (Ms C-S Botha): If you’d kept on speaking as slowly as you started off, we would have been here for another five days! [Laughter.]
Debate concluded.
Bill read a first time.
REVENUE LAWS AMENDMENT BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
REVENUE LAWS SECOND AMENDMENT BILL
(Second Reading debate)
There was no debate.
Bill read a second time.
ELECTRICITY REGULATION BILL
(Second Reading debate)
The MINISTER OF MINERALS AND ENERGY: Madam Chairperson, hon members, I table before you the long-awaited Bill in the electricity sector, the Electricity Regulation Bill. Allow me to remind you that South Africa is well-endowed with energy resources, which, unfortunately, were historically exploited for the benefit of a few and to the exclusion of the majority of our people. With the broad spectrum of our energy carriers, electricity is one that has contributed, and will continue to contribute, to the sustainability of both our economical and social lives.
Our White Paper on the Energy Policy, developed in 1998, was informed by the realisation of the fact that the apartheid system had bequeathed to us a legacy of an electricity industry that was characterised by a chaotic regulatory regime, poor and fragmented service delivery, and a limitation of access to the privileged minority.
As was stated in the said policy, various legal instruments would be needed to give effect to a number of objectives outlined in the energy White Paper. Subsequent to the promulgation of the energy White Paper, numerous Cabinet decisions were taken as part and parcel of the tools to actualise this policy, with due regard to the dynamic global environment which was impacting upon the electricity industry in general.
The legislation that I table before you today is, amongst others, one of those instruments designed to weave together the various aspects of the plan to restructure the electricity industry, as contained in the said Cabinet decisions.
We are also aware of the limitations of the existing electricity regulation legislation, namely the Electricity Act of 1987, as amended. You will recall that this Act, as amended, sought to establish the National Electricity Regulator.
Madam Chairperson, hon members, allow me to illustrate the said limitations by way of an example. It is a well-known fact that South Africa has been enjoying the cheapest electricity prices in the world at the wholesale level. It is also known that the domestic tariffs in most local government cases do not reflect these low prices, for reasons that will be outlined later.
If we are to address poverty and facilitate the improvement of the quality of life of our communities, we need to be able to effectively regulate electricity prices for the benefit of the end user.
This Bill, therefore, seeks to address the shortcomings in the existing legal framework, by ensuring that our legislative framework is in line with our constitutional framework and provisions of other prevailing subordinate legislation. The Bill also seeks to empower the National Electricity Regulator and its successor, the National Energy Regulator of South Africa, to efficiently and effectively regulate this industry.
The Bill also seeks to regulate the total electricity value chain, from generation through transmission to distribution and the trading of electricity. In that context, the powers of the regulator to address such concerns as the blackout pandemic that we have seen in our major cities like Johannesburg, Tshwane, including the experience of Cape Town this past week, and other municipal undertakings, are reinforced.
Also in line with the White Paper on the Energy Policy, in May 2001 a plan was conceived to adapt the role of the regulatory system, which includes, amongst other things, the reform of the legal framework defining the role of the National Energy Regulator, the development of a new framework for licensing, the adaptation of the price-setting regime, the creation of capacity to monitor the effectiveness of the electricity industry, and ensuring the security of supply.
With a view to giving effect to the above objectives, this Bill also bestows on the regulator powers to license generation, transmission, distribution and trading, to register unlicensed service providers, to impose punitive measures in the event of breach of licence conditions, as well as to set tariffs.
I would like to point out to you that this Bill empowers the regulator to impose a penalty of R2 million per day or 10% of the annual turnover, to be paid by the offending licensee, as imposed by the regulator.
What is presented here today is a section of the electricity regulatory framework that complies with the provisions of section 75 of the Constitution.
Issues pertaining to the electricity reticulation as an area of competence of the local sphere of government have been excluded from this Bill and will be the subject of another Bill, which will be introduced in due course. Also to be introduced in due course will be the Electricity Distribution Industry Restructuring Bill, which will enable us to reform the EDI in a manner that attains the objectives of our energy policy.
The following are the substantive issues that were raised during the public hearings and that were deliberated upon by the Portfolio Committee on Minerals and Energy: First is the role clarification between the Minister and the regulator. In terms of the governance framework, the Minister remains the custodian of government policy and monitoring. The Minister will also draft regulations.
On the other hand, the regulator will be responsible for those administrative functions, which include the overseeing of adherence to regulations. The regulator will also be responsible for execution of such regulations, drafting the rules and procedures pursuant to such regulations, as well as drafting directives provided for under the regulations.
The second substantive issue that came up is facilitating renewable energy and the independent power producers. Due to our increasing energy needs and our anticipated economic growth, we expect large investments in the energy sector. This also provides us with an opportunity to diversify our primary energy sources, which at the moment are dominated by coal.
In order to be able to diversify our energy mix, including the introduction of renewable energy sources, the Bill provides for non-discriminatory access to electricity produced by the independent power producers in the electricity networks. Moreover, in order to meet our projected energy demand in the next twenty years, which will require an investment of approximately R240 billion, participation of the independent power producers has become necessary to ensure the security of supply.
The last substantive issue that I would like to deal with is legislation of the key performance indicators. As alluded to earlier, the Bill will allow government to address the current quality of supply problems of the magnitude that has recently been experienced throughout the country. It also empowers the Minister to formulate regulations relating to the norms and standards regarding the following: one, the level of investment in infrastructure relating to new assets; two, the level of maintenance expenditure; three, the quality of supply, and other key performance indicators, as well as penalties. This would significantly enhance our ability to address the problem, which has significant socio-political as well as economic impact.
In conclusion, by supporting this Bill, you will be creating an environment conducive to effective and efficient service delivery to the end user at an affordable price. Blackouts and brownouts will be effectively managed, and the security of supply will be enhanced. I thank you. [Applause.]
Mnu E N MTHETHWA: Sihlalo, Ngqongqoshe, boNgqongqoshe abakhona nethimba lezezimbiwa namandla, maqabane nesizwe sonke, umbutho wesizwe usaqhubeka nokushaya imithetho ehambisana noMthethosisekelo, njengoba kufanele. Isheduli 4, iNgxenye B, yoMthethosisekelo ibalula ukuthi amandla okuphaka ugesi asesezandleni zikahulumeni wasekhaya.
Lo Mthethosivivinywa esiwubeka lapha phambi kwenu namhlanje uhlose ukufeza iphupho eliqukethwe kwinqubo yethu yokwakha nokuvuselela ebizwa nge-RDP. Lelo phupho lithi bonke abantu bayothola ugesi. Lo Mthethosivivinywa uphinda uqede uMthetho kaGesi owashaywa ngonyaka ka-1987 ngesikhathi kusadliwa ngendebe endala. (Translation of Zulu paragraphs follows.)
[Mr E N MTHETHWA: Chairperson, hon Minister, Ministers present, the Portfolio Committee on Minerals and Energy, comrades and the nation at large, the ANC continues to pass laws that are in line with the Constitution, as a requirement. Schedule 4, Part B of the Constitution provides for local government legislative competence on matters of electricity and gas reticulation.
The Bill that we present before you today is intended to achieve the objective of the RDP. That objective goes on to say all shall have water and electricity. This Bill further repeals the Electricity Act of 1987 passed during the old order.]
Hon members, the Electricity Regulation Bill seeks to consolidate and integrate the regulation of the energy industry. As the ANC, we believe that the central regulation of the energy industry will ensure uniformity, control and progress in the industry.
As some might be concerned about the future of the employees of different energy regulators, it should be noted that the integration of different energy regulators will not result in any job losses. This legislative development strengthens and recognises the role of the National Energy Regulator of South Africa, which we will refer to as Nersa.
In terms of the Bill, the regulator is mandated to be the enforcer of the national electricity regulatory framework. The National Energy Regulator will be responsible for the provision of licences and registration for generation, transmission, distribution and import and export of electricity. It is imperative to note that the Electricity Regulation Bill focuses on the electricity component of energy.
This legislative development addresses itself to the economic regulation of the electricity industry. The health and safety component of the regulation is within the ambit of the Department of Labour.
The maintenance of quality service standards is central to this Bill. The Bill strengthens the regulator’s ability to ensure high quality of service. The underlying objective of this Bill is to stimulate and encourage foreign direct investment. In this instance the Bill encourages the independent power producer to invest in South Africa.
Logically, it is a known fact that government cannot afford to develop the electricity infrastructure alone. The private sector has a significant role to play in this regard. The Bill allows the Minister to introduce independent power producers.
This is in the interest of contributing positively to the economic growth of South Africa. The private sector will bring in new technologies in the area of electricity distribution and infrastructure to improve quality of service. As the ANC, we believe that communities should play a meaningful role on issues of tariff setting, quality of service, etc.
It should be noted that the Electricity Act of 1987 did not encourage community participation, and the Electricity Regulation Bill encourages community participation through end user forums. The end user forums are a direct expression of the Freedom Charter principle, which proclaims that the people shall govern.
It is in this spirit that the ANC advocates popular participation for people’s power and an active citizenry. Principles of the developmental state are hinging upon the fundamentals of popular democracy, and the ANC, as the voice of the masses of this country, will continue to advance their interest.
This Bill addresses itself to requirements as contained in the Promotion of Access to Information Act and the Promotion of Administrative Justice Act. Furthermore, in the past big electricity utilities would default through outages and other things and in return they would just write cheques to pay whatever penalty was required.
This legislative development seeks to empower Nersa to have more authority. The regulator will, for the first time, have teeth to bite. In enforcing required service standards, the regulator can also sit as a tribunal to impose penalties on offenders. In circumstances of outages, a fine of R2 million per day will be handed down, as the Minister has mentioned.
The Bill intends to curb outages that have been dogging our country. A typical example would be the outages that happened recently in the Johannesburg Metropolitan Municipality, under the auspices of City Power.
It should also be noted that the Bill intends to stimulate quality service, and this will be in the interests of the masses who are end users. Our socioeconomic and political consciousness ensures that we continue to develop progressive legislation for the benefit of all South Africans.
As the Reconstruction and Development Programme pronounced that there should be electricity for all, it is on that footing that the ANC commits itself to this just cause for the betterment of the lives of the masses of our people.
The promulgation of the Electricity Regulation Bill seeks to usher in long- overdue transformations into the energy sector. As the ANC we support the Bill. Thank you. [Applause.]
Adv H C SCHMIDT: Madam Chair, the contentious issues relating to the right of municipalities to reticulate electricity has been acknowledged by this Bill. The Constitution states that municipalities have the inherent power to reticulate electricity, while this Bill attempts to regulate that right of municipalities to ensure that the objectives of the electricity industry are met.
The provision of electricity by municipalities has been erratic at the best of time. This is an aspect which this Bill attempts to address by granting the National Energy Regulator the power to consider and issue licences, set up advisory forums as well as customer and end user forums in order to ensure the development and operation of electricity supply infrastructure.
Furthermore, it seeks to ensure that the interests and needs of present and future electricity customers are safeguarded, facilitate investment and universal access to electricity as well as promote competitiveness and customer choice, creating a fair balance between the interests of customers, licences and investors in the electricity supply industry.
The restructuring of the distribution industry into regional electricity distributors – REDS - is still to take place, with confusion as to whether six REDS, with a seventh national RED encompassing those rural municipalities which do not form part of the REDS, will in fact be constituted. It is clear that the REDS are currently heading for a disaster as RED 1, the so-called regional electricity distributor for the Western Cape region, currently consists only of the city of Cape Town.
This matter is still to be addressed in a Bill yet to be introduced, the contents of which initially formed part of this Bill, but had to be removed due to extensive pressure by local government authorities due to their unwillingness to surrender the income derived from electricity reticulation.
As stated during the briefings to the portfolio committee, most countries on the continent are moving towards independent regulation and have unbundled the electricity supply chain into generation, transmission and distribution, with the independent power producers playing an increasingly important role.
Insofar as the Bill encourages competition in energy supply, it is supported. It should furthermore encourage efficient use of electricity and meet social objectives such as electrification by providing energy requirements to the most needy section of our society. It is important to note that the Bill provides for the establishment of privately owned electricity generators.
In summary, this Bill regulates the powers and duties of the regulator, determines which activities require licensing and which activities don’t, sets the conditions for the application of licences and the advertising thereof, the rules regarding the amendment and renewal of licences and the contraventions thereto.
In short, these powers are extremely important as the base load of electricity supply is clearly running out and new power stations are urgently required in order to prevent a shortage of power supply leading to the blackout which Cape Town experienced last Friday due to the Koeberg Nuclear Power Station shutting down, inter alia, due to an overload of the power requirements placed on the Koeberg power station. The DA will be supporting this Bill. I thank you. [Applause.]
Mr E J LUCAS: Chairperson, at times we take the value of an important commodity such as electricity for granted, and we also forget how reliant we are on it. [Interjections.] This past Friday afternoon, large parts of the Western Cape were left . . . [Interjections.]
THE HOUSE CHAIRPERSON (Ms C-S Botha): Order, members! Hon Lucas, one moment please. Please, I cannot hear the speaker. Please continue, hon member.
Mr E J LUCAS: This past Friday afternoon, large parts of the Western Cape were left without electricity when the Koeberg transmission network apparently tripped. This blackout illustrated just how reliant we are on electricity, and the importance of a reliable source of electricity.
The memorandum to this Bill states that the government’s intention is to optimise the operation of the industry to maximise the potential for adequate, reliable and low-cost electricity to serve the people and industries of South Africa. It is imperative not only for economic development, but also for community and social development that these intentions are realised.
The main objective of the Bill is to set out the role for a national electricity regulator in respect of the electricity industry, with regard to licensing, setting tariffs and setting of norms and standards for the operators of the electricity industry. Other important objectives of this Bill are to provide the legal framework for the generation, transmission and distribution of electricity to individuals, communities and the business sector, as well as to provide for the establishment of privately owned electricity generators.
We in the IFP are very concerned that an important part of the Bill, the section dealing with municipalities, has been left out. In the objectives of the Bill it is stated that the Bill recognises the rights of municipalities, in terms of Schedule 4B to the Constitution, to reticulate electricity and at the same time regulate the right in order to ensure that municipalities meet the objectives of government in an electricity industry. We have been told that this aspect will be dealt with in a separate Bill that will come before the committee at a later stage. We hope that it will come before the committee soon, as it is a very important part.
I have been a member of the Portfolio Committee on Minerals and Energy for many years, and that committee has always worked well. I was, however, very disappointed at the procedures followed with the handling of this Bill. The IFP supports the Bill. [Time expired.]
Mr G T MADIKIZA: Madam Chair and hon members, the sheer number of previous amendments to the Electricity Act of 1987 has made it a clumsy and increasingly redundant piece of legislation. The need to simplify the legislative framework was sufficient to justify the introduction of this Bill. In addition, government is pursuing certain policy changes. Chief amongst these is the establishment of the National Energy Regulator, which will replace the National Electricity Regulator.
The electricity industry is dominated by large and powerful entities with huge bureaucracies, such as Eskom, large national and multinational consumers, and government. In this mix, the average residential consumer is a very small person facing gigantic interests with budgets of hundreds of millions. The National Energy Regulator must prove its value by demonstrating that collective and individual rights of residential electricity consumers will be actively protected and promoted against the narrow interests of other stakeholders in the industry.
The industry remains a complex monopoly prone to exploiting the residential electricity consumer. Thank you, Madam Chair. The UDM supports the Bill. [Time expired.]
Mnr J J COMBRINCK: Agb Voorsitter, Suid-Afrika behoort aan almal wat daarin woon, en die rykdom van Suid-Afrika sal ook aan almal behoort wat daarin woon. Dié is twee belangrike sinne in die Vryheidsmanifes.
Dit was vir hierdie droom dat duisende Suid-Afrikaners hul lewens moes opoffer vóór 1994. Dis hierdie droom wat die ANC tot vandag toe die gewildste organisasie in Suid-Afrika gemaak het, omdat die ANC ‘n ooreenkoms en ‘n kontrak met alle Suid-Afrikaners gesluit het om ‘n beter lewe vir almal te bewerkstellig.
Wie is jy en waarheen gaan jy, en het jy reeds eienaarskap van Suid-Afrika onder die ANC-regering aanvaar? Want, as jy nog sukkel om dit te aanvaar, moet jy dringend selfondersoek gaan doen. Dan moet daar iets met jou lewe verkeerd wees. Die onvermoë van baie mense in Suid-Afrika, en veral onder die groepe wat vóór 1994 redelik bevoordeel is, om die demokrasie te verstaan laat ‘n mens die vraag vra: Hoe lank gaan dit nog neem om Suid- Afrika ‘n land te maak wat werklik vry gaan wees van enige ongeregtigheid?
Met die terugkyk na die verlede is die doel geensins om skuldgevoelens aan te wakker of selfs skuld toe te dig nie. Skuldgevoelens is ‘n negatiewe energie en onaangespreek dien dit geen doel om iets positiefs by te dra tot die toekoms nie.
Hoe elkeen van ons met die verlede handel, is ‘n persoonlike keuse. Die tempo waarteen elkeen kies om dit te doen, is ook ‘n persoonlike keuse. [Tussenwerpsels.]
Mnr W D SPIES: Wat het dit met die wet te doen? Mnr J J COMBRINCK: Die probleem is, julle gewetens pla julle, daarom sal julle aanmekaar sit en praat daaroor. Tot en met 1994 het niemand … [Tussenwerpsels.] As jy luister dan sal jy hoor waarheen ek oppad is, maar die probleem met julle is, julle vergeet waar baie van hierdie mense vandaan kom. [Tussenwerpsels.]
Tot en met 1994 het niemand regtig geweet wat ‘n demokrasie . . . [Tussenwerpsels.]
Mnr J P I BLANCHÉ: Op ‘n punt van orde, Voorsitter: Ons is nou met ‘n wet besig, kan u net die spreker daaraan herinner sodat hy by die punt bly en by die wet uitkom? [Tussenwerpsels.]
Mnr J J COMBRINCK: Die probleem met die DA is dat hulle nie wil luister nie. Hulle vergeet ‘n mens maak ‘n punt om by die einde uit te kom.
Nou reeds 11 jaar in die nuwe Suid-Afrika het die demokrasie só deel geword van elke dag se bestaan dat ons nie eens meer agterkom hoe gelukkig ons is om saam te lewe sonder om eers toestemming te vra vir ‘n plekkie onder die son nie. [Tussenwerpsels.]
Ek wil u vra: plaas jouself in die skoene van ‘n ouerige dame van 60 jaar, wat haar hele lewe nog net ’n bestaan gemaak het deur daagliks kilometers ver te stap om haar hout te gaan haal om vuur te maak; om water te gaan haal om haar kinders te was en skoon te maak. Vandag bly dieselfde persoon in ‘n huis wat die ANC-regering aan haar verskaf het. Daar is lopende water . . . [Tussenwerpsels.]
Mnr J P I BLANCHÉ: Voorsitter, op ’n punt van orde: Ek het vroeër ‘n punt van orde gehad en u gevra om ‘n beslissing te doen, sal u asseblief daaroor beslis? [Tussenwerpsels.]
DIE HUISVOORSITTER (Me C-S Botha): Agb lid, ek sal ‘n beslissing maak wanneer ek dink dit is nodig, dankie.
Mnr J J COMBRINCK: Daar is derduisende gevalle soos hierdie in Suid-Afrika waar kragstasies wat in die apartheidsjare gebou is, volslae mislukkings is. Hulle is die meeste ontwikkel… [Tussenwerpsels.] Man, dit is omdat julle nie geluister het nie! [Tussenwerpsels.] Mens moet ‘n ding vat om tot ‘n punt te kom. Meeste van hulle is vóór 1994 ontwikkel . . . [Tussenwerpsels.]
Meeste van hulle is vóór 1994 ontwikkel met die uitsluitlike doel om aan fabrieke en ‘n uitgesoekte groepie – waarvan die DA steeds ‘n deel is – elektrisiteit te voorsien. As gevolg van hierdie oorbelaaide kragsentrales in Suid-Afrika ondervind baie stede en dorpe gedurig kragonderbrekings.
Dié van u wat verlede Vrydag in die Kaap was, sal besef hoe ongemaklik die lewe sonder elektrisiteit geraak het. Dit is teen die agtergrond van bogenoemde feite dat die Minister van Minerale en Energie besluit het om die elektrisiteitsreguleringswetsontwerp ter tafel te lê. Dit is in soortgelyke omstandighede wat baie lande wat in dieselfde omstandighede as Suid-Afrika was, ook begin het om hul elektrisiteitsvoorsiening te ontbondel. Die doel is dat die regering die wetsontwerp neerlê en dat die reguleerder die tegniese sy en kapasiteit reguleer.
Die sukses van dié wetgewing is dat almal baie seker moet wees oor die rol wat elke speler in die bedryf moet speel, met ander woorde, die regering, die reguleerder, die provinsiale en munisipale owerhede. Die reguleerder se hoofdoel sal ten alle tye wees om deursigtig te wees. Verder sal die reguleerder ook seker maak dat daar geen diskriminasie tussen die verskillende klasse in die samelewing is nie. Die lisensies wat aan die elektrisiteitsontwikkelings uitgereik word, sal deur die reguleerder uitgereik en gekontroleer word. Die reguleerder sal ook pryse en tariewe reguleer.
Ons almal weet dat Suid-Afrika van die goedkoopste elektrisiteit het, maar teen die tyd wat dit by die eindverbruiker uitkom, het dit soms tot vyf maal duurder geword. Dus is daar goeie nuus vir kiesers op pad. Munisipale distriksrade kan nie meer van elektrisiteit vra wat hulle nodig het nie.
Hierdie wet maak ook voorsiening dat ander private kragstasies ook nou kan ontwikkel word, veral teen die kusgebiede, want die meeste van ons elektrisiteit kom van die binneland waar daar meer standhoudende riviere vir hidroëlektrisiteit en steenkoolmyne is. Die vervoer van steenkool na kusgebiede is baie duur, en daarom is elektrisiteit ook baie duur teen die kusgebiede.
Die kans om op ander maniere elektrisiteit op te wek, is nou gebaan. In hierdie geval dink ons veral aan PWMA’s, sonpanele en windmeulens. Die reguleerder sal ook almal registreer wat tot op datum elektrisiteit opwek maar onder geen beheerliggaam val nie. Die kwaliteit van elektrisiteit en die gereeldheid daarvan, sal ook nou gereguleer word. Die reguleerder sal verder ‘n gebruikersforum stig waar alle eindverbruikers die probleme kan aanmeld.
Met dié wet gaan die ANC-regering weer eens tot sy uiterste om ‘n beter lewe vir almal te bewerkstellig. In Afrika is daar geen middeweg nie; ons droom en visie moet ten alle tye wees om die armstes van die armes te help.
Diegene van ons wat vanaand probleme met dié wet het, het nooit soos daardie 60-jarige tannie die hout vir vuur gaan haal nie, en ook nie die stink rook van steenkool ingeasem gedurende die wintermaande nie. Die ANC steun hierdie wetsontwerp. Ek dank u. [Applous.] (Translation of Afrikaans speech follows.)
[Mr J J COMBRINCK: Hon Chairperson, South Africa belongs to all who live in it, and the wealth of South Africa will also belong to all who live in it. These are two important sentences in the Freedom Charter.
It was for this dream that thousands of South Africans had to sacrifice their lives before 1994. It is this dream that has made the ANC the most popular organisation in South Africa to date, because the ANC has come to an agreement and contract with all South Africans to bring about a better life for all.
Who are you and where are you going, and have you already accepted ownership of South Africa under the ANC-led government? Because if you are still struggling to accept it you should seriously do some soul-searching. Then there must be something wrong in your life. The inability of many people in South Africa, especially among those groups who were relatively privileged before 1994, to understand democracy leads one to ask the question: How long is it still going to take to make South Africa a country that will be truly free of any injustice?
Looking back at the past the aim is certainly not to conjure up feelings of guilt or even instil guilt. Feelings of guilt are a negative energy and if not addressed serve no purpose in contributing anything positive to the future.
How each of us deals with the past is a personal choice. The pace at which everyone chooses to do so is also a personal choice. [Interjections.]
Mr W D SPIES: What does that have to do with the Bill.
Mr J J COMBRINCK: The problem is that your consciences are bothering you, which is why you will constantly talk about it. Up to 1994 no one… [Interjections.] If you listen, you will hear where I am heading, but the problem with you is that you forget where many of these people come from. [Interjections.]
Up to 1994 nobody really knew what a democracy . . . [Interjections.]
Mr J P I BLANCHÉ: On a point of order, Chairperson: We are dealing with a Bill, will you please remind the speaker of that so he can stick to the topic and get to the Bill? [Interjections.]
Mr J J COMBRINCK: The problem with the DA is that they don’t want to listen. They forget that one has to make a statement to get to the point.
Now already 11 years into the new South Africa democracy has become so entrenched in our day-to-day existence that we don’t even realise any longer how lucky we are to live together without first having to ask permission for a place in the sun. [Interjections.]
I want to ask you: Put yourself in the shoes of an elderly lady of 60 years, who has throughout her whole life had to make do by walking for kilometres to fetch wood to make a fire; to fetch water to wash her children. Today this same person is living in a house the ANC-led government provided her with. There is running water . . . [Interjections.]
Mr J P I BLANCHÉ: Chairperson, on a point of order: I had a point of order earlier and asked you to make a ruling on it. Would you please make a ruling on it? [Interjections.]
THE HOUSE CHAIRPERSON: (Ms C-S Botha): Hon member, I will make a ruling when I deem it necessary, thank you.
Mr J J COMBRINCK: There are thousands upon thousands of cases like this in South Africa where power stations that were built during the apartheid years are complete failures. Most of them were developed… [Interjections.] Man, it is because you didn’t listen! [Interjections.] One has to make a statement to reach a point. Most of them were developed before 1994 . . . [Interjections.]
Most of them were developed before 1994 for the sole purpose of providing factories and a selected group – which the DA is still a part of – with electricity. Due to these overburdened power stations in South Africa many cities and towns are experiencing regular power failures.
Those of you who were in the Western Cape last Friday will know how inconvenient life has become without electricity. It is against the backdrop of the above-mentioned facts that the Minister of Minerals and Energy decided to table the Electricity Regulation Bill. In similar circumstances many countries that were in the same situation as South Africa also started unbundling their electricity supply. The aim is that government tables the Bill and the regulator regulates the technical side and capacity.
The success of this legislation is that everyone must be very sure of the role each player in the industry has to play, in other words, government, the regulator and provincial and municipal authorities. The regulator’s main aim will at all times be to be transparent. Further the regulator will also ensure that there is no discrimination between the different classes in society. The licences issued for electricity development will be issued and controlled by the regulator. The regulator will also regulate prices and tariffs.
We all know that South Africa has some of the cheapest electricity, but by the time it reaches the end user, it has sometimes become five times more expensive. Therefore, there is good news on the way for voters. Municipal district councils can no longer demand what they need from electricity.
This legislation also makes provision for other private power stations to be developed, especially in coastal areas, because most of our electricity comes from inland where there are more perennial rivers for hydro- electricity and coalmines. Transporting coal to coastal areas is very expensive and that is why electricity is also very expensive in coastal areas.
The way has now been paved to generate electricity in other ways. In this instance we are thinking specifically of PBMRs, solar panels and windmills. The regulator will also register all those that have been generating electricity to date but do not fall under any governing body. The quality and regularity of electricity will now also be regulated. The regulator will further establish a user forum where all end users can report these problems. With this legislation the ANC-led government is once again doing its utmost to achieve a better life for all. In Africa there is no midway; our dream and vision should at all times be to assist the poorest of the poor.
Those of us who have a problem with this legislation tonight have never, like the 60-year old lady, fetched wood for the fire and breathed in the smelly coal smoke during the winter months. The ANC supports this Bill. I thank you. [Applause.]]
Mr H B CUPIDO: On Friday, 11 November 2005, Cape Town was brought to a virtual standstill as a result of a power failure. A leading South African economic expert stated that the impact of this powercut on the economy could run into millions of rands. This incident clearly illustrates our heavy reliance on the efficient provision of electricity. It is within this context that the ACDP harbours certain concerns with regard to the Electricity Regulation Bill.
The Bill provides for the establishment of privately owned electricity generators. The proposed regulator is further not required to set specific criteria for licence applications. The question that arises is: How will this affect the quality of service delivery? This is particularly disturbing when one considers the fact that the restructuring of the electricity distribution industry is not yet a cut-and-dried situation.
The Minister has further contended that the Bill will attract investment and create jobs. There does not however appear to be a coherent plan or framework in place that clearly shows how this will be achieved.
Notwithstanding some of our concerns, the ACDP will support this Bill. [Applause.]
Mr M T LIKOTSI: Chairperson, the purpose of this Bill is to establish a National Regulatory Framework for the electricity supply industry. The intention is to achieve the efficient, effective, sustainable and orderly development of electricity supply infrastructure in the country.
However, there might be unintended consequences in this matter such as inferior quality, power cuts during bad weather – which are common in our residential areas - inability to fast-track provision of free electricity in compliance with the policy of free basic services, and price hikes and tariffs.
We are opposed to privatisation of strategic state assets and are for socialisation. Privatisation at this stage will suit the rich and disadvantage the poor and the unskilled who may not meet the set requirements of the regulator. Privatisation results in workers being retrenched and may aggravate poverty. In the long term, privatisation may result in monopoly. I thank you, Chairperson.
Mr R B BHOOLA: Chairperson, South Africa constitutes an approximate 46,6 million citizenry. One of our greatest challenges is to supply all of the citizenry with fresh running water, electricity, sanitation and in general improve the standard of living of the large amount of our people who are poverty-stricken.
Many in the Cape were concerned last Friday when a glitch at Eskom caused the power failure and the MF acknowledges the dominance of Eskom in the sector. It is at times like these that we realise the importance of electricity in our daily lives and it is an opportunity to wonder how those who survive without electricity actually manage.
The public at large needs to be made aware of government’s commitment to delivering to the people and its initiative to provide electricity to all by 2008 is well on its way.
The MF, in terms of the Bill, supports the National Regulatory Framework for the electricity supply industry. We therefore acknowledge the benefits of instituting a regulator to monitor, manage and regulate the sector. The Bill constitutes a well-devised plan for the electricity supply sector and we hope that with its efficient institution it shall usher in many benefits in supply, co-ordination and control of electricity to the people. Furthermore, we are glad to see the regulation of pricing and charges is addressed.
Every light powered by electricity is a sign of life. The MF strongly supports the 2008 deadline to supply all South Africans with electricity so that the 46,6 million South Africans may enjoy a better life. The MF supports the Electricity Regulation Bill. [Applause.]
Prof I J MOHAMED: Madam Chair, the Portfolio Committee of Minerals and Energy has communicated our condolences to Minister Lindiwe Hendricks, Minister of Minerals and Energy, on the passing away of her mother last week. I wish to record once again in this National Assembly our condolences and heartfelt sympathy to Minister Lindiwe Hendricks and her family.
Minister Hendricks and Deputy Minister Lulu Xingwana and the Department of Minerals and Energy, we congratulate you on the Electricity Regulation Bill and other legislation you have put before our committee in the past few weeks. These go a long way in addressing various matters of concern that the wealth of our country will be more equitably shared with our people.
The Bill’s objective is to establish a National Regulatory Framework for the electricity supply industry, to make the National Energy Regulator the custodian and enforcer of the National Regulatory Framework and to provide for licences and registration as the manner in which generation, transmission, distribution, trading and import and export of electricity are regulated.
The objectives of this Bill are, amongst others, to achieve the efficient, effective, and sustainable and orderly development and operation of electricity supply infrastructure in South Africa; to ensure that the interests and needs of the present and future electricity customers are safeguarded and met; to facilitate the investment in the electricity supply industry; to facilitate universal access to electricity; to promote the use of diverse energy sources and energy efficiency as set out in the White Paper on Energy.
The National Energy Regulator is the custodian and enforcer of the regulatory framework provided for in this legislation. The regulator must monitor performance in terms of compliance with the national government’s electricity policy framework and take appropriate steps in the case of non- performance.
It may mediate in disputes between generators, transmitters, distributors and municipalities, and undertake investigations and enquiries into the activities of licensees. We the end users trust that bodies like City Power in Johannesburg can be brought to heel and not be allowed to continue operating old outdated equipment, resulting in frequent breakdowns and electricity supply interruptions, which at times can last a few days.
We trust that the complaints over outdated equipment from apartheid days can be brought to an end and that we can be provided with the right electricity supply system and maintenance that we expect should be provided.
My task is to address the issues of licences and registration, and I will now do so. The regulator will be empowered to set out forums consisting of customers, end users, to advice it on matters affecting them. The regulator may require a licensee to establish and fund a customer and consumer forum in the manner set out in the licence held by such a person.
With regard to electricity licences and registration, the Bill provides, that firstly, no person may, without a licence issued by the regulator in accordance with this Act, operate any generation, transmission or distribution facility, import or export any electricity, or be involved in trading. Secondly, notwithstanding subsection (1), a person involved in an activity specified in Schedule 2 need not apply for a licence issued by the regulator.
Thirdly, nothing in this Act precludes a potential licensee from discussing the contemplated construction or operation of generation, transmission and distribution facilities, the import or export of electricity, prior to filing a licence application with the regulator. Fourthly, no request for further information, notification or discussions referred to in subsection (3) may be construed in any way as conferring any right or expectation on an applicant.
With regard to certain activities not licensed, the Minister may, after consultation with the regulator, determine by notice in the Gazette that any activity contemplated in section 8(1) need no longer be a licensed activity from the date set out in such notice.
The Minister may, after consultation with the regulator, determine by notice in the Gazette that any person involved in an activity relating to trading or the generation, transmission or distribution of electricity that does not require licensing in terms of section 8 must register with the regulator. The regulator may make registration subject to adherence to this Act.
Any person who has to hold a licence in terms of section 8 must apply to the regulator on a prescribed form and pay the prescribed application fee. Any application contemplated in subsection (1) must include the required description of the applicant; documentary evidence of the suitability of the applicant; a description of the proposed installation description of the customer to be served; the plans and the ability of the applicant to comply with applicable labour, health and other regulations; and evidence in compliance with any relevant integrated energy plan.
When an application is made for a licence, the regulator may require that the applicant publish a notice of such application, which must carry the specified information and run for a specified time in a publication that may be prescribed.
The regulator must furnish the applicant with all the relevant information so that the application can be properly filed, including objections to the applicant. The regulator must decide on an application in the prescribed manner within 120 days. The regulator must provide the applicant with a copy of its decision.
The regulator may make any licence subject to conditions relating to the licensee and its customers; the furnishing of such documents as the regulation may require; the period of validity of the licence; the setting of approval of charges, rates and tariff charges to customers; the quality of electricity, termination of electricity supply to customers and other such specified conditions as well as tariff principles in section 16. The regulator may revoke a licence on application by a licensee. Under certain conditions, the regulator may require 12 months’ notice in writing.
If it is alleged that the licensee has contravened or failed to comply with a licence condition, the regulator may sit as a tribunal with other parties to decide on the allegation and action to be taken. The regulator may appeal to the High Court to suspend or revoke a licence. At the end of the licence period, the licensee may apply for a new licence.
In any civil proceedings against a licensee arising out of damage or injury caused by induction or electrolysis or in any other manner by means of electricity generated, transmitted or distributed by a licensee, such damage or injury is deemed to have been the negligence of the licensee, unless there is credible evidence to the contrary.
The state may, under certain conditions, expropriate land to facilitate the achievement of the objectives of this Act. I thank you, Chairperson. [Applause.]
The MINISTER OF MINERALS AND ENERGY: Chairperson, I would like to thank all the hon members for supporting this legislation and would like to assure the hon member Schmidt that there is absolutely no confusion around the establishment of the regional electricity distributors. The process of the establishment of the REDs is on track. Cabinet has approved the establishment of six municipal REDs and one national RED, and that is what we are implementing.
Regarding hon member Lucas and his concern, I think the concern is valid and it is noted. I think it’s important to say that the reticulation of electricity is an area that belongs to the municipalities in terms of the Constitution and that is why it was necessary that we split the Bill and that that issue be dealt with in terms of section 76. We are hoping that with the assistance of Parliament we will be able to bring that piece of legislation back onto the agenda of Parliament, because we would like to see that Bill passed as well.
In respect of the issues raised by hon member Cupido regarding the concern about quality of service and whether that should be guaranteed, I thought I had addressed that fully in my speech. Thank you, Chairperson. [Applause.]
Debate concluded.
Bill read a second time.
CONSIDERATION OF REQUEST FOR APPROVAL BY PARLIAMENT OF ACCESSION OF SOUTH AFRICA’S MEMBERSHIP OF THE INTERNATIONAL CENTRE FOR SCIENTIFIC AND TECHNICAL INFORMATION (ICSTI)
Mr E N N NGCOBO: Madam Chair, hon Ministers and hon Deputy Ministers, hon members, I stand here before this House on behalf of the Portfolio Committee on Science and Technology to present to you and to seek your approval of the request for South Africa’s membership of the International Centre for Scientific and Technical Information, which I shall call “ICSTI”, so that I do not keep on repeating the full name.
Briefly, the International Centre for Scientific and Technical Information (ICSTI) was established in February 1969 with the objective of providing information and analytical and consultative support services to its members to advance international co-operation in science and technology. The organisation has 18 members, mainly from Eastern Europe.
The main activities of ICSTI are in the areas of information networks, information technologies and databases. The activities are, for example, focused on development of new advanced information technologies, especially network technologies and database services. ICSTI is also developing an integrated information network for member states to exchange science and technology-related information resources, products and services.
Another area of activity of ICSTI is information and analytical projects. Activities are focused upon the processing of scientific and technical information within the context of specific market studies and analyses. The objective is to provide optimal information support through accessing and analysing global information sources for member states who work on the development of new technologies.
Other activities on science, innovation and technology policy are undertaken to assist member countries in the commercialisation of research results through policy analysis, for example related to intellectual property and market access. Priority objectives are to support small and medium enterprises, the promotion of trade co-operation between member states, and technology and high-technology products.
What are the benefits? One of the benefits of ICSTI participation is that the Department of Science and Technology is pursuing the development of an international technology and information platform as a priority objective in order to enhance South Africa’s strategic international technology and information collection, analysis and dissemination capabilities. The latter capacities are critical support requirements for optimal engagement in international science and technology co-operation activities.
South Africa’s participation in ICSTI activities will significantly enhance counter-strategic international technology and information capacities. Although ICSTI is an independent and international organisation, its close relationship with the Russian Federation will also provide further impact to the strengthening of South Africa’s science and technology partnership with that country.
There are many strategic benefits to be leveraged from a strengthened science and technology partnership between South Africa and the Russian Federation, as well as many other ICSTI member states. South Africa’s participation in ICSTI activities will significantly benefit the strengthening of these relations.
As regards funding and the constitutional implications of this agreement, ICSTI has an annual membership fee of only about 1 500 US dollars. Countries must, however, fund their own costs incurred in participating in ICSTI activities. The procedures for South Africa to join ICSTI are governed by section 231(2) of the Constitution, since joining the organisation has financial implications.
The member countries established ICSTI under the agreement on the establishment of the International Centre for Scientific and Technical Information concluded in 1969. In order to join ICSTI, South Africa must accede to this agreement. In terms of the ICSTI statute accession is effected through a formal written communication by the applicant government to the ICSTI director requesting membership.
All ICSTI member states must assent unanimously to a new country joining. This process will be effected once parliamentary approval for South Africa’s membership of ICSTI is obtained in terms of section 231(2) of the Constitution. Please also refer to the advice of the Chief State Law Adviser, which confirms that none of the provisions in the ICSTI agreement and statute are in conflict with the domestic law of South Africa.
Therefore, as we stand here as a committee today, we have to understand that at the dawn of the 21st century scientific knowledge plays an essential role in our everyday lives. Scientific knowledge is not only the result of scientific endeavour and human curiosity, but it is also a powerful means of understanding human nature, society and the natural world on which we depend.
In the past the main role of science has been the production of new knowledge in order to satisfy the inherent curiosity of the human mind. Most recently scientific advancement has become the main driver for development in society. Because of this, there are real opportunities for science to make a significant contribution to sustainable livelihood and the development of humankind.
In spite of its spectacular development and new opportunities, scientific pursuit of knowledge in the 21st century faces wavering confidence, unforeseen dilemmas, unexpected challenges and brand-new questions. These problems can be solved only if the main producers and users of knowledge are able to reach common ground for the new roles of knowledge and science in today’s global society. Globalising the science system is therefore at the centre of progress.
For these reasons the portfolio committee seeks the approval for this agreement from the House. Thank you. [Applause.]
There was no debate.
Mr C M LOWE: Madam Deputy Chair, I would like to indicate that the DA will be supporting the request. [Applause.]
The CHIEF WHIP OF THE MAJORITY PARTY: Deputy Chair, surely after such a scientific exposition they have no choice! [Laughter.]
Accession of South Africa’s Membership of the International Centre for Scientific and Technical Information (ICSTI), approved.
The House adjourned at 21:12. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
MONDAY, 14 NOVEMBER 2005
ANNOUNCEMENTS:
National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Classification of Bills by Joint Tagging Mechanism (JTM)
(1) The JTM on 11 November 2005 in terms of Joint Rule 160(3),
classified the following Bill as a section 75 Bill:
(i) Revenue Laws Second Amendment Bill [B 41 – 2005] (National
Assembly – sec 75)
(2) The JTM on 10 November 2005 in terms of Joint Rule 160(4),
classified the following Bill as a section 76 Bill:
(i) National Land Transport Transition Amendment Bill [B 38 –
2005] (National Assembly – sec 76)
(3) The JTM on 14 November 2005 in terms of Joint Rule 160(6),
classified the following Bill as a section 77 (money) Bill:
(i) Revenue Laws Amendment Bill [B 40 – 2005] (National
Assembly – sec 77)
COMMITTEE REPORTS:
National Assembly
- Report of Joint Budget Committee on the Medium Term Budget Policy Statement (MTBPS) 2005, dated 11 November 2005:
Introduction
South Africa’s growth strategy aims to modernise the economy and improve its competitiveness, while broadening participation and enhancing social inclusion. The 2005 Medium Term Budget Policy Statement addresses these goals, outlining the expenditure plans and policy aims of national departments and provincial governments. (Foreword, MYBPS 2005).
The Joint Budget Committee reports as follows:
The Minister of Finance, the Honourable Trevor Manuel, tabled the Medium Term Budget Policy Statement (MTBPS) before Parliament on 25 October 2005. Sitting as the Joint Budget Committee, the Portfolio and Select Committees on Finance were briefed on the MTBPS by the Minister of Finance and the Director-General of the National Treasury.
The Joint Budget Committee also heard submissions from selected economists, National Departments, non-profit and research organisations from 27 October to 02 November 2005 under the following themes:
• Rural Development and Urban Renewal
• Justice and Protection Services.
• Employment and Economic Growth.
• Social Services.
• International Trade.
The report is divided into broad sections. Section 1 outlines the presentation of the National Treasury, as well as submissions of economists on the MTBPS. Section 2 outlines submissions of departments and other organisations on the MTBPS. Section 3 lists the general concerns and recommendations of the Joint Budget Committee on the MTBPS.
Joint Budget Committee Mandate
The Committee’s mandate regarding the MTBPS requires it to consider the distribution of available expenditure against government policy priorities. This mandate is separate from that of the Portfolio and Select Committees on Finance, which respectively deliberate on the macro-economic, fiscal and intergovernmental aspects of the MTBPS.
The Committee has interpreted its mandate to mean that it should consider the following:
• The likely impact of expenditure allocations in the MTBPS on the effectiveness and efficiency with which departments can respond to government’s stated policy priorities, • Whether departments are making the tough choices required, tailoring their planned expenditures to priorities, choosing effective strategies and seeking efficiency in implementation.
The hearings aim at addressing these issues, and preparing the Committee and Parliament for its deliberations and vote on the Budget itself.
- Briefing by National Treasury
The Minister of Finance, the Deputy Minister and the Director General of Treasury briefed the Committee. The Minister opened with the statement that “No country can grow only on the basis of their Macro-economic policy, but no country can grow without it.”
The key themes of the 2005 Medium-term Budget Policy Statement (MTBPS) were targeting of new funding in line with the Accelerated and Shared Growth Initiative (ASGI), while maintaining standing budget priorities. The ASGI prioritises infrastructure development, education and skills and second economy interventions, while standing priorities are housing/the built environment, the progressive social security net and developing the capacity of the state. The growth forecast was strongly positive despite a high current account deficit and oil price pressures, and inflation is expected to stay within the target band. Fiscal expansion continued, growing by R78 billion or 6.3%, due to a strong economic performance and there were significant increases in allocations for each sphere of government. Public sector capital formation increases, while debt service costs continue to decline.
Additional allocations and conditional grants over the MTEF period include” • R20 billion for investment in the built environment – housing, community and physical infrastructure; • R12 billion for education, health libraries social grants, cultural institutions and sports participation; • R9 billion for economic services including science and technology and development and industrial policy initiatives; • R7 billion for improved courts, policing and Defence equipment and access to justice services; • R8 billion for improved public administration.
The provincial budget saw R46 billion added, R30 billion to the provincial equitable share, R15 billion added to conditional grants and a further R15 to be spent on the provincial infrastructure grant. The Director General noted that the MTEF includes an allocation of R24 billion to municipalities to compensate for the terminated RSC levies. Local government receives an additional R2 billion over the MTEF period in addition to the RSC replacement.
Investment in human resource development, institutional capacity and skills development in all spheres of government were a major focus of Committee concern. It raised the questions of whether a skills audit been done. The recurring problem of municipal-level capacity and skills deficits, and particularly whether there was sustainable skills transfer by Project Consolidate, came under focus. Underspending by and fiscal dumping on municipalities were also questioned, and why under-performing and underspending departments and institutions continued to be compensated. Concerning the impact of skills deficits on underspending, the Treasury team highlighted poor planning systems as a cause of underspending, not merely poor financial management. The decreased budget deficit reflected limited viable expenditure possibilities, according to Treasury. Quality of proposed expenditure programmes had to be taken into consideration when allocating budget resources. In tracking performance, there needs to be measurement of outcomes for effective oversight, not merely the inputs.
- Economists’ comments
Four economists commented on the MTBPS. All were broadly positive about the direction of fiscal policy, though skills constraints and the effect of the regulatory burden, especially on small business, were common concerns.
Independent economist Noelani King Conradie warned that the current consumer-led boom cannot achieve 6% a year growth unless matched by export- led growth in production capacity. Tax cuts would help create jobs, and she believed that there was enough room in the budget to cut taxes without cutting spending or driving up the deficit. Equally important were steps to make it easier, simpler and cheaper to do business in South Africa, and introducing more innovative and generous incentives to stimulate small business.
Nazeema Moola of Merrill Lynch agreed that the regulatory burden on business should be lifted to stimulate business development. While the infrastructure development programme envisaged by government would encourage some small business development, more could be done to help small business by lowering company taxes and deregulating the labour market.
Riefdah Ajam of the Federation of Unions of SA said the Reserve Bank’s recent inflation projections were too negative. She believed inflation would peak in February 2006 at about 5.5 percent as oil prices moved down to about $50 (R338.50) a barrel and telecommunications costs continued to fall.
Cecil Mlatsheni of UCT focused on youth unemployment, and measures required to bring it down. Skills training initiatives have limits, given a lack of aggregate labour market demand. However, lack of skills in turn limits growth. Schooling efficacy is a major cause of concern and FET colleges an important intervention, but more information on the effect of education mechanisms on growth and employment is required.
- Theme 1: Rural Development and Urban Renewal Thursday 27 October 2005
Recurring issues of local and departmental capacity, and effectiveness of coordination between government institutions, were key areas of Committee inquiry under this theme.
The Department of Provincial and Local Government The DPLG briefed the committee on the Integrated Sustainable Rural Development Programme (ISRDP) and the Urban Renewal Programme (URP), noting that their main focus was on the second economy. Rural and urban Nodal areas were defined and identified. Both these programmes of the department were said to be at the centre of fighting poverty and underdevelopment, and building economic growth in communities. The department stated that currently the nodal areas were growing at 1,8 % per annum, and that it had already begun mainstreaming programmes of Project Consolidate in nodal areas. There had been economic profiling of the nodal areas in order to structure economic programmes for them. In conclusion, the department added that their priority areas and programmes were concurrent/consistent with the current MTBPS.
The department agreed with the Committee that co-operation between the DPLG, Treasury and DBSA was of importance. In response to a query about a skills audit, the department noted that its capacity to identify specific needs requires to be addressed. The department added that there were systems being put in place to measure success or the extent of Project Consolidate
The Department of Water Affairs and Forestry The department stressed the importance of its three core programmes; water resource management, water services, and forestry, noting that its business was to address social, economic and environmental problems, as well as managing the economic assets of water resources, and forestry. The department presentation concluded by noting that their core principles were in line with the MTBPS, and in terms of issues of improving quality of life. The department also added that it had limited financial inputs for water for economic growth and development.
The Committee enquired about the recent typhoid outbreak and moves to prevent another such occurrence, and the DWAF replied that it had established a task team. On the Limpopo drought crisis, the department had done projects to build dams and that 6 dams have been completed. A feasibility study was currently under way for building a dam in Tzaneen. There was also a plan to look at sourcing water from elsewhere, and one such place identified was Gauteng. The department also noted that its water crisis could not be looked at in isolation to the other two countries (Zimbabwe and Mozambique) with which it worked and used water.
The National African Farmer’s Union NAFU started by stating the challenges that it faced, which were the absolute levels of spending in agriculture, and also the cumbersome and slow government programmes. However, it noted that the share of money to agriculture had in fact increased. Weaknesses highlighted were slow processes and limited finance. It recommended that government review its funding, and address the problem of lack of clarity as to AgriBEE programmes. The organisation urged that the department stop creating complex solutions to simple problems. Lastly, the organisation noted the lack of access of black farmers as of major concern.
Members engaged with the issue of NAFU members being unable to access relief funds, and asked about issues of profitability and market access of emerging farmers. NAFU proposed one-stop shops so that people could access these programmes at a less cost. However, NAFU raised the issue of Agriculture Department officials managing members’ farms on their behalf. Its also stressed the need for government to coordinate service to the people, noting that while the budget was adequate, the manner in which delivery of services was coordinated limited delivery, which resulted in the need for more funds. A Department of Agriculture official then added that it was essential that its stop creating new structures to solve problems. She said that structures were in place and needed to be used. In terms of NAFU’s recommendation that implementation be driven by communities, she was concerned about issues of accountability, and capacity.
The Department of Agriculture The presentation was short, and the department was asked not to continue with the presentation, as it did not address the issues in relation to the MTBPS.
Members wanted to know what measures had been put in place to address the issues raised by NAFU and wanted clarity on the weakness of delivery. Land Use Management coordination within district municipalities was raised. The Committee enquired how many beneficiaries requesting assistance from MAFISA received it, and in terms of underspending on CASP, one member wanted to know if a performance audit had been conducted in order to assess the impact of MAFISA on intended beneficiaries
The department noted that it was working together with the Department of Land Affairs. Its then noted that MAFISA was launched in 3 nodal areas, and in terms of progress, its said that its were currently screening applications. In relation to the criteria used to determine allocation of funds to provinces for CASP, the department said that it considers the number of land in province to the number of land already distributed. On the issue of land use and the coordination of municipalities, the department said that it was working closely with municipalities and that municipalities were encouraged to identify land that could be used for agricultural purposes.
The Department of Land Affairs The Department noted that with a cumulative 1.827 million hectares already redistributed, against the 2014 target of 25 million hectares, there was cause for concern, and this was one of the main reasons for the recent land summit.
In response to a Committee question on meeting the 2008 objective of settling all land claims, the department noted that performance was not that good and that there were many challenges. The challenges ranged from a lack of financial management skills to the fact that its were now dealing with rural land claims, which were more complex. In terms of state land being distributed, the department noted that state land was negligible and that its were dealing with capacity issues. About funding for land reform, the department said focus on the medium term would be on restitution and that more money for land reform will be made available through the medium term.
One member requested a follow-up on the Spatial Development Framework, and wanted to know what measures were in place to ensure compliance by the municipalities. Capacity constraints were given as the reason.
- Theme 2 (Security and Justice) 31 October 2005
The Committee was concerned about coordination and communication within the cluster, and following up on issues raised in the 2004 MTBPS hearings.
The Department of Safety and Security The Department noted that the SAPS operational priorities are in line with the MTBPS, as well as those of the Justice, Crime Prevention and Security Cluster. Additional funding enables capital expenditure on facilities and capacity building for border control, additional personnel and the revised reservist system to take over the SANDF commandos.
The department responded to Committee enquiry that all spending priorities identified in the previous year had been achieved. In relation to Scarce Skills Indicators, the department confirmed that it had developed a model, and that the process was currently being refined. The department stated that reduction in crime by 3, 4, and 5% in the past few years was an indication of the seriousness with which its officers took crime. To address crime prevention the department noted that it was important to co- operate with other clusters. On the above point the department added that it was working with other clusters, in such programmes as the Nodes, Project Consolidate, and the Urban and Rural Renewal programme.
Questioned about Commandos, and regarding the relationship between the SAPS and the SANDF, the department noted that there was equipment that was being transferred to the SAPS from the SANDF.
The Committee enquired about vehicle management; the department responded saying that its did make provision for vehicles per annum, and that the vehicle fleet grew by 3000-4000 units/year. The department added that this process also included replacement. In terms of resourcing, the department noted that it needed to sustain these vehicles. When looking at the vehicle (process) model, the department felt that its model was sufficient.
The Committee recommended that current priorities be linked with last year’s, and stressed the importance of integration and the need for greater co-operation within the cluster. The department took note of this and added that maybe there needed to be greater involved of the other units in its cluster, in this budget hearing.
The Department of Defence The department outlined its budget history since 1994 and set out its nine priorities for the 2006 MTEF. Key areas are equipment modernisation; military skills development; information and communication systems; Defence infrastructure and ARV rollout.
The committee wanted to know whether the department’s concern, raised in last year’s presentation, about expectations that were not reflected in the MTEF, notably peacekeeping, had been addressed. The department replied that last years presentation was still an ongoing issue, and that the National Treasury was indeed helping them. The funds allocated the department noted as being insufficient, and was considering topping-up the allocation from its internal budget
On bad conditions in military hospitals, the department noted that maintenance was the key and that it was working with Public Works and that there was progress. In terms of personnel in Burundi, the department said that it could not scale-down on personnel due to elections. The department submitted that there were a total of 1287 members currently deployed in that operation.
On the issue of land restitution, which the department addressed in its presentation, the Committee wanted to know why this matter was not transferred to Land Affairs, as it concerned state land. He also noted that department had said last year that Treasury had approved partial funding for some of its initiatives and wanted to know how much this partial funding was.
On the issue of land restitution, the department noted that it was in constant communication with Land Affairs, and that its had gone before the Land Affairs Portfolio Committee. In terms of other funding to address shortfalls, the department said that it had a total of R821 million, R500 million from the budget, R300 million from internal budget, and R21 from external funding, which would be used for deployment. The department said that there was a shortfall in the amount that it had requested in the previous year. The priorities that the department stated were still in the process of being processed, according to the department
The Committee was concerned about the R1 million which the department had underspent, and the way departments pleaded poverty, yet were underspending. The Committee said that departments had to be monitored carefully during the move to the end of the financial year. On the issue of Land Restitution, the Committee proposed that the department be given 6 months to sort out and hand over this issue to Land Affairs, and focus on Defence issues. The proposal was accepted.
The Department of Correctional Services In terms of the MTEF allocations, the department provided additional funding to its Information and Communication Technology programme. The budget allocation saw an increase of 10,2% from the 2005 to 2006. For its spending proposals, the department mentioned its ‘Centre of Excellence’ initiative. The department also signed a contract with an employment agency to assist in its recruitment drive. The department noted that it needed 8000 additional personnel to kick-start its 7-day establishment initiative by March 2007. It argued that it contributed to job creation, to the second economy and to the African agenda, but faced challenges regarding anti- corruption measures, overcrowding and detention of children
The Committee’s concern was again the lack of integration within the cluster. He noted that the department had stated in the previous year that the MTBPS favoured other departments in the cluster and wanted to know what the department had done to address this. The next question was on the financial implications of a 7-day week, whether this initiative had been costed, whether it was more economical than a 5-day week with overtime. Members put a series of additional questions.
On the issue of recruitment numbers, the department noted that in terms of its White Paper, costing and planning costs were huge, and that the White Paper was a 20-year vision. On the issue of immediate recruitment, it was added that pay for overtime in the 2002-03 financial was in excess of R200 – R300 million, which showed the overtime system was not affordable. Since the phasing in of the 7-day Establishment there had been direct cost savings, which were being used to increase recruitment and to deal with backlogs. With regard to possible continued corruption despite use of employment agencies, the department noted that it had delegated to 3 agencies since a about 6 million people applied for 1000 posts at a time, making this volume was impractical for the department to deal with. The department did however note that corruption was a possible concern, and that its needed to speak to the agencies in order to monitor what was currently happening.
In relation to the question about its medical aid, the department said that it had a fully funded non-contributory medical aid scheme in place, and like all other state employees, correctional service workers were contributing 1,5%.
On the issue of restructuring salaries, the department said that it was finding it very difficult to restructure salaries/income levels, since salary increases had to be looked at in terms of what work was done by the personnel/correctional service officials. Asked about a possible discrepancy between numbers of personnel the department wanted to recruit, and the number of personnel already recruited, the department noted that its intended to recruit 8000 over the MTEF period, and up to 3000 were being recruited per year. The estimated cost for this initiative over the MTEF was R750 million. In relation to a question on the cost implications of the change from the overtime system, the department could not respond.
The department responded to a question about management of awaiting trial prisoners that this was due to the slow processing and low conviction rates. The department suggested that integrated planning occur between departments. Even with the remissions which were granted earlier this year, only 32 000 awaiting trial prisoners were released, leaving a further 51
- While the department noted that this 51 000 was still in its care, it said that there were initiatives between departments to address this.
One of the initiatives was participation between departments, even at a local level. Another measure was the possible release of prisoners who were granted but could not afford bail of R1000 and less. While the long duration of awaiting trial prisoners was acknowledged as a problem, other contributing factors were mentioned such as, persons being arrested with insufficient evidence.
The difficulty was also said to lie with the judiciary not fully implementing alternatives to sentencing. The department noted that it continued to raise these concerns with the Judiciary, and that there was agreement (in a meeting in September) amongst all departments that there needs to be improvement.
Another measure taken by the department was to put together a proposal, which would be addressed to the government Legkotla next January about the detention of awaiting trial prisoners. In terms of the Inmate Tracking initiative, the department noted that it did encounter problems, and therefore the projects were not fully implemented yet. The department added that a Task Team was established to report on the effectiveness (and cost) of an Inmate Tracking System. The idea of the new correctional service (‘New Generation’) facilities was to have smaller units of no more than 60 offenders grouped by age and programmes etc. In terms of their design, consultation was done with Public Works, in order to ensure that these facilities would be escape-proof. The department said that it was in the process of getting tender bids, which was done with Public Works. It became apparent that the bidders had very high prices, and almost doubled what the department had budgeted for. The department had then submitted the bid offers to an independent quantity surveyor, and will reconsider alternatives once the quantity surveyor’s report is available. The process would also be put on hold until then. In terms of the 2 private prisons, the department noted that an investigation was done of the two contracts, and that the department was advised that there was no value for money in these two initiatives. The department added that this was realised after it had already signed the contracts. What the department said it would and could still negotiate was the money in terms of insurance, as cost of buying out of the contract was too high. In response to the question of capital underspending, the department said that it was due to the delay of building.
The Department of Justice and Constitutional Development The department identified capacity building, and especially prosecutorial capacity building, in leading to reduction in awaiting trial prisoners. The department acknowledged underspending in some respects, and mentioned that it was addressing the capital budget underspending as well.
The department’s report was commended for taking into consideration the cluster approach. On the issue of capital underspending, the Committee urged that something be done. Referring back to the department’s presentation from the previous year, the Committee noted that the department had said that it would increase access to the justice system for all, particularly vulnerable groups. On this issue the Committee wanted to know how far the department was in terms of dealing with these issues.
Questioned about underspending on capital items, the department responded that it was also concerned. However, by dealing with issues of personnel, it was dealing with infrastructural capacity, and that its were filling posts. In terms of improving access and building infrastructure, the department said that courts had been built. Responding to concern about lack of financial statements, the department said it was undertaking an advertising bid for a consortium to handle money and trust funds.
In terms of personnel expenditure, the department noted that there were areas with insufficient personnel, and a process was being embraced that separated judicial and administrative functions so that judicial officers could perform only those functions directly relating to their jobs, which the department believes will increase efficiency. The department highlighted the commitment made by Treasury to assist it by increasing the number of police and prosecutors.
About the current status of awaiting trial prisoners and diversion alternatives, the department said that its were addressing and exploring mediation and arbitration alternatives, and increasing the capacity of advocates. The department also said that it was working on improving court efficiency by working on details for the rollout of their Reagoboso programme. In terms of providing access and service to vulnerable groups, the department said it had already rolled out secure-care facilities in some provinces, and that these would be rolled out in the others.
The department noted that there was improvement in the dealing with sexual offences but that there still needed to be further strengthening of capacity. In its interaction with Public Works the department noted that there was still room for improvement, and that as soon as its were able to address their infrastructural issues its would be better able to interact with Public Works.
Institute for Security Studies
The ISS made a written submission. It viewed the MTBPS positively, and endorses the emphasis of government on the need to find an appropriate balance between personnel numbers and salary levels, and between support and front-line delivery staff in the Defense sector. It supports South Africa’s growing role in African peacekeeping, but is concerned about the reduction of landward defense, and urges the SA Army’s need for modernization of main equipment.
The ISS welcomed the paid reservist system for the SAPS, but again urges reconsideration of the phasing out of the territorial reserve, arguing for its role in coping with natural disasters, as well as its rear area protection role.
- Theme 3: Employment and Economic Growth (MTBPS Hearings) 01 November 2005
The Committee inquired in some detail into the performance of departments, and was concerned when presentations did not address the Committee’s mandate, and when issues raised in 2004 were not dealt with.
Department of Transport Transport services and infrastructure are the veins and arteries of economic growth, according to the Department of Transport. The department stated that in terms of its priorities, it aimed to with economic growth and job creation, and bridging the gap between the first and second economies.
Also as a department it stated that it wanted to improve access to public transport, starting with rail, which carries 2,2, million passengers daily. There has been a 31,9% growth in rail passengers, and that the ‘Gautrain’ would be integrated with the existing rail network. The department mentioned that 58 contracts had already been awarded for bus subsidies and that R7 billion would be spent on the taxi recapitilisation process. Some 100,000 taxis would be recapitalised and at a cost of R50 000 each. This R7 billion was said to include that training of traffic officers. The conversion of taxi permits to route based licenses was seen as a way to reduce inter-taxi association conflict. The department stated that Eastern and Western corridors would be rolled out at all the provinces. The department noted that the restructuring of the Road accident Fund was underway. SANRA was aid to have taken over provincial roads. In preparation for the 2010 World Cup the department noted that an additional R241,7 million had been allocated to the department in adjusted allocations, and an additional R3,5 million was allocated for infrastructure. For rural transport, the department noted that R90 million was allocated, which the department, amongst other things, was going to use for the rollout of bicycles in rural areas.
The Committee was concerned about the 25% rise in vehicle purchase (car sales), which was causing huge congestion in national road networks, infrastructure, and maintenance. Underspending in provinces was also a concern. On the issue of the 2010 World Cup, the member wanted to know how sure the department was that its programmes would be done by 2010.
Responding to a question on bus subsidies, the department stated that in all countries, public transport was subsidised, and that this was value for money reduced the cost of public transport to commuters. The department also noted that subsidies to smaller vehicles would drive subsidies to second economy.
On the issue of conversion of taxi permits to operating licenses, the deadline remained and taxis were expected to comply. Those taxi drivers who did not meet the deadline would not be included in the taxi recapitalisation process. The department confirmed that its 2010 programmes would be finished on time. On the ‘Gautrain’ though, the department was not sure that the project would meet the deadline. It noted that the national government would be assisting the provincial government.
On Basic Management Plans, the department noted that it was still rolling out bicycles. The department also acknowledged the issue of bad roads, and the need to provide infrastructure and said that its was providing alternatives. One option that was being considered was that of animal drawn carts. On access to public transport, the department admitted that it was facing difficulties: not all public transport was being subsidised, and that there were fiscal constraints. The department hoped that taxi recapitalisation would help in this regard. The department said that it was aware of the rollover of R30,9 million and said that a number of factors contributed to this.
On the issue of train accidents, the department mentioned that it had set up a railway safety regulator to investigate the causes of the accidents and to devise safety regulations. Rail infrastructure would be upgraded also. On taxi recapitalisation, the department said that R250 million was allocated although not one single taxi had been recapitalised. The department reassured members that systems were in place, and that agreements have been concluded with manufacturers in this regard. The department said that the manufacturers would only be able to provide vehicles from June 2006, and that the department was still helping provinces prepare for recapitalisation. On the issue of Limpopo being unable to provide license renewal notices, the department said that the province’s problems were due to administrative shortfalls, which fell outside of the national department’s operations.
Department of Housing The department emphasized that housing development is one of the most important economic indicators in South Africa, and the NdoH is the most important constructor of residential property, producing on average 200,000 subsidised housing units, worth R4,5 billion, and 40,000 in the private sector per annum. Labour intensive housing programmes create jobs and investment opportunities, while the department prioritises women and youth empowerment.
Concerning issues raised in 2004, the Committee wanted to know what had been done to ensure effective monitoring of fund transfers to the provinces. The department had responded in the previous year that there was limited monitoring. In line with the Human Settlement Strategy, the Committee wanted to know what the department had done to ensure interaction between all relevant government departments and regarding accreditation to municipalities, in terms of capacity issues.
The department responded that there had been discussions but no conclusions in terms of integration and alignment of resources with other departments. On the issue of accreditation of municipalities, a framework had been developed and finalised by MinMec, but at the end of the day it is the provinces that drive accreditation. On this the department also noted that that the MinMec and SALGA came to an agreement as to housing delivery. The Housing Sector Plan in the IDP was also said to assist with planning and getting information from communities to help the department plan and respond appropriately.
On the issue of unfinished or blocked projects, the department said that MinMec was working on the unblocking of projects, and that guidelines would be provided to emphasise that those who are accountable should account. With regards to the monitoring function, the department stated that a Chief directorate was in place and was efficiently capacitated. On the question of the previous year’s prioritisation, the department said that it was in interaction with other departments. It had noted the importance of capacity building, and had established a unit and directorate in this regard. Unintended consequences were those of the constant influx of people from rural to urban areas in search of jobs. The department said that it had now recognised the need to consider quality. For this department added that it had a rectification process in place, which was designed to improve poorly built houses.
Questioned about unfinished or blocked housing projects, the department said that MinMec was working on unblocking of projects, and that guidelines would be provided. These would emphasise that those who are accountable should account. With regards to monitoring of performance of housing institutions, the department stated that a chief directorate was in place for this purpose, and was efficiently capacitated. It also noted that that MinMec and SALGA came to an agreement as to housing delivery. The Housing Sector Plan in the IDP was in place to assist with planning and getting information from communities to help Housing plan and respond appropriately.
Questioned about the exact number of houses built, the department said that it was not sure and that some of these houses included in this number may still be under construction. Whether under construction meant already transferred, the department said that it did not know. On the issue of monitoring, the department said that it was dealing with this. The department said that it was aware of the local authorities’ lack of capacity and that its were taking this into account. On the issue of rural housing the department said that policy was being formulated and that its hoped that its would have a rural housing policy. On the issue of bursaries the department said that it was in constant contact with the universities in Gauteng, the Western Cape and KZN.
At the end of the presentation the Committee gave the department 7 days in which to provide a proper indication of how many houses had been built in each province.
Department of Public Works The department’s presentation summarised highlights from the MTBPS.
The Committee enquired whether the department had considered the MTEF before its came to this hearing. The Committee wanted to know what interaction the department had with business and other government departments and asked how the department intended to deal with the obstacles to service delivery in some provinces.
The Committee also questioned the department about its devolving budgets, including service budgets, to clients. The department explained that the responsibility of paying for services had been with Public Works for all government departments, but because this led to inefficient or wasteful use of services, responsibility for paying for services is now devolved to departments and provinces in the hope of assigning more responsibility in the use of services. Also by devolving budgets to client departments via service agreements, the department argued that this gave the client department the option of choosing another agency should it feel the department of Public Works was not performing well.
The department noted that there was a general concern about its performance across the board, and added that there needed to be greater co-operation and joint planning between Public Works, Health, and Education. The department added that unless it improved its service, other departments would lose faith in it. When building, the department noted that it dealt with the department concerned but not with public, which could be problematic if department had not fully considered the public in its planning.
The department was also asked whether it would not be useful to create its MTIP (medium term infrastructure plan) sooner. It responded that there was still on-going discussion on the MTIP, and that it was not finalised yet.
Department of Communications The department noted that its priorities and programmes directly affected the second economy. These priorities are Sentech’s infrastructure investments, the SA Post Office network expansion, rollout of regional television broadcasting services, strengthening of ICASA, uncapping the Universal Services Fund, operationalising the Meraka Institute and restructuring itself.
The Committee posed a number of questions regarding institutions. The department noted that it had been following up issues of SAPO providing social grants. The department noted that R750 million was allocated to the SAPO in 2003. On the question of the department requesting more funding yet underspending, the department said that the money underspent was committed. The department said that it was fighting underspending by aligning its planning and implementation processes, and hoped to reduce it. The department noted that the issue of compliance to ICASA was important and that in terms of new legislation, the plan would be to register licenses speedily, and for this ICASA would require more money.
On costly telephony in rural areas, the department suggested that wireless technology was the way forward, and that its did note the challenges when it came to the rural areas. The department said that it had been speaking to SALGA, and had noted that in district municipalities’ concern was more for things such as water and housing provision and not for communication. There was a ‘battle between food and telephones’ meaning that people did not see a direct gain in such communication technologies. The department also acknowledged that there was potential for link up between departments. On the issue of huge spending towards the end of the financial year, the department said that it was on target with its spending.
FEDUSA Presentation The Federated Unions of South Africa (FEDUSA) focused on employment and skills issues in its presentation. A major constraint noted was the lack of skills in the public sector. The organisation suggested that public sector salaries be addressed and professions such as teaching and city planning be promoted. There should be more spending on infrastructure programmes in order to enhance the ability to deliver and business should be brought on board. FEDUSA added that Public Works programmes needed to reconsider their wages and allow for sustainability of people. It also proposed more spending on child and old age grants better salaries for police, nurses, and doctors etc.
With regard to SETAs, when asked about FEDUSA’s contribution to skills development, FEDUSA said that it was undertaking initiatives, such as learnerships, together with SETAs and National Boards, and had an input into other sectors as well. On the issue of Public Works wages, FEDUSA noted that there was some progress but found that people were using up their wages just to get to work.
Business Unity South Africa (BUSA) BUSA endorsed the target of a 6% growth rate, and emphasised the importance of enterprise development in attaining this. Small and Medium Enterprises in particular should be encouraged, especially by cutting red tape. In ascending order, regulatory burdens were RSC levies and SETA levies; PAYE and UIF deductions; SARS tax administration; labour laws; CCMA cases; bargaining councils; and VAT. BUSA urges adoption of a regulatory impact assessment strategy by government. It noted that although the broad outlook is optimistic, local level partnerships are required for service delivery, as well as increased savings and foreign direct investment.
Asked about the issue of CEOs’ pay and accountability, BUSA added that CEOs were accountable to shareholders and board members. Concerning skills deficits, BUSA said that there was not enough skilled decision-making. Price-setting too had to be looked at in context as a percentage of investment. When considering the ideal corporate tax rate, BUSA suggested that the issue was how South Africa compares with other countries. BUSA noted that there was a case for bringing rates down further. When looking at assistance to small businesses, BUSA said that it was important to look at where the responsibility lies for slow delivery. Its noted that meetings were often held at national level, and asked why there were no meetings at a local level. BUSA noted many gaps and suggested that a joint initiative was needed. BUSA also suggested that the political sphere at the local level have an open door, noting that the local level is not always as open as the provincial and national levels.
6.Theme 4: Social Services (MTBPS Hearings) 02 November 2005
The Committee posed detailed questions about delivery, particularly to rural areas and the poor.
Department of Home Affairs Presentation The department is made up of two core services, namely civic service and immigration. In immigration the department hopes to attract scarce skills to the country, in order to contribute to overall economic growth. The department is in alignment with the government’s plan of action, and of the 7 points highlighted in the State of the Nation Address, the department said that its core focus was on number 4; that of enhancement of social security. The department sees itself as playing a fundamental role in the Social Cluster by providing essential documents. On its impact on Social Cluster issues, the department said that it was in partnership with other departments in the provision of social services.
The Committee was concerned about the department’s budget adequacy to serve rural areas, especially with identity documents, The Committee noted that the department underspent by R388 million in the previous year and therefore wanted to know how the department would ensure that this year’s budget would be spent. Another question was raised on the issue of scarce skills and what a he department was planning on doing about South Africans living abroad that had these relevant skills.
Concerning the adequacy of its budget for identity document campaigns in rural areas, the department responded that the expenditure trend in the department had been low, as it was mainly allocated to capital/IT related programmes, which were important for service provision. But now the department said that it was looking to the future and servicing of rural areas, and mobile units activities will be extended to December.
It was important to enhance human capital through staff recruitment rather than merely requesting additional resources. On the question of underspending, the department noted that it was currently standing at 41% expenditure of this current budget. In comparison to the previous year’s expenditure of 34% by September, the department felt that it was doing well. It was also noted that there were currently on-going projects, which would be receiving further funding in the next 6 months. On facilitation of recruitment of South Africans in other countries, the department said that this was a catch 22, in that it could not do much about those who were not patriotic, and could not force people to move back. The department noted that through the Immigration Act, its were trying to import scarce skills, and together with the Department of Trade and Industry, its were trying to build those skills capacity within the country.
Questioned about the influx of illegal immigrants, the department said that it did acknowledge this as a challenge and that the BCOCC was created in order to address this problem, and to ensure co-ordination between departments (such as SAPS) to deal with this issue. The department added that it was also involved in deportation, noting that another problem was that of people who come into the country with legitimate documents, and then disappear once in the country. On the issue of capacity building, the department clarified that it was talking about the capacity to fill posts, and strategic capacity, such as IT systems and infrastructure (offices in certain areas). On the issue of utilizing youth structures, the department assured the committee that the department was part of internship programmes, and that some of these interns go on to fill posts in the department. On some initiatives the department interacted with uMsobomvu, who funded the programmes. The challenges of duplicated IDs the department hoped to address with the introduction of the ID smart cards, which it said would be implemented by September of the following year. The problem of children having more than one birth certificate the department said was sometimes due to mothers registering their children more than once. The other problem here is that the department does not take the fingerprints of children, and is therefore unable to trace this.
Department of Social Development The Department’s presentation said that it promotes opportunities for marginalised communities in economic activity to improve the quality of life of the poor. It maintains a progressive social security net, and invests in community services and human development. It significantly improves the capacity and effectiveness of the state by promoting service oriented public administration. Consolidated social development spending grew by 28,8% in the three-year period to 2005/06, and will grow at an annual rate of 11,6% in the coming MTEF. The largest portion spent is on social assistance, which consumes 92% of the total budget.
The Committee raised the issue of eligibility for social grants and skewed allocation. The department responded that there were different grants, the eligibility for which differed. On the issue of delays in processing of grants, the department answered that it had set up agencies to do this: a grant application should ideally take 2 days, but that there were delays, which were mostly caused by the skewed staff to beneficiary ratio, which in some provinces was at 1: 1800. The department acknowledged the fact that it did not have enough staff on the ground level, but said that there were some improvements and that even more were underway. On the question of using the SAPO to distribute social grants, the department said that the SAPO would be the service provider of choice but that it would have to demonstrate that it could provide this service at a cost effective and efficient manner.
Altogether 6,3 million children are at present receiving grants, and for those children whose documents were still being processed, the department said that provision was made for them and its could still obtain grants. Research done showed that a significant number of people were living above the poverty line because of the social grants provision by the department. The department stated that it did have a plan/strategy in place to retain and recruit social workers and is looking at salary issues, and the working conditions of social workers. It is working with the Department of Public Works to ensure an increase in the stipend for volunteers/ care-givers, from R500 to R1000.
Department of Health The department’s key initiatives are upgrading and revitalisation of hospitals, additional funding for medical equipment and information systems, and consolidation of primary health care services under provincial administrations. The Committee commented that in the training of health professionals, the department had to interact with health councils. The issue of accountability of managers was also raised. On this issue, the department stated that there were strategic obstacles and management capacity problems. Clinics in the rural areas face challenges and upgrading them to medical centres was not possible for lack of doctors. This reiterates the Human Resource question yet again. The department said that it was considering a strategy to expand the mid-level workers pool; therefore focusing on increasing the number of pharmacists, medical assistants, and training medical aides for nursing work. It noted that emphasis on numbers might also undervalue quality. As part of its retention strategies for nurses it was looking at reviewing structure of training.
On the issue of training colleges, the department said that most of the tutors for these were by now in the UK, and were discouraged by the fact that its would have to start at the lowest level, as per Nursing Regulations.
The department said that it was on track with its malaria reduction targets. Similarly with the ARV roll out, the department said it was on track. On its competence to do DNA forensic analysis at hospitals, the department said that this was a very specialised field and could not be provided at all hospitals, though it being done in Pretoria. The department is trying to decentralise this to the hospitals in provinces. In the case of suspected rape, especially of children, testing has to be done through the police, who had more competence in this regard.
Department of Education The department summarised the increases to the national baseline, and to the provincial Equitable Share as set out in the MTEF.
Responding to questions, in terms of higher education the department noted that there was a throughput problem, and that the minister contemplated an enrollment planning initiative. On the issue of its difficulty in retaining temporary and substitute teachers, the department agreed that their conditions were unacceptable, and said that some provinces were moving speedily to ensure sure that temporary and substitute teachers were absorbed permanently.
The department noted the importance of FET and technical skills, adding that this was not only a South Africa problem. The department assured the committee that once good FET colleges were set up a considerable improvement would be seen. On the issue of teacher shortages, and especially schools with no mathematics teachers, this was said most probably to be a problem of the management systems, with the School Governing Bodies having the final say on who gets appointed. In relation to the Early Childhood Development, 600 000 children in rural areas were said to be on this programme, and that it was still expanding.
On the issue of no-fees schools, the department said that this would not happen this year, but that no-fees schools would be formally declared by
- It also noted that not all schools would be no-fees schools. On school transport, the department said that this was a provincial competency, although the department acknowledged the challenges. On the issue of safety at schools, the department said that it did have initiatives in place, but also stressed that it encouraged community involvement and participation in this regard.
The People’s Budget The People’s Budget approved the expansionary fiscal policy of the MTBPS, and awaits the Accelerated Shared Growth Initiative to see if increased spending will translate into benefits for the majority of South Africans. Relatively high housing expenditure is good, though current programmes are inefficient and replicated apartheid settlement programmes. There is a concern that Treasury does not review the ARV rollout in the MTBPS. The People’s Budget is concerned about the low budget deficit, and questions expenditure trends within the period of reducing the deficit.
With regard to fiscal discipline, the People’s Budget argued that, compared to other countries, the deficit could have been relaxed more in order to allow for spending. On the issue of expenditure trends, the organisation noted that there were capacity constraints,
SALGA SALGA endorsed the MTBPS measures to boost socio-economic activities and expand social services and income support. It noted that some needs were not addressed, such as the next phase of the National Skills Development Strategy, the expansion of the Child Support Grant and allocations on environmental health services. Clarity is needed on devolution of bus and taxi subsidies to municipalities.
The Committee noted that SALGA raised challenges, and wanted to know whether SALGA had any plans of overcoming these obstacles. SALGA was also asked what it thought about the lack of skills, and whether it thought that the budget would address this issue. SALGA was asked to comment on the issue of skills and the competence of municipal managers in relation to the level of service provided. One member added that SALGA needed to look at training of councilors rather than leaving problem articulation to the community.
SALGA mentioned that even in the apartheid era, skills deficits at the local level were a factor, but that together with the DPLG its were addressing this issue. On the competence of municipal mangers, SALGA noted that a performance contract has now to be signed by these managers, and that there were key performance measures and indicators. SALGA said it was aware of the issues of capacity at local level and also noted that most of the local government service challenges lay in the provision of Housing. On the issue of youth involvement in the IDPs, SALGA mentioned that it had a roll out plan for youth programmes. On the question of child-headed families, SALGA said that there were initiatives in place to help in this regard, such as the provision of food parcels to the children, through the social workers, and that its did have other alternatives.
IDASA IDASA submitted its review of spending in the MTBPS, noting that the redistributionary effects of social spending do show effective targeting towards the poor. Inter-group inequality is falling, but there is a net increase in inequality within groups.
IDASA argues that more spending is possible by increasing the deficit. It reviews infrastructural spending implications and the need to improve effectiveness of public spending. It reviewed the MTBPS in the light of its consideration of HIV/AIDS and the rights of children.
7.Theme 5: International Trade (MTBPS Hearings) 02 November 2005
Department of Trade and Industry The DTI’s presentation focused on its foreign trade interventions. The DTI’s key policy initiatives for the year are the launch of the Angola and DRC strategic development initiatives; preparation for and participation in the African Peer Review mechanism; further development of bilateral relations with key African countries; continue with US FTA negotiations and the launching of China and India negotiations.
The department mentioned that it wanted to build structures for greater regulation and interaction. The department mentioned that the role of the International Trade was to open up markets for South Africa, Although it was noted that South Africa has some competitive advantage, the department mentioned that there were other elements that influenced trade issues; such as import duties in other countries, multi-lateral and bi-lateral barriers. The department said that it was looking at securing preferential agreements through bilateral agreements. The department said that it did not differentiate between FDI and portfolio flows, but that their main focus was on services and trade.
When questioned about the accessibility of the department to rural areas, the department responded that there was an initiative for rolling out to provinces and municipalities, so that products of the department could be made available at municipalities. There was a close co-operation between DTI and local government on the issue. The department also noted the difficulty of accessibility to markets and said that it was looking into it.
Recommendations
The Committee recommends as follows:
- The Committee recommends that Parliament enhance its effectiveness in monitoring the capacity of departments to implement progressive policies.
- The Committee recommends that Parliament pay particular attention over the medium term to the effectiveness of facilitating policies regarding the key MTBPS priorities of human and institutional capacity development and infrastructure investment, as well as the focus on growth, macroeconomic stability, raising the employment capacity of the economy, and reducing the gap between the first and second economies.
- In considering the Budget documentation of key departments such as the Departments of Home Affairs and Social Development, Parliament should satisfy itself that such Departments have monitoring systems in place, ensuring that their implementation supports their policies and that their policies have the required outcomes. This will enable timely policy adjustments.
- The Committee recommends that Parliament strengthen monitoring and oversight of expenditure trends between National MTBPS functional allocations and Provincial budget allocations to the smaller spenders supportive of social and rural development and job creation (i.e. housing, land affairs, tourism and agriculture) to address concerns of adequate financing at provincial level.
- Parliament should explore ways to influence cooperation and complementarity rather than competition between departments, particularly coordination of planning between departments in the same cluster.
- Parliament should follow up on the amendment of strategic plans in order to align them with the MTBPS.
- The Committee should carry out oversight visits, in particular to development nodes.
Report to be considered.
National Assembly
- Report of the Portfolio Committee on Finance on the Revenue Laws Amendment Bill [B 40 – 2005] (National Assembly – sec 77), dated 09 November 2005:
The Portfolio Committee on Finance, having considered the subject of the Revenue Laws Amendment Bill [B 40 – 2005] (National Assembly – sec 77), referred to it, and classified by the Joint Tagging Mechanism as a Money Bill, reports that it has agreed to the Bill.
- Report of the Portfolio Committee on Finance on the Revenue Laws Second Amendment Bill [B 41 – 2005] (National Assembly – sec 75), dated 09 November 2005:
The Portfolio Committee on Finance, having considered the subject of Revenue Laws Second Amendment Bill [B 41 – 2005] (National Assembly – sec 75), referred to it, and classified by the Joint Tagging Mechanism as a section 75 Bill, reports the Bill without amendment.
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Report of the Portfolio Committee on Arts and Culture on the Study Tour to the Northern Cape, dated 8 November 2005:
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THE DELEGATION i) Ms SD Motubatse-Hounkpatin (ANC): Leader of the delegation ii) Mr. MH Matlala ANC iii) Ms ND Mbombo (ANC) iv) Mr. R Sonto (ANC) v) Mr. BZ Zulu (ANC) vi) Ms TR Cawe (Committee Secretary)
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OBJECTIVES OF THE STUDY TOUR
• The Committee intended to meet and interact with the Provincial Committee on Arts and Culture. • To inspect Arts and Culture infrastructure in the province • To interact with organized formations in the sector • To assess the progress made in implementing and celebrating “Living Heritage” three year theme • To assess project of Arts and Culture that are funded by National Lottery • To interact with organizations that are funded by the Department of Arts and Culture and • To meet with municipalities that are doing interesting work on Arts and Culture
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INTRODUCTION
The Chief Whip of the Majority party in the province welcomed the delegation The Chairperson of the Standing Committee on Sport, Arts and Culture, Mr. Galela briefed the delegation. He brought to the attention of the Committee that the overview on Arts and Culture issues will be done by the Head of Department and the MEC of Art and Culture in Upington on the fourth day. He mentioned that the province has managed to complete some of their projects despite the limited budget.
- FINDINGS The Portfolio Committee visited the following places in order to achieve the mission for the visit.
4.1 SOL PLAATJE HOUSE
The Sol Plaatje House was declared a monument in 1992. The McGregor Museum provided the information about the family. They are currently undertaking a research about Plaatje family; The Museums also reserved a room for the Sol Plaatje family tree. The house contains the political voice of the Northern Cape. The house is very useful for the youth in the province as it gives them a clear understanding of some of the people they can associate with.
The ongoing projects based at the house, like the museums displays, reference library and the associated publications, all have the potential to create over time an awareness of the legacies of the indigenous people of the Northern Cape in general and that of Sol Plaatje.
The museum is working in collaboration with Pansalb. With the lottery contribution, they managed to do recording of Setswana stories and proverbs in the villages around Pampierstad by a community based interviewer. They also conducted a research and draft report on the life history of the people of the Richtersveld and, the amaXhosa of Colesburg. They moved around the pre-schools working on work-study in promoting the use and importance of mother tongue. The pre-school teachers were very keen and interested in the intervention of the language usage. They established a steering Committee to deal with developing and promoting the language in the province.
4.1.1 CHALLENGES
The Committee felt that the Sol Plaatje intended projects were too academic because it involved intellectuals and students in Universities and by so doing they neglect the elders who can help them with more information on language and story telling. They also appreciated the library books that were written by local people but suggested that the books can also be distributed to all the provinces.
4.2 McGREGOR MUSEUMS
The McGregor Museums are the owners of the Duggan-Cronin collection and the Duggan-Cronin Foundation. The foundation was established with the specific purpose of working with the museum to raise funds and generally assists with the conservation programme. McGregor Museums is the house that stores more than 4000 copies of negatives that were scanned as part of the restoration process.
The photographic collection dates back to the indigenous people of men working in the mines and living in the compound. Most scholars and historians are using the museums for research purposes. They carry the diversity of all our cultures the most important feature are the picture of the tribal kingdoms around Southern Africa.
The Museums were able to carry their restoration project through Department of Arts and Culture funding and Lottery. The Thandabantu gallery is in the museums to commemorate the life and work of Martin Duggan-Cronin.
4.2.1 CHALLENGES
To be able to restore the work of Duggan-Cronin they need to raise more funds.
4.3 WILLIAM HUMPHREY GALLERY
The gallery is the national museums of art and its primary function is to collect and conserve the artistic heritage of the nation. These collections form part of the national estate, and are exhibited for the enjoyment and education of all who visit the museum.
A number of special community projects are run at the gallery that deal with national initiatives such as poverty alleviation, skills development, job creation and moral regeneration. The Gallery has a partnership with prisoners around Northern Cape with the project on Arts against crime. Prisoners were trained to do beadwork, embroidery and weaving.
The skills taught are in preparation for them when they are released from prison. Some of their work is exhibited in the gallery and some are for sale. The gallery is a house to Sol Plaatje- statue. The management are organizing for the statue to be opened officially by the President. Currently they intend to discuss the details with the Minister of Arts and Culture. The Sol Plaatjie statue was commissioned by the South African Heritage Resources Agency and they intend to put it in the monument.
4.3.1 CHALLENGES
The gallery planned to open children theatre to motivate and develop interest on theaters. More funding is required to be able to meet the needs of the communities.
4.4 WILDEBEESTKUIL
The project employs craft development specialist to train and develop crafters in the entire province. It has started in year two thousand, with R2m to set up the project. It is a community based public rock art project. Khoi-San people, researchers and other stakeholders joined together to conserve the engravings in the site; the engravings are more than 400 spreads over a small sacred hill.
The site is owned by the !Xu and Khwe San people. At the visitors center they have some displays, shop for craftwork made by !Xu and Khwe crafters and other community-made souvenirs. They managed to run the project through a funding from the Department of Arts and Culture (DAC) and the lottery. In an attempt to revive the !Xu and Khwe San language they opened a radio station in their language that has been neglected. The project management are involved in investing in Culture projects that was initiated by the DAC in 2001. The project management train crafters and look at the products and the potential for their marketing. All the projects in the region are under one umbrella body called Mayibuye Cultural Centre. It helps the crafters to participate at local and international exhibitions.
4.4.1 CHALLENGES
The project has a lot of crafters and craft production but they are not generating enough money to be sustainable because some of the production does not meet the required standard. There is a lack of capacity building. The project has only one regional manager to oversee all the areas because there is no personnel in those areas. When the project was stating it had enough budget to train the crafters with marketing skill but they cannot sustain their business. The project coordinators approached Council for Science and Industrial Research to help the crafters to improve their quality but could not afford the required amount to do the job.
4.5. SOL PLAATJE MUNICIPALITY
The municipality manager informed the delegation that the unemployment rate is at 41%. On that note they decided to seek ways to improve the standard of living by creating more jobs. The municipality task team decided on an event called “Diamond and Dorins” during Easter time. The event has been running for the past two years. On Saturdays it targets youth from surrounding areas for the festival at Galeshiwe stadium. On Sundays they target adults with music festival.
They also involve the local artists to combine with international artists and they charge nominal fee. During this period they receive more people from other provinces to attend the function. The main objectives of the festival are to reduce unemployment rate and to provide a national window for the artist and cultural groups. Many SMME’s participated and were able to sell their goods. In organizing the festival the municipality is trying to familiarize people with indigenous music. Although it was a once-off event it helped the small business and artist to market their goods.
Two million rands were budgeted for the festival. The budget was used for production, marketing the event, burners, press releases and gala functions to promote and publicize the festival to increase the number of audience. The municipality is working with Kagiso exhibitions to try and help the local artists and crafters to use the market related prices.
4.5.1 CHALLENGES
The municipality wishes to have a help desk were every person entering the Northern Cape can be informed of the activities that are taking place. There is no future for the “Diamond and Dorings” because of lack of funding. The municipality does not have an existing relationship with the Department of Arts and Culture. Business does not invest nor support the events they are not sure of sustainability.
4.6 MULTI-PURPOSE CULTURAL CENTRE
The center is still under construction. It is the structure that will accommodate Arts, Culture, Sport and Recreational activities. The project intends to have a double storey arts and craft center, including dance, drama and orchestral studios, arts and crafts design and workshop areas. A separate two storey building will be used for games and sports complex, including a double volume “sports hall” and dedicated areas for aerobics, static training, weight training, circuit training. They hope it will be able to bring youth together to utilize the facilities provided. Local people do the construction. The project has created jobs for the unemployed.
4.6.1 CHALLENGES
There is no clarity as to who will be the owners of the center when it is completed.
4.7 THE BIG HOLE
The Big Hole is currently listed number one on the Tentative List of the World Site List of UNESCO, as the Kimberly Mine and associated Industries. The site is identified with the Industrial Revolution of Africa and is the spark for the scramble for Africa. The Big Hole site is under construction. All the De Beers Consolidated mines museums items are kept for safety until the refurbishment of the museums.
The construction has created employment for 400 people. The project received R50m from De Beers; R23m has been allocated for black empowerment and R3, 8m for local business. When the construction is complete, preference will be given to local people to own the business, however, only those who can be able to sustain it. They intend to make a paving for visitors to see the Big Hole nearer. The interesting part about the Big Hole is that the migrant labourers did it manually. 4.7.1 CHALLENGES
The mine labourers are not recognized in the Big Hole with particular reference to their work.
4.8 APOLLO DEVELOPMENT ASSOCIATION
The Apollo Development Association was rediscovered in 1998 and the Apollo Development Association that is a community organization was born and the Apollo Project started. The cinema was reopened and other activities such as training, craft development, video recording started. The community and the youth run it. It is a Section 21 Company with a board and three directors.
In Apollo they are involved in many community projects such as resource center. The management converted a horse stable into a studio using the Department of Arts and Culture funds. Crafters are taught craft skill and are provided with material by the association. They bought a house using funding from the Lottery to open a craft shop. They also host a film festival every year with the help of National Film and Video Foundation, where they feature African films and short stories. They are able to train youth on video production. They also train people in computer skills through the Department of Labour department. Tupperware and Business Day donated the computer equipment. The ADA approached 30 unemployed people to study computer.
The ADA intends to open a film school and to use some of their studios as a conference venue.
4.8.1 CHALLENGES
There is a lot of decline in Apollo movements due to capacity problems. They have a R20 000 overdraft in their day-to-day running of the association. The report they have and questions suggest that there is a mismanagement of public funds. The association bought the house under Mr. Johan because the previous owner did not want to sell it to the association for the reason unknown to them. They requested the provincial government to intervene in the transfer of the property. Lately, they now have a problem in accessing Lottery money because Lottery wants them to use the money for the intended request but they use it as the need arises.
4.9 VICTORIA WEST MUSEUMS
The Victoria West Museums is a Province-aided museum and existed since
- The museum employed two personnel, namely a cleaner and a curator. The museum is run by a Board of Trustees of six members with a term of office of three years. The museums have two sections namely a cultural history and a natural history section. It also serves as the source of information for school projects and a special arrangement was necessary to provide a place for learners to work.
4.9.1 CHALLENGES
The museum needs to be capacitated in order to run effectively. It also needs additional staffing, as two staff members currently run it.
4.10 BRITSTOWN MUSEUM
The Museum is a municipality museum and is housed in an old church building that is a national monument. It is a museum by name but there are very few items inside that are not well kept. The Councilor indicated that after 1994 people who owned it took most of the items that were on display, but according to rules of the museums once one donates an item to the museums one loses the ownership of such an item.
4.10.1 CHALLENGES
The management of the museum is not good. According to the Regional Office of the Department they could not establish a catalogue of exhibits that existed and there is no file with information on all the objects of the museum. The museum does not have any permanent personnel.
4.11 SIYANDA THEATRE
The mission of the theatre is to commit itself towards the development of the performing arts such as dance, music, drama, folklore and poetry. The Siyanda Theatre Laboratory culminated from the genuine need of transforming existing individual talents into positive advantage. It made provision for marginalized local community groups to make their voices heard. The Siyanda laboratory is a platform to allow local art groups to develop themselves as artists that can equally make it to the national market. The artists are participating in some of the local competitions such as Idols and Old Mutual choral.
4.11.1 CHALLENGES
The request for funding from the Business Arts South Africa was unsuccessful. The distance in the provinces is also another problem, because sometimes they are unable to participate in events due to travel cost. There is an unfinished craft centre. Marketing is another problem, because they do not have the necessary skills to market their craft products. As a result, they end up selling it to people who get more profit than the producers. Although they are very strong in music genres they are unable to reach the studios to record because of the distance in the province. In terms of staff there are no service contractors, no post description, no duty sheet, no daily management of staff and training, and there is no capacity building for staff to become multi skilled. Another problem is the structure and organization since there is no organogram, no strategic plan and no operational plan.
4.12 MEETING WITH THE MEC ON SPORTS, ARTS AND CULTURE: MR K MOLUSI
Mr. Molusi indicated that the province is making progress in other areas such as skills development on arts and culture and created jobs for the unemployed in the province. He mentioned that finance is the major problem. The budget allocated for them does not meet the needs of the province. The province is short of 47% of labour and needs an R13m boost to fill the existing positions. As an example of the shortage of personnel, the MEC mentioned that the Head and the deputy director manage the heritage unit in the province.
The provincial government has conducted an audit on libraries and found that the municipalities are not interested in running the libraries. The provincial government is concentrating on restoration of the museums because they saw a need for that. They also focused on policy formulation to have a clear guideline on language and heritage. They are also intending to change names in some of the museums in consultation with the communities and the researchers. The museums currently focus only on the past and there are few areas where every citizen is represented.
4.13 MEETING WITH THE HEAD OF THE DEPARTMENT MR. H. ESAU The Head of Department gave an overview of the department is work through their programmes structure as follows:
4.14 ARTS AND CULTURE
Arts and Culture is responsible for events management and hosting of commemorative days such as Freedom day and Heritage Day. It is also responsible for the development of Community Arts Centres. They look at training of out of school choral musicians, development and training of drama artists and crafters. It also encourages the promotion of dance, drama, music and arts genres
4.14.1 CHALLENGES
The immensity of the provinces impact on traveling expenditure of the department. The inadequate funding allocated towards celebrating commemorative events. Unemployment rate is very high. The shortage of staff due to lack of skills in the unit. Communities in rural areas are not committed.
4.14.2 ACHIEVEMENTS
• Exposure of crafts and exhibitions throughout South Africa
• Establishment of Northern Cape Federation of Community Arts and
Culture Centres
• Participation at the Grahamstown Arts Festival
• Successful hosting of festivals e.g. Vukani Arts Festival
4.15 MUSEUMS AND HERITAGE
The major challenges are the maintenance of its Victorian and Edwardian buildings. Northern Cape did not inherit a museum service in 1994. Municipal museums do not get the necessary assistance due to lack of capacity. Municipalities subsidize only five museums and private institutions fund the rest.
4.15.1 ACHIEVEMENTS
Launch of the Duggan-Cronin Thandabantu and the Children of Democracy exhibitions. Photographic storage facility to house all photographic material was built with funding received from Lottery Board. The oldest house in Eksteenfontein has been restored to house a community museum.
4.15.2 CHALLENGES
In order for the museum to be run adequately, funding needs to be increased for the restoration of museum building and transformation of regional museums. Staff shortages in certain crucial areas hamper the smooth running of the institutions and also the transformation of the museums.
4.16 LIBRARIES AND INFORMATION SERVICES
The Library and Information Services strives as an agent for development through the provision of Library and Information Services to all communities thus creating educational and recreational opportunities. It has 98 Community Libraries, 23 depots and 41 Mobile Book Boxes. The number of visitors to the libraries has increased for the past two years to 192,252 registered members compared to other years. 4.16.1 ACHIEVEMENTS
The provincial government has managed to purchase 34,715 copies of library material and distributed it to 162 service points. They provided Mobile Book Box services to 38 outlaying rural communities through donor funding and created 29 jobs.
4.16.2 CHALLENGES
The impact of Schedule 5 function of the constitution on delivery of library services. The sustainability of the established services is not guaranteed.
4.17 KHOMANI SAN COMMUNITY PROJECT (KALAHARI DESERT)
The Khoisan people are unable to run the land officially. They complained about corruption in giving out land. The Khoisan are not benefiting as the owners of the land. The project got the money from the South African sign language and the government. A building was promised for crafters, however it is not yet erected. They are complaining that there is no infrastructure in the area to provide work for the young ones.
The government is providing funding for one year only and by so doing they are losing staff because there is no commitment. They are only making traditional inspired craft they need to be trained on new skills. The lady hired as a craft specialist will be leaving at the end of the year; they are struggling to get people because people are reluctant to work in the desert.
4.17.1 CHALLENGES
The Khoisan people need a proper workshop on the advantages of having Identity Documents. The Khoisan is moving away from their traditional way of living. They have a feeling that the government does not recognize their culture.
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CONCLUSION
• Although the province is big, the government has done a great deal in developing it Members who visited the province just after 1994 were so amazed with the development and improved infrastructure • When visiting the municipalities, there were no municipal mayors and councilors to brief the committee on what is happening on language board at local level • There is a lack of capacity building • The Department of Arts and Culture and the Department of Education are not working together in terms of cross cutting issues such as Language, Arts and Library • There is no mention of migrant laborers in the Big Hole in Kimberly mines such as digging the hole manually and their history in terms how they landed in the mines • The craft centers are poorly managed due to a lack of capacity and skills development • The crafters are not aware of the trade fares and they are just selling their products to a person who resells it for better offers, by so doing the inventor does not get the patent • The crafters lack the marketing information • The province does not utilize the SITA’s or have the idea on their operations • In Bristown people looted the objects of the museum and there are follow ups on that • There is no mention of the oral literature in all the institutions visited • 43% unemployment is too high • The Khoisan people do not understand the issue of not having Identity Documents will make not to qualify for houses. • Although they are aware of the poverty alleviation programmes they do not know how to access them • For the artists groups there is no proper leadership • Pansalb is more concentrating on academics than in elderly people for language development • The Northern Cape is very rich in Indigenous knowledge but there are no dedicated people to pursue that.
- RECOMMENDATIONS
• The provincial government should speedup the process of transferring the arts centre house to the association as a matter of urgency • The province should get some qualified quality control to access their work • The crafters should have a workshop on quality control, financial management and marketing • Each institution should be encouraged to have its own clear business plan and budget.
Reports to be considered.
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Report of the Portfolio Committee on Arts and Culture on a Study Tour to Pretoria, dated 8 November 2005:
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BACKGROUND
The Committee visited Pretoria on the 13 April 2005. The municipality has on numerous occasions attempted to obtain approval for the utilization of the Paul Kruger Museum, Capitol Theatre, Palace of Justice and Old Synagogue properties since the previous established City Council of Pretoria and the Greater Pretoria Municipal Council.
In 2004, the Office of the Chief Operations Officer (COO) made an intervention and informed the Tourism division that the Office of the COO will facilitate the project.
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OBJECTIVES OF THE STUDY TOUR
❖ To look at how the buildings that were previously used as government houses were utilized ❖ To access the buildings that are considered for heritage purpose and are part of the city’s urban renewal strategies
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COMPOSITION OF THE DELEGATION The multiparty delegation that went to Pretoria consisted of the following members:
Mr. S L Tsenoli (Chairperson)(ANC) Mrs. N D Mbombo (ANC) Mr. P Maluleke (ANC) Mr. M H Matlala (ANC) Ms. M Mdlalose (IFP) Dr C P Mulder (FFP) Mr. C L Gololo (ANC) Mr. M R Sonto (ANC) Mr. L Zita (ANC) Ms N Borotho (Committee Secretary)
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MUSEUMS VISITED
• Paul Kruger Museum • Capitol Theatre • Palace of Justice • Old Synagogue
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FINDINGS
5.1 PROCESS
The office of the Director General: Public Works was contacted on the municipality’s interest in the utilization of the four properties for heritage tourism benefit for the city. The delegation was informed that the Palace of Justice will be utilized on a full-time basis and is therefore not available, the Old Synagogue was available and proposals have been made by the Jewish community but not followed through, the Capitol Theatre belongs to Provincial Public Works and is currently being utilized by the municipality as parking space.
The Project Facilitator, Ms Makwange approached Development Bank of South Afica (DBSA) for possible funding of a feasibility study on the restoration and utilization of the Old Synagogue and the Capitol Theatre. The DBSA was keen to assist and became part of drafting the terms of reference for the study. DBSA also introduced the University of Pretoria to the process. The last conducted feasibility study on the Old Synagogue was in 1995.
Public Works has informed the Department that they are busy with a study to determine the extend of dilapidation of the Old Synagogue and the costs of maintenance thereof. The results of the study will form part of this process.
5.2 CHALLENGES
• To get Public Works’ disposal or future use plan of the properties
• To get Public Works (provincial and national) to support the
municipality’s efforts and get coordination and integration on the way
forward.
• Funding for the restoration and/or development of the properties.
The Chief Operations Officer has commissioned the University of Pretoria to conduct a feasibility study on the properties and to provide proposals on the possible future use for heritage tourism benefit to the city and the country. The study will be concluded in June and will form the basis of negotiations with Public Works and other stakeholders as well as possible funding.
- PROGRESS ON LIBRARIES
The library services management conducted an audit of all library services in Tshwane with a view to come up with a strategy that will inform further provision of the service to under-serviced areas. This audit showed that there was a skewed distribution of library services towards areas in the South, Central and some parts of the East of Tshwane whilst areas in the North of the City were under serviced. The challenge then faced by the Social Development Department was to explore various ways, which will ensure provision of services to under-serviced areas of the North whilst ensuring that services in other areas are still maintained. This would be done within the budgetary constraint of the Department.
The results of this audit therefore prompted the library management to write a report to Council requesting for permission to engage in the process to redistribute library services. The first report dated 11 February 2004 was discussed at the Portfolio Committee: Health and Social Development and subsequent Council meeting of the 11 March 2004 with the following resolution taken:
• That note is taken of the current imbalance of service provision
between the Northern and other areas of Tshwane.
• Approval in principle be given to proceed with the planned
redistribution of services to improve service delivery to the Northern
areas of Tshwane
• Note be taken of alternative services to be provided to affected
communities
• The process to redistribute library services is implemented with
immediate effect and implementation plan be submitted to Council
within six months. To comply on the four resolutions by Council, a follow up implementation plan was submitted and resolved as follows by Council at its meeting of the 28 October 2004:
The implementation plan in respect of redistribution of library services as presented in the report is approved. Redistribution of library services forms part of the alternative service delivery program of the Health and Social Development Department.
The Strategic Executive Officer (SEO): Health and Social Development be mandated to facilitate a public participation process in consultation with the office of the Speaker of the legislature with a view to implement the redistribution plan. The SEO was also requested to investigate the possibility of providing a budget for the construction of libraries in certain parts of the cross-boundary areas in consultation with the relevant Provincial Department of the North West Province for the year 2005/2006.
- CURRENT LIBRARY SITUATION IN THE COUNCIL OF TSHWANE METROPOLITAN MUNICIPALITY
At present there are 39 community Libraries in the Tshwane area. There is an imbalance in service provision between the Northern and other areas of Tshwane. There are only 4 community Libraries in Soshanguve, Hammanskraal and Temba while the rest of the Libraries are situated in close proximity to one another in the South and central Tshwane. The Library services gaps have been identified in the. Northern areas of Tshwane where communities do not have adequate Library services.
Some Libraries are in a dilapidated state e.g. Pretoria North and Waverly, and this will need a lot of money for maintenance and repairs. In the Northern area of Tshwane where there are fewer Libraries, they are situated very far from each other with an average of 13 km from one Library to another. Of great importance is the fact that the Northern areas of Tshwane are characterized by a need for basic services, which include learning opportunities to improve the quality of life. Due to the socio- economic status of the majority of people especially in the North of Tshwane, these people are found not to have cars for traveling to access libraries.
7.1 CHALLENGES
• Improvement of current service delivery: Information provision,
especially of digital/electronic nature
• Needs Libraries of better standards that would provide efficient and
effective services to develop communities
• Lack of development programmes such as ABET, etc with the aim of
breaking the lack of literacy in our country.
- INTERVENTIONS/STRATEGIES TO ADDRESS THE CHALLENGES
In order to address the above challenges the Social Development department proposed the following strategies:
- ESTABLISHMENT OF HUBS THROUGHOUT TSHWANE
A Hub is a fully resourced information centre. This will have adequate physical space, personnel, stock (books as well as audio visual material), computer equipment (at least 2 for internet usage and 2 to search the library data base), copiers, fax machines, answering machines, Security system, study areas, activity rooms and programs often presented and facilities to rent out. 10 hubs have been identified for the Library services and they are the following: Bodibeng, Hammanskraal, Akasia (North) Saulsville, Hercules (West)Es’kiaMphahlele (Central)Olievenhoutbosch, Lyttelton (South)Mamelodi West, Alkantrant (East)
For every hub there will be a satellite and a number of libraries in the same area, hence this hub will become the main library in the area concerned.
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TRANSFORMATION OF DEPOT SERVICES The Department is currently looking at transforming Depot services to enable accessibility by the members of the community. This will encourage cooperation and build relationships. A Depot service provides a limited number of books and it only provides books and no other Library material such as periodicals, tapes, etc and the person responsible for a Depot is not a staff member of Tshwane.
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INCREASING MOBILE LIBRARY SERVICES The extension of services through the mobile service would be encouraged, so that people without actual library buildings are still able to access them. There are currently two busses that are fully operational and the intention is to introduce more bus services and to post these to areas that are currently without services.
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PARTNERSHIP WITH OTHER STAKEHOLDERS The Department is considering partnerships with other stakeholders, including the Department of Education, with the aim of locating Library services in Schools. There are already four libraries existing as pilots and these are: the community/school libraries of Bajabulile (Mamelodi), Gauteng (Mamelodi), Mahlasedi Masana (Mamelodi) and West Park in operation, though this was done in an ad-hoc manner. The strategy would then be to formalize the partnership with the Department of Education. To this effect, the Social Development department has already initiated meetings with the Gauteng Departments of Education and Sports, Arts, Culture and Library services with a view to draft a formal Memorundum of Agreement that can be signed between the three parties. These meetings have resulted in the setting up of a TASK team that will develop the said Memorandum Of Agreement.
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PHASING OUT OF RENTED FACILITIES A lot of Money is being used to pay for the rented facilities and it is difficult for the Library service to afford such payments. It is anticipated that with the agreement in place, the services will be rendered from facilities such as schools. Care will be taken in the location of libraries in schools to ensure that the normal learning environment of the learners is not disturbed.
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PUBLIC PARTICIPATION MEETINGS
The Department recognizes the importance of informing the public in the processes and getting their inputs to enable the finalization of the plan. This is also in terms of the requirements of the Act as well as the resolution by Council. The public participation meetings were scheduled with the assistance of the Office of the Speaker of Council.
Report to be considered.
- Report of the Portfolio Committee on Arts and Culture on a Study Tour to Robben Island, dated 8 November 2005:
- BACKGROUND
The Portfolio Committee on Arts and Culture has undertook a study tour to Robben Island as part of its oversight function to the institution on the 04 August 2004.
During the budget speech of Arts and Culture the Minister mentioned that Robben Island Museum was allocated R35.5 million to invest in more effective management, maintenance and refurbishment. Robben Island Museum is one of the defining symbols of democracy and the World Heritage site in South Africa.
- OBJECTIVES OF THE STUDY TOUR
Robben Island is one of our World Heritage Sites. The intention of the visit is to see all the work that has been done in terms of maintenance and refurbishment of the Island. Robben Island is one of the defining symbols of our democracy. The Committee wanted to assess the building as it carries our rich history.
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DELEGATION
i) Mr. SL Tsenoli (Chairperson) ANC ii) Mr. CL Gololo ANC iii) Mr. P Maluleke ANC iv) Mr. MH Matlala ANC v) Ms ND Mbombo ANC vi) Ms D Kohler-Barnard DA vii) Mr. LW Greyling ID viii) Dr CP Mulder FFP ix) Ms TR Cawe (Committee Secretary)
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OFFICIALS IN ROBBEN ISLAND
Mr. P Langa (Chief Executive Officer) Mr. B Martins (Council Deputy Chairperson) Mr. A Kathrada (Chairperson) Mr. T Nemaheni Mrs. D Prins-Solani (Senior Manager for the Pubic Programming Department) Mr. J Makola Exhibition (Unit Manager)
- INTRODUCTION BY MR. A. KATHRADA
The Robben Island Officials at the Nelson Mandela Gateway welcomed the delegation. Mr. Kathrada in his welcome mentioned that they felt honored to be visited by members of Parliament as sometimes they feel that they are neglected. He started by explaining the importance of the gateway in their auditorium, as it is the last point to the museum. It took three years to build the auditorium. The cost for the building was R44m the funds were raised privately and R8m from the Department of Arts and Culture (DAC). The auditorium accommodates 150 people and is open to be hired for conferences and meetings etc.
- VISITING ALL THE SITES
The committee received an overview on World Heritage Status and Integrated Management Process, and organizational structure after viewing the following sites that are of significance on the Island: Visitors Centre, OU Trong, Blue Stone Quarry, Lepper Swimming Pool, Desalination Plant, WWII Guns, Light House, Medium B Prison, Lime Quarry, Sobukhwe Complex, Maximum Prison, Kramat and Penguins.
6.1.MURRAY BAY HABOUR
The Island has spent R66m during a period of three years to rehabilitate the habour. The repair and improvement of the habour was to make it user friendly for even those who are physically challenged. The history of the habour is derived from time to time from the former prisoners who narrate the stories of Robben Island according to experience.
6.2 VISITORS CENTRE
The visitors’ centre will be renovated but it will keep the old image of the centre. The old structure has not been changed in that there are still barriers between the visitor and the prisoner; there is no direct contact.
6.3.BLUE STONE QUARRY
The Island management is in the process of rehabilitating the quarry. The manner in which the rehabilitation will done, it will be build similar shape to the blue stone quarry, the wall will be made to be able to stand the harsh weather of the island. They applied to South African Heritage Resource Agency to build the wall. The challenges they are faced with they cannot mine in heritage site, but to try to balance the culture and heritage.
6.4. LEPER SWIMMING POOL
Sick females who were suffering from leprosy used this tidal pool. It was treated, as the pools of Bethesda in the Old Testament were they believed that the seawater would heal their wounds. In the new project the researchers investigate people who have a real story and are living with leprosy to be sent to the island. The researchers also collect the dates around leprosy in Robben Island.
6.5. WWII GUNS
In the island they also have some 9.2-inch guns that were never used during the war. The estimated costs for transport were more than a million rands from England just to be used for practice.
6.6. LIME QUARRY
The lime quarry is the place where the prisoners used to work and the advantages to this kind of work was that the prisoners could work in groups and discuss some crucial political issues. They used this time to study, share information and to understand the different cultures.
6.7. MEDIUM B PRISON (Multi-purpose centre)
In 1970 the complex was converted into a prison for common law prisoners. The Medium B Prison was officially closed in 1996. When the museum was opened the Medium B required a new use for the structure. It was converted to a resource centre where programmes and courses are held. The facilitators, train students from all over the African countries on Robben Island Training Programme (RITP), which helped increase the number of black heritage practitioners.
The learner’s centre is used during school holidays and school term for specific curriculum activities. Seventy learners can be accommodated. The project was made possible by funds made available by the Department of Arts and Culture.
The Robben Island Museum also has a library facility that is used by the students from University of the Western Cape and University of Cape Town (UCT) for research purposes. The library has books and powerful collection and was assisted by UCT on how to conserve books. In the entrance there is a garden of Indigenous plants, where they have medicinal plants that are taken by HIV/AIDS people.
6.8. ROBERT SOBUKWE COMPLEX
Mr. Robert Sobukhwe is one of the early prisoners of the island. During his stay in the island he was housed in isolation to other prisoners. He had his own house and used it alone with the security around him. The prison officials allowed his family to stay over and provided him with newspapers. According to Mr. Kathrada the former government wanted to create the impression that Mr. Sobukwe was a special prisoner so that other prisoners can convey the message to his organization to discredit him and his views.
The site has dog kennels where Sobukwe’s children used to stay. The RIM researchers have decided to destroy the walls of the kennels but are working on the whole interpretation of the complex. The DAC has made available R1, 2m for repairs and maintenance and R2m for photographic and other exhibitions.
- WORLD HERITAGE STATUS AND OVEVIEW OF INTEGRATED MANAGEMENT PROCESS BY MR T. NEMAHENI
Mr. Nemaheni started his address by mentioning that the Robben Island Museum had a visit from the IUCN-ICOMOS-ICCROM Monitoring Mission to inspect Robben Island in February 2004. The Monitoring group highlighted nineteen recommendations for Robben Island to qualify to be a World Heritage Site. It was mentioned to the World Heritage Committee that some of the recommendations they mentioned the RIM is already working on them. They were also commended for the work they have done. They have started with the integrated management plan that is one of the recommendations; they have an existing operational plan and identified five areas and have worked on four already. In implementing these recommendations they will have to prioritize.
7.1 MANAGEMENT FRAMEWORK
The organization structure for RIM has been reviewed and consolidated based on the KPMG. RIM council has adopted the new organogram in principle.
On the vacancies to be filled in by qualified and experienced staff they managed to fill some of them and are working on few post. RIM got a 3.5million from the Department of Arts and Culture to work on the integrated management plan.
Robben Island Museum has worked extensively on some of the requirements by the World Heritage Committee.
- COMMENTS BY THE COMMITTEE MEMBERS
Members raised concerns as to what extent can the Robben Island Museum continue as an institution. What do they have to teach people on how they survived the crucial part of heritage and how do people learn from the RIM legacy. Did the RIM consider bringing together the relevant departments that have an interest in some of the areas such as the Department of Environmental Affairs and Tourism?
The management should bring together the provincial and local government to assist in funding, not to depend on the Department of Arts and Culture for funding while other departments are taking credits. Members asked about the changing of the street names that are not reflecting people of South Africa. What is the RIM doing about fire management and members wanted to be informed more on disaster management strategy.
- RESPONSE FROM THE RIM MANAGEMENT Mr. P Langa the responded by stating that the RIM has a whole range of issues such as the endangered site, they are working on the relation between the conservation and whole list of sites that are in danger. At the moment they are concentrating on issues that need attention such as providing sufficient water and emergency services to run the RIM.
RIM invited a representative from the Cape Town City Council to attend their meetings to be informed of the processes taking place. World Heritage Committee recommended that they should rectify their Human resources and they already worked on that. By improving the RIM with slight changes they intend to make people aware of the institution rather than making money. The problems they have with RIM it falls under the Department Environmental Affairs and Tourism and the Department of Arts and Culture legislation were the RIM has to comply with. Ideally they are supposed to account to Department of Arts and Culture and the Department of Environmental Affairs but its not so. In terms of the Legacy of the RIM they have drawn a public programme in consultation with the Department of Education, former prisoners and collected relevant information. They produced to a documentary that is used in Universities.
They also work with Nelson Mandela Municipality that is building museums they requested museum information from the RIM. The rescue services is their priority because Koeberg fire station is almost 10km from RIM, they have sent people for training in first aid and medical training. On Fridays they exercise and work on fire fighting. A plan is in place for more training.
RIM has a lot of challenges, as it is not just an ordinary museum, but a historical site and the resources to preserve it are very scarce. The management hopes the review planned by the Department of Arts and Culture on Heritage Act will be able to clarify issues.
Report to be considered
- Report of the Portfolio Committee on Housing on fact-finding mission to Joe Slovo informal settlement in Langa and Khayamnandi in Stellenbosch Western Cape dated, 16 August 2005:
The Portfolio Committee on Housing having undertaken a fact finding Mission to Joe Slovo Informal Settlement in Langa and Khayamnandi in Stellenbosch in the Western Cape on 25-26 January 2005, reports as follows:
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Introduction
The Portfolio Committee on Housing undertook a provincial visit to the Western Cape, to the areas that were affected by the fire disaster in Joe Slovo, KwaLanga and Khayamnandi in Stellenbosch. The visit was undertaken over two days, on January 25 - 26, 2005.
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Members of the delegation were as follows: • Ms ZA Kota-Fredericks ANC (Chairperson) • Mr RJ Tau ANC (Chairperson: Select Committee on Public Services) • Ms BN Dambuza ANC • Mr DC Mabena ANC • Mr GD Schneemann ANC • Ms NJ Ngele ANC • Ms MM Ramakaba-Leseia ANC • Mr AC Steyn DA
Staff: Ms M Ntuli Committee Secretary Mr S Makeleni Committee Assistant
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Purpose of visit The main purpose of the visit was to assess the relief needs in the areas that were affected by the fire disaster and to find out what the Stellenbosch Municipality and the Council of the City of Cape Town had planned to do in this regard. The Portfolio Committee also wanted to give support to the victims of the fire disaster.
DAY 1 25 JANUARY 2005 On Tuesday, January 25, 2005, the delegation visited the Stellenbosch Municipality, where the Executive Mayor, Mr Alderman Ortell, welcomed them. Municipal Manager, Mr Bruce Kannemeyer, briefed the delegation on the fire disaster and highlighted two specific areas, which were severely affected, namely, Zone J and Zone O in Khayamnandi.
The Mayoral Committee included the following members:
• Mr Alderman Ortell Executive Mayor
• Mr Bruce Kannemeyer: Municipal Manager
• Alderman MW Kalazana: Speaker
• Councillor GW Adonis: Deputy Executive Mayor
• Concillor JC Anthony: Executive Mayoral Committee Member
• Councillor HC Bergstedt: Executive Mayoral Committee Member
• Councillor SM Gordon: Executive Mayoral Committee Member
• Councillor NA Mgijima: Executive Mayoral Committee Member
• Councillor HG Pheiffer: Executive Mayoral Committee Member
• Alderman JB Truter: Executive Mayoral Committee Member
• Mr Piet Smit: Director – Corporate Services
• Mr Jan Wolmerans: Director – Strategic Services
• Mr Eddie Delport: Director – Engineering & Technical
Services
& Acting Director – Planning & Economic
Development Services
• Mr Keith Ford: Director – Community Services
• Mr Kevin Bey-Leveld: Acting Director – Electrical
Engineering
Services
• Mr Neville Langehoven: Director – Public Safety
• Mr Dries van Niekerk: Acting Director – Financial Services
• Mr Lester van Stawel: Head – Program Manager: Housing
• Mr Emile van der Merwe: Program Manager: Planning and
Economic Development
• Mr Frans van Dalen: Program Manager: Technical Services
The delegation accompanied by the Mayoral Committee departed to a site inspection in Khayamnandi.
2.1 Findings The delegation saw brick hostels, which were originally part of the Stellenbosch Winery and had been developed and later converted into family units. The Stellenbosch Municipal Council had also built some new houses for the families that were previously in shacks. The Municipal Council was in the process of repairing a few formal houses, which were severely affected by smoke during the fire disaster in an area called “Zawazawa”, in Mondi Crescent.
Zone “O” was the first area where the fire broke out. The area was
undeveloped, with no roads and fire hydrants, thus allowing the fire to
run wild and uncontrollable. The densification of the shacks made it
difficult to move freely in terms of security and rescue measures.
Fire fighters could, therefore, not access the area. The area was
declared a disaster area.
In Zone “O”, about 650 structures were destroyed by the fire and in
Zone “J”, 25 structures were burnt down. It was reported that a total
of about 1000 structures had been burnt down since December 2004.
In Zone “J”, there were only two (2) fire hydrants. It was reported
that the Municipal Council was in the process of putting infra-
structural services in place. People in this area would be moved to
Watergaan area at a later stage.
The Stellenbosch Municipal Council had identified a piece of land in an
area within a walking distance from where the fire had occurred. The
area would be utilized to accommodate the victims of the fire on a
temporary basis until suitable land could be identified. At the time
of the visit, the Municipal Council of Stellenbosch was in the process
of liaising with the Government of the Western Cape in this regard.
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The delegation also visited a local community hall in which the victims of the fire were in the process of being registered to receive immediate relief grants of R500 per family unit from the Department of Social Welfare. The Department of Home Affairs was also busy registering the victims of the fire for new Identity Documents in the same venue. The victims of the fire had also received an emergency kit valued at R800 per family unit from the Department of Housing in the provincial government of the Western Cape. The Masibambane Volunteers, who are funded by the government were also available to assist during the registration process. The police department from Stellenbosch was also available in the community hall during the registration process.
It was reported that arrangements to move families to Watergaan Development had already been put in place. The Khayamnandi Development Corridor would undertake this project.- After the site visit, the delegation returned to the offices of the Stellenbosch Municipality where they were shown a slide presentation of the whole area affected by the fire disaster. It was reported that three (3) helicopters had come to assist when the fire broke out. The Fire Department was on permanent deployment in the area from the time that fire disaster had occurred in December 2004. During the presentation, the delegation had the opportunity to ask questions from the members of the Mayoral Committee and made comments as follows:
• What were the main causes of fire? • Are the women contractors involved in putting up the new housing structures, especially those who are accredited by the SETA’s? • What are Golfers putting back into the economy of Stellenbosch? • Is there any community education to prevent fires in the near future? • Who is in control of the Emergency Kit, which is administered by the Western Cape provincial government? • The Watergaan project is a good initiative, but how is it going to resolve problems faced by the municipality regarding human settlements? • Are the emerging contractors involved in putting up the new housing structures? • The Stellenbosch Municipality should try and look at other projects such as schools, clinics etc. and not just houses.
4.1 Response by the Municipal Manager • The main cause of fire is still unknown at this stage, but the Municipal Council learnt that a stove had exploded and caused the fire. Most of the poorest families use highly flammable materials to make fire. • In terms of land availability, in most instances, Stellenbosch is zoned as an agricultural area. • The Municipal Council has realized a need to give education on fire prevention and fire fighting, not just to react to a disaster situation only. • The Watergaan project would also cater for other developmental projects and not just housing only. • The Municipal Council is in the process of getting women contractors involved. • Overall, the Stellenbosch Municipality has tried to improve the lives of people since they took over the Council.
4.2 Comments by the Chairperson of the Portfolio Committee • The issue of commercial land was discussed at the last MINMEC meeting. Negotiations between the Department of Land affairs and the Department of Housing are still underway in this regard. • The Stellenbosch Municipality should try and accommodate the women contractors in their housing projects by 30% as stated in the Housing Legislation.
5. In conclusion, the Municipal Manager requested the Portfolio
Committee delegation to assist the Municipality in addressing the
housing backlog. He said municipality required an amount of R800
million for this purpose.
DAY 2: 26 JANUARY 2005
During the second day of the provincial visit, the delegation
went for a briefing in the Mayoral Offices, in the City of Cape
Town. The delegation met with the Mayor of Cape Town, Ms N
Mfeketho, together with certain Councillors and Council
officials.
In his welcoming address, the City Manager thanked the Portfolio
Committee for coming to see the Joe Slovo informal settlements
after the fire disaster.
Thereafter, the Mayor of Cape Town gave a briefing together with
a slide presentation on the overview of the N2 Gateway Project.
She stressed the fact that the N2 Gateway Project is being
implemented in partnership with all three (3) spheres of
government.
The Mayor informed the delegation that there were three (3)
strategies in place to address the recurrent fire disasters in
Joe Slovo. The main aim was to develop the N2 Gateway, not only
because of the fires, but to develop the communities.
• The first strategy was for the City of Cape Town to provide immediate shelter and services in tents for the victims of the fire. • The medium-term strategy included the identification of land in Epping and KwaLanga to build temporary houses. The proposal was submitted to the Cape Town Chamber of Commerce and some objections were raised. The City of Cape Town has sought legal advice to assist in accessing sites. • The long-term strategy was to build houses and to create economic opportunities for the communities and also to address the problem of backyard dwellings as well as shacks near the hostels.
- After the presentation and the briefing, the Chairperson of the Portfolio Committee thanked the Mayor and stated that the City of Cape Town was moving in the right direction, especially in terms of the emerging contractors.
6.1 Members of the delegation posed the following questions: • What measures have been put in place to prevent the same thing from happening in the future? • What measures has the City of Cape Town taken to address the cause of the fire? • What precautions has the City of Cape Town taken regarding corruption in housing? • The transit camps, which include the use of schools, might disrupt the children’s education. How is the City of Cape Town going to address that? • The committee members asked whether the current projects won’t be affected by the Joe Slovo challenges.
6.2 Comments by the Chairperson of the Portfolio Committee • The delegation noted that most people affected in such fire disasters were mainly young women. The Portfolio Committee was planning to host a “Fire and Floods Conference” in Parliament in March 2005, in which the City of Cape Town was invited to attend.
7. In her vote of thanks, Councillor Beerwinkel thanked the delegation
for listening. She also expressed a desire to have an ongoing and a
good working relationship with the Portfolio Committee. The
delegation, together with the Mayor and her delegation, went out on
a site visit to the Joe Slovo settlement.
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Findings The delegation went to the site where many homes were burnt down on January 15, 2005, during the day. The hostel area was surrounded by the shack dwellings, which were completely burnt down. In one of the shack dwellings, a four months old baby who was inside the house when the fire disaster occurred died after inhaling smoke. The government of the Western Cape took the responsibility of burying the child.
The delegation thereafter went to a temporary venue where there were fourteen (14) marquees on site in which the fire victims from Joe Slovo were housed. Each marquee housed 450 families together with some of their belongings. There were three (3) volunteers in each marquee who were delegated by the City of Cape Town to act as Liaison Officers between the fire victims occupying the marquees and the City of Cape Town. Meetings were held everyday between the officials from the Mayoral office and the occupants during whom their needs/concerns were raised. One of the fire victims requested the delegation to arrange a sewing machine for her. By sewing and selling some clothes, she would be able to pay for her children’s school fees. While on site, the delegation made the following observations on some of the activities, which were already put in place: • There was another large marquee, which was mainly utilized as a crèche. • Daily collection of refuse by a big truck was in place • A group of people cleaning the yard • Six water stand pipes to supply the water to the occupants • A temporary structure with disposable taps and mobile showers for (males & females separately). • Three (3) urns provided for the children to get hot water. • Daily supply of food for the fire victims from NGOs. Bambanani Volunteers were busy assisting in dishing out the food. • Private sector companies had donated some blankets and mattresses, which were supplied at night. • The Department of Home affairs was using one of the tents to process identity documents. • The Department of Social Welfare was also outside on site supplying baby food to the fire victims.-
The delegation also went to the Langa sports complex in which items such as second-hand clothing, shoes, mattresses and food parcels were sorted out for distribution to the fire victims. The items mentioned were donated by organizations such as the Red Cross Society and some NGOs in support of the fire victims.
All of the above-mentioned activities were co-ordinated by officials from the mayoral offices under the leadership of Mr Bathembu Lugulwana, who is a Project Co-ordinator.
- The delegation also visited another area called Wallacedene in which 14 houses were burnt down. The delegation met with Mr Steven Erasmus, Senior Housing Manager in the Housing Department from the City of Cape Town. Mr Erasmus reported that when the fire occurred, which started in a nearby shop, it was well managed, as there was no wind at the time. There were no deaths or injuries to the fire victims. The cause of fire was also unknown. The Disaster Team from the City of Cape Town supplied the fire victims with some food parcels and clothing. The houses in the area had already been re-built by the City of Cape Town.
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Recommendations
Stellenbosch Municipality
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The Portfolio Committee recommends that it be given a progress report on zone “J” and zone “O”.
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The Portfolio Committee requests an update on the housing backlog and the integrated housing strategy in Stellenbosch.
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The Portfolio Committee is asking for a progress report in terms of their disaster management strategy.
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The committee recommends that a land audit be carried out in Stellenbosch Municipality.
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The City of Cape Town
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The Portfolio Committee needs an update on their disaster management plan.
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The committee requires an update on the number of temporary houses in Delft and Langa as well as their plan to place the victims of fire to permanent accommodation.
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The Portfolio Committee recommends to be given an update on how the Epping land dispute was resolved.
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Report of the Portfolio Committee on Housing on study tour to Norway and the Netherlands, dated 16 August 2005:
The Portfolio Committee on housing having a undertaken a study to Norway and the Netherlands from 4 - 18 June 2005, reports as follows:
- INTRODUCTION
A multi-party delegation of seven (7) committee members of the Portfolio Committee on Housing and the Committee Secretary, undertook a study tour to Norway and the Netherlands from 4-18 June 2005.
Accompanying the parliamentary delegation were three representatives from the Social Housing Foundation (SHF), a representative from the National Department of Housing and two representatives from the National Housing Finance Corporation (NHFC).
- The entire delegation was comprised of the following persons: • Ms ZA Kota ANC (Chairperson) • Ms BN Dambuza ANC • Ms MM Ramakaba-Lesiea ANC • Mr GD Schneemann ANC • Mr TS Dodovu ANC • Mr AC Steyn DA • Ms S Sigcau UDM • Ms NM Ntuli Committee Secretary • Mr Brian Moholo Managing Director: Social Housing Foundation • Mr Marlon Abrahams Social Housing Foundation (SHF) • Ms Odette Crofton Social Housing Foundation (SHF) • Mr William Jiyana National Department of Housing • Mr Tlhoriso Thelejane National Housing Finance Corporation (NHFC) • Ms Mandu Mamatela National Housing Finance Corporation (NHFC) (Joined study tour during second leg)
1.2 The study tour was sub-divided into two (2) sections: • The first leg of the study tour took place in Norway from 5-11 June, 2005; and • The second leg of the study tour took place in the Netherlands from 13-17 June, 2005
1.3 Objectives of the Study Tour • To gain insight into the policy basis for the social and co- operative housing approach in Norway and the Netherlands. • To gain insight into the results achieved through the social housing and co-operative housing approach in Norway and the Netherlands. • To gain insight into the experiences and lessons learnt on the social and co-operative housing approach in Norway and rental housing stock in the Netherlands and how this has affected policy development in these countries. • To learn how the international social and co-operative housing approaches relate to and compare with the South African context and policy development approach as well as the roles, functions and responsibilities of the different spheres of government, these, national, provincial and local. • To look at the institutional architecture and players required for a well functioning social rental and co-operative housing sector. • To strengthen parliamentary relations and share experiences on the aspects of social and co-operative housing.
FIRST LEG OF THE STUDY TOUR: NORWAY 6-11 June 2005
DAY 1
On June 6, 2005 the delegation visited the offices of The Norwegian Federation of Co-operative Housing Associations (NBBL). NBBL was founded after the Second World War in 1946 and their vision is to offer members the opportunity to attain decent homes in a sustainable living environment. NBBL is a country-wide membership based association which represents over ninenty (90) co-operative housing associations. In his welcoming remarks, the Chief Executive Officer (CEO) of NBBL, Mr Ralph Norberg, stated that NBBL activities are funded by a combination of members’ contributions and income generated from the sale of NBBL products and services. Mr Norberg also highlighted the fact that on the next day, (7th June 2005) during the visit, Norway would be celebrating 100 years of its independence from Sweden. This was an historic day for Norway and he was glad to have the delegation around during such an historic event for Norway.
The delegation also received the following presentations from NBBL: • The Norwegian – South African partnership concerning co-operative housing development, by the Director of International Development, Ms May Summerfelt. • The Norwegian Co-operative Housing Policy, whose main concept is “ownership” by the Managing Director of Borrettsregisteret, Mr Sverre Bugge. • The Norwegian Co-operative Housing Movement (Legislation) by Mr Henning Lauridsen, Lawyer at NBBL.
All documents outlining the above presentations were circulated to the delegation.
The delegation thereafter visited the three (3) Norwegian urban housing development projects. Professor Sven Erik Svendsen, took the delegation to the following housing projects: Lambertseter: with a lot of facilities such as schools, shops, and an estimated population of 5 000 people. Romsas: was built in the 1970s and has a population of 10 000 people. The housing project also has facilities like a library, schools, a railway station, shops etc. Mr Marius Nygaard, Architect, took the delegation through Pilestredet Park. The entire area used to be the state hospital and was redeveloped into a housing project. This housing project was different from other housing developments in that 90% of the demolished hospital material was re-used for the housing project. 25% of the demolished material was re- cycled as paving slabs.
DAY 2 On June 7, 2005, the delegation visited Horten Co-operative’s offices and received presentations by the Director, Mr John Syvertsen, and the Admin Director of HBBL, Mr Rolf Mikaelsen. Copies of the presentations were circulated to the delegation. After the slide presentations on Horten’s historical background, the delegation thereafter visited apartments which were managed by Horten Housing Co-orperative. The delegation saw eighteen (18) apartments which are designated mainly for the elderly and the physically challenged people and are subsidized by the state. The Nowergian government pays for the care-taking services for the inhabitants. The Horten Housing Co-operative supplies them with meals on a daily basis. The CareTaker’s apartment is also residential.
The delegation also visited another housing project in Moss across the North Sea with 4 000 apartments which were built in the early 60s. Most people who live in Moss work in Oslo and travel by buses and trains on a daily basis.
DAY 3 On June 8, 2005 the delegation visited the Norwegian Parliament and met with two (2) Members of Parliament; Mr Peter Skovholt Gitmark (Conservative Party) and Mr Heikki Holmas (Socialist Left Party) who were representing the Parliamentary Committee on Housing. The two MPs briefed the delegation on their housing policy as well as government intervention in the housing sector. The Norwegian MPs also stated that in the Norwegian Parliament, all seven (7) political parties are equally represented and there is about 40- 50% women representation in all political parties. After a long interaction with the Norwegian MPs, the delegation thereafter visited the offices of the Ministry of Local Government and Regional Affairs.
The delegation received presentations by the State Secretary, Mr Roger Iversen, who welcomed the delegation and gave a presentation on the Norwegian Housing Policy: Responsibilities & Challenges, followed by the Deputy Director General in Housing & Building Department, Mr Per Nygaard, who gave a presentation on the History and Background of the Norwegian Housing Policy, who also highlighted the fact that in the 50s, Norway experienced the same enthusiasm for housing that South Africa is facing currently; and the Director General in the Housing & Building Department: Ms Inger Lindgren, who gave a presentation on the Norwegian Housing Legislation. The main highlight of her presentation was the fact that in the housing sector, all laws are against discrimination and also that by law, all parents in Norway are to provide a house for their children as long as they are minors. Copies of all presentations were circulated to the delegation.
The delegation thereafter visited the offices of OBOS which was established in 1929 when there was a housing shortage in Norway. OBOS is the largest Housing Management Co-operative in Norway with a membership of 200 000 people. OBOS provides full support to its members who live in its housing projects. They own commercial properties and are also involved in property development. In his presentation the Chief Executive Officer (CEO) of OBOS, Mr Martin Maeland, highlighted the fact that they provide their members with big incentives by negotiating discounts with their partners on behalf of their members. They act as a service provider for their members and ensure that their members get the best products available in the housing sector. Copies of the presentation on the history of OBOS were circulated to the delegation.
DAY 4 On June 9, the delegation visited offices of the State Housing Bank which was established after the Second World War, in 1945. The State Housing Bank has six (6) Regional Offices and a staff complement of 350 employees. The Director at Head Office, Ms Inger Vold Zapffe, gave a presentation on the Role of the State Housing Bank in the Housing Policy. The Director, Ms Anne Ruden, gave a presentation on Challenges to fill the Role as Useful Implementors and the Senior Advisor, Mr Torstein Syvertsen, gave a presentation on The Need for Social Housing.
The presentors highlighted the fact that only 5 200 people are homeless in Norway. The bank acts to stabilize the housing sector and also stimulates competition within the banking sector as a whole. Copies of the presentations were circulated to the delegation.
The delegation thereafter visited the offices of the Norwegian Agency for Development Co-operation (NORAD) and met with the Acting Director of NORAD, Ms Inguun Klepsvik. Ms Klepsvik made a brief presentation on the historical background on the Memorandum Of Understanding (MOU), which was signed in 1994 between the Norwegian Government and the South African Government. The main objective of the agreement was to develop a co-operative housing model for low-income households in South Africa, utilizing the Norwegians’ experience and technical support. The Social Housing Foundation (SHF) a non- profit company established by the South African Government in 1997, was mandated to promote, support and assist the integrated process of sustainable social housing development in South Africa. An agreement between NORAD, the National Department of Housing in South Africa and SHF was signed in 2002 for NORAD to provide financial assistance for SHF to develop the housing co-operative sector in South Africa.
Ms Klepsvik stated that the financial aid to South Africa was coming to an end in November 2005. The main purpose of the grant was to strengthen justice and democracy in South Africa. In terms of exchange and knowledge, their experience had been highly enriched. However, she asked SHF to submit reports on the projects which were covered through the financial assistance from NORAD for the past three (3) years.
The Chairperson of the delegation, Ms Z Kota, stated that the Portfolio Committee would continue to engage with SHF on its preparations for the outstanding documents. The Committee would also ensure that SHF submit all the necessary information required and would request NORAD for the extension of the financial assistance. She further stated that South Africa needed to continue learning from the successful Norwegian housing experience.
In conclusion, Ms Klepsvik emphasized that: • An application for the renewal/extension of the programme should be prepared and sent to NORAD before the due date which is October 1, 2005. • Recommendations and motivation for the extension should be put together and stated clearly. • The report should be specific about the systems that are in place, such as management, auditing, fighting corruption, accessibility of information both technical and administrative. • The report should explain fully if the stakeholders have a say in the organisation. • The report should reflect balance in gender issues. • The reported results on the programme are important.
She further stated that the South African Finance Minister should prepare a Memorandum of Understanding (MOU) and have it signed, as the rest of the world stands in admiration of what has been achieved in South Africa; and Norway still wants to be partner in whatever way.
DAY 5
On June 10, 2005 the delegation visited Gamle Oslo Sevicesentral, a Caretaker Services company involved in the revitalization of the inner city of Oslo and the renewal of the housing projects. The delegation met with Mr Ulf Guldbrandsen who is employed by Gamle Oslo Servicesentral and Mr Lee Roy Tandy, who is on a year’s exchange programme between Norway (NBBL) and Cope Housing in South Africa.
The Caretaker Services company offer a service to people who live in the housing projects by maintaining and fixing the housing projects in whatever needs to be fixed such as plumbing, electricity, doors, windows, refuse removal as well as gardening. Anything that is broken in the apartment is reported and repaired. The tenants pay for the repairs. Mr Tandy’s experience with the Norwegian model was invaluable and members of the delegation encouraged him to learn as much as he could and bring his experience and knowledge back in South Africa when his contract expires in November 2005. He was very keen and said he enjoyed what he was doing in Norway. He would then return to Cope Housing in Gauteng and work on an Advisory basis. He expressed the desire to teach and influence other South African youngsters on being a Care-taker and not to look down upon such a position.
The Chairperson of the delegation encouraged Mr Tandy to learn more and channel his experience to the youth in South Africa when he gets back. She also encouraged him to try and influence more South African students to engage themselves in this particular programme.
The delegation thereafter went to the NBBL offices for the summing up of the entire visit in Norway. They then received a presentation from Ms Kristin Fjeld-Eiken, former NBBL Legal Advisor, and currently an Attorney in Haavind Vislie, on Regulating Housing Co-operatives. Copies of the presentation were circulated to members of the delegation.
In conclusion, the delegation received a farewell speech by the International Relations Officer of NBBL, Mr Sverre Bugge. In his remarks, Mr Bugge stated that as members of parliament, it was their responsibility to decide on the legal framework for the housing sector and ensure that the legislation was consistent with their current economical situation and national tradition. He said it was up to the South African delegation to sort out which part of the Norwegian ideas and experiences could be transferred or adapted to their own challenges.
He further stated that good housing is one of the four cornerstones in a society together with education, health and jobs. Education contributes to jobs, jobs contribute to housing and health. He summed up by wishing the delegation well in their further stay in Holland and said it had been a pleasure hosting them.
SECOND LEG OF THE STUDY TOUR: THE NETHERLANDS 13-17 June 2005
DAY 1
The second leg of the study tour started on Monday, 13 June 2005, in the offices of the Ministry of Housing, Spatial Planning and Environment (VROM) in the Hague, where the Deputy Director General of Housing, Mr Bert van Delden welcomed the delegation.
The International Relations Officer, Mr Huib van Eyk made a presentation by giving a brief overview on the Dutch Housing Policy. He stated that the Netherlands was densely populated, with a population of 6,1 million inhabitants. He emphasized that housing in the Netherlands is never free for anybody.
The Co-ordinator of the Rental Policy, Mr Edwin Buser, made a presentation on the Rental Policy in which he highlighted the fact that the rental sector provides quality housing whereas 54% of the housing stock was owner occupied. The social rental stock was managed and owned by the housing associations. About 30% of the available land in the municipalities consists of social housing.
The Senior Policy Advisor for Urban and Regional Affairs, Mr Richard de Haan, made a presentation on Urban Renewal.
After interaction between the delegation and representatives from the Ministry of Housing, copies of all the presentations were circulated to the delegation.
The delegation thereafter received a welcoming address by the Minister of Housing, Ms Sybilla Dekker. The Minister expressed her delight in receiving the South African parliamentary delegation for the first time.
The Minister highlighted the relationship between South Africa and the Netherlands in the area of housing and urban renewal which was formally established in a Memorandum of Understanding (MOU) signed in 1997 by the Ministers of Housing from each country. The MOU was renewed in 2004 with the current South African Housing Minister, Dr LN Sisulu. The bilateral partnership was limited mainly to the social rented housing sector in South Africa.
The Minister stated that they work with Aedes, the national organization that promotes the interests of social housing organizations in the Netherlands, and with the Association of Netherlands Municipalities (the VNG). A large and unique network of stakeholders had been formed in close cooperation with the South African counterparts of these organizations: with the Ministry of Housing and the Social Housing Foundation (SHF) in Gauteng, the South African Local Government Association (SALGA) and recently with the National Association of Social Housing Organisations (NASHO). She said the network was unique in that no two countries work closely together on housing as the Netherlands and South Africa. She stated that she was planning to visit South Africa between October and November 2005.
In her concluding remarks, the Minister wished the delegation a productive and enjoyable study tour that would help to fulfill the important commitment to “housing the nation”. After the presentation by the Minister, the delegation received a video presentation by Mr Joop van Dam on the urban restructuring projects. The delegation then visited Duindorp district with a population of 6 000 inhabitants. About one third of the houses were to be demolished and build new ones as many of the houses had become too small. About 50% of the new houses would be rented to the low-income earners. Some of the buildings in the area had survived the First and the Second World Wars. The original tenants had the first option to move back into the newly built apartments. The area also catered for the elderly persons and had facilities such as pre-schools, schools, a community center and a church.
DAY 2
On 14 June 2005, the delegation was welcomed by the International Relations Officer, Mr Kees Elgershuizen at the offices of Vestia Housing Corporation in Rotterdam. Mr Elgershuizen also made a video presentation to the delegation on the Vestia Association. This housing association had built 70 000 houses, including students’ accommodation after the Second World War. The Vestia Association had 100 years’ social housing experience in which they provide support and have regular consultations with the tenants. The International Relations Officer also highlighted the fact that they had transferred their knowledge to South Africa and had played a supportive role in setting up housing associations in East London. The delegation was shown another video presentation by the Project Manager, Ms Matine ter Velde, who works for a housing project called “Hoogvliet” with 17 000 houses which were built in the 50s. About 5 000 houses were to be demolished and better houses would be built as they now needed bigger and better houses with a variety of social services and more parking space. Ms Matine ter Velde warned the South African delegation to be careful of the previous mistakes made by the Netherlands.
The Financial Manager, Mr Joop Ras, made a presentation on the financial problems regarding the management of the housing projects. The delegation also interacted with the Chief Executive Officer of Vestia, Mr Eric Staal, about his experience with social housing in South Africa.
Mr Vincent Smit and Ms Sandra Kessels from the Advisory Council in the Ministry of Housing also made a presentation to the delegation on the Debate and Perspective in Social Housing in the Netherlands and their specific role in South Africa. All copies of the presentations were circulated to the delegation.
The delegation thereafter visited the Hague Municipality and received another presentation on Social Housing: Housing Stock in the Hague, Urban Policies and Regional Planning by Mr De Rouw and Mr Teule at the city hall at The Hague. Copies of the presentations were circulated to the delegation. The delegation thereafter visited the housing projects in the city centre. The region of Hague has nine (9) municipalities. Most of the housing projects were built close to the sea with a lot of parks. People who live there were low income and middle income groups. There were 230 000 houses, of which 18% catered for single parent families. About 72% of the houses were in the low-income category and 28% were in the more expensive category. All the apartments were owned by the housing associations under the concept of “building for the neighbourhood”, meaning the low-income groups with multi-cultural neighbourhoods.
DAY 3
On 15 June 2005, the delegation visited the offices of the Ymere Housing Association in Amsterdam, whose slogan is “Passionate About Housing”. The delegation was welcomed by the Chairperson of the Board, Mr Lex Pouw. Ymere is one of the largest housing associations in the Netherlands which manages 47 000 rented homes, retail properties and business spaces. It also develops new homes within the private and rental sector. Ymere was founded in 1950 and takes part in various quality of life projects which they initiated. Their main focus is housing for the elderly people and also for the physically challenged individuals. They also develop and manage business properties. The Ymere Housing Association is also involved in a housing project in South Africa (Buffalo City) in East London, through a company called “Own Haven Housing Association”. A video presentation was shown to the delegation in which challenges faced in sustaining housing development in South Africa were highlighted, and these included the non- payment of rent and the interference by politicians in the housing sector. The delegation also received a presentation on Urban Regeneration by Dr Harry Platte.
The delegation thereafter visited the Ijburg housing project which is situated at the sea front. The Ijburg housing project has houses built on land that has been re-claimed from the sea.
The delegation also visited the Dutch Union of Tenants which has 7 000 individual members. In her presentation, the Director, Mrs Maria van Veen, pointed out the challenges that faced the Union. However, she stated the fact that they had a good working relationship with Vestia, which is one of the largest Housing Associations in the Netherlands. She also highlighted their achievements, which included bringing about a huge increase in rent subsidies, negotiating a standard compensation figure of €500 for people who had to be relocated during the renewal of projects and bringing about a law which forced the landlords and tenants to discuss issues together which affected them mutually. A copy of the presentation was circulated to the delegation.
DAY 4
On 16 June 2005, the delegation visited the offices of the Central Fund for Housing in the Netherlands and received a presentation by the Managing Director, Mr Jan van der Moolen. Mr van der Moolen made a presentation on “Tiers of Financial Support in Housing in the Netherlands”. The Central Fund for Housing was established in 1988 and serves housing associations only. The Central Fund for Housing is an independent governmental organisation, which plays a supervisory role. It is funded through compulsory contributions from the housing associations. Its Board members are older people with a lot of experience in the housing associations and are appointed by the Minister of Housing. Copies of the presentation were circulated to the delegation.
The delegation thereafter visited the Dutch Parliament where they had a meeting with two Members of Parliament, Messrs Staf Depla (Labour Party) and Bas-Jan van Bochove (Christian Democratic Party) and a Committee Clerk, Mr Mark van der Leeden. The Members of Parliament also served on the Committee on Environmental Planning and Housing. They stated that the committee meets every two weeks to discuss correspondence and/or statements by the Minister of Housing. They highlighted the fact that people who cannot afford to pay rent are paid subsidies by government to assist them to pay rent. People buying houses also qualify for a housing subsidy. In the Netherlands, more emphasis is paid to rental housing. Parliament’s view on social housing was that social housing companies are very important as they build and re-new houses for the sick, the aged and the low-income groups. Although they are private companies, they seek to achieve public goals. Lastly, because they are private, the Board of Directors controls them.
The delegation also had an opportunity to tour the parliament building and visited the parliamentary chamber.
DAY 5
On 17 June 2005, the delegation visited the offices of Aedes and the Dutch International Guarantees for Housing (DIGH), a foundation that mediates in the financing of public housing projects in transitional and developing countries and was established by a number of Dutch housing associations. DIGH reviews the loan applications and presents the outcome to Dutch housing associations and municipalities. Dr Erik H Beijer made a presentation on the Financial Structure of the Dutch Public Housing Sector and copies of the presentation were circulated to the delegation.
In the same offices the delegation also received a presentation from the International Relations Officer, Ms Tineke RI Zuidervaart from Aedes, on Dutch Social Housing in a Nutshell. “Aedes”, meaning a house with many rooms, is a federation representing housing associations. Ms Zuidervaart stated that the involvement of Aedes in South Africa is on two levels, namely, through the Memorandum of Understanding (MOU) and has also financed two (2) Technical Advisors. Within the housing stock, the proportion of dwellings belonging to owner-occupiers, in particular, is growing. In comparison with most European countries, home ownership in the Netherlands is still limited. Aedes’s main aim is to house all those in need of special care and it also involves tenants in policy and management. Housing allocation is done according to a system which takes into account the tenant’s history as a rental client, their credit worthiness, etc. Copies of the presentation were circulated to the delegation.
CONCLUSION In summing up the study tour, the International Relations Officer, Mr Huib van Eyk from the Ministry of Housing, expressed his happiness for the opportunity of accompanying the South African delegation for the whole week on visits to the housing projects. He also stated that it was his longest to accompany a delegation from another country. The Chairperson and members of the delegation thanked the Dutch people for hosting them and for their support. She also said she wished for a continued working relationship between South Africa and the Netherlands.
The delegation returned to South Africa on Saturday, 18 June 2005.
RECOMMENDATIONS 1. The relationship between the two parliaments needs to be strengthened. 2. The Portfolio Committee has agreed to co-host the International Housing Conference with Norway (NBBL) in 2006. 3. The Portfolio Committee recommends that the National Department of Housing utilise the expertise of the exchange student, Mr Le Roy Tandy, and that the exchange programmes be continued. 4. The Portfolio Committee recommends that the government fast track the rental housing policies as a matter of urgency. 5. We recommend that we intensify the programme of co-operative housing in South Africa as we have seen its ability to build communities in Norway.
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We recommend that a starter funding be given to the housing institutions to assist emerging contractors in operational costs. These were the lessons learnt during the visit by the committee to the Netherlands, that the government for a long period of time assisted the emerging contractors.
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Report of the Portfolio Committee on Housing on the Conference on Challenges of Fire and Floods in Human Settlements, dated 16 August 2005:
The Portfolio Committee on Housing on the Conference on Challenges of Fire and Floods in Human Settlements held in Parliament, on 19 & 20 April 2005, reports as follows:
1 Introduction The Portfolio Committee on Housing held a conference on Challenges of Fire and Floods in Human Settlements in Parliament, over two days on 19-20 April 2005. 146 delegates attended the Conference from a wide variety of spheres and organizations, and Members of Parliament (MPs) from different portfolio committees/select committees.
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Conference Theme: To enhance the creation of sustainable human settlements by examining the challenges of fire and floods in these settlements.
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Conference Objectives: ( To introduce early warning systems in communities especially as far as floods are concerned; ( To analyze planning systems for settlements so as to avoid mass destruction of property when fires do occur; ( To look at non-inflammable building material as well as stoves that are amicable for informal settlement purposes; and ( To clarify roles of government and communities in taking ownership for existing policy framework.
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Opening Remarks by Ms Z Kota, Chairperson: Portfolio Committee on Housing Focus: Dialogue window of opportunity for the meetings of minds for a better tomorrow and harnessing common energy towards a common goal of sustainable human settlements. Concern: Recurrent fires and floods - every fire through informal settlements could have been prevented. Needed: Comprehensive plan aimed at addressing these issues in a holistic manner with partnerships formed with various stakeholders from different areas of specialisation.
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Key Note Address: Ms N Mfeketo , Mayor of Cape Town Challenges: ( Despite all the preventative measures and as long as adequate housing was not a reality for all citizens, there is always a possibility for disaster. No measure could be successful in an environment with unplanned settlements, as witnessed fires in Joe Slovo, which had firebreaks. ( There is a need to acknowledge we cannot go back to the old policies of influx control, plan for migration of people into our areas. Must ensure that settlements are planned and policies are such that they prevent invasion. Policies may need to be reviewed to welcome the thousands of people migrating to big cities, introducing safe cooking and heating measures. ( Municipalities need to be assisted to plan for urbanisation and migration to the city
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Statistics SA: Mr P Lehohla, Statistician-General FACT: Disasters are both natural and man-made: Fire is man-made therefore it can be managed
6.1 Challenges: ( High percentage of housing units that lend themselves to high risk ( Geographical referencing is needed to ensure rapid disaster response: need for addresses ( Volume of migration to Johannesburg and Cape Town ( Disaster prone areas are known: why are we waiting for the disaster to happen?
6.2 Discussion It was pointed out that fires constituted over 40% of the risk and that this, combined with high density housing, made a good recipe for disaster. Because the structures in informal settlements were man- made, they could be improved. It was emphasised that it is imperative to have proper planning of informal settlements.
- Paraffin Safety Association: Ms N Ahmed, Managing Director
Challenges: ( No quick fixes, paraffin related incidents cost tax-payers millions per year. People that use paraffin have little choice over the cooking utensils and fuels they use, and use it because it is low cost. ( Sub-standard paraffin stoves are the norm, with an initiative to design a safe stove. It is a problem that the unsafe stoves and fuel in unsafe containers is used until then. ( Possible legislation for the removal of paraffin stoves. Local government and provincial government must pressurise national government to legislate and improve paraffin stoves. ( Portfolio Committee on Housing needs to call SABS to account and ask what is happening with the process of reviewing stove standards. ( What is city and province’s statement of intent within framework to address preventable disasters, as people will continue to use energy regardless of the structure of the house they have. Dynamics of poverty are such that people will continue to use cheap fuel source, and when talk about an integrated housing strategy need to address integrated household energy strategy.
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South African Weather Services: Mr G Schultz, General Manager Challenges and Resources: ( Hazards become disasters when people’s lives and livelihood are swept away. Nearly 90% of the economic impact of disaster in last ten years was weather and climate related. Impacts of natural hazards can be reduced through preparedness and mitigation, but people need to be informed of risks and options. It is six times more difficult to address relief actions in developing countries as hazards are linked to vulnerabilities of communities, the more vulnerable the community, the greater chance the hazard will turn into a disaster.
( Weather Service can offer hazard monitoring in real time, early warnings, risk-identification, climate records, and expert advice. Main risks in South Africa are lighting, hailstorms, floods and drought. In periods of drought we should start preparing for the next floods and vice versa. Lightning is a significant weather issue in South Africa. Preparedness and emergency management includes timely and accurate forecasts and warnings of natural hazards. Knowledge management includes further improvements in the prediction of high-impact weather and user education and awareness, to ensure that warnings are understood and acted upon. ( Rural communities experience problems with lightning and tornadoes - there have to be systems to ensure that communities are aware of the risks. ( The Weather Service is embarking on a recapitalisation plan to buy in more sophisticated weather radars, such as those used in the USA. Tornadoes are a devastating phenomenon – have models to give indication of possibility, but only half an hour lead time to give warning. Want to put in lightning system to cover whole of South Africa and cover 500m. This would probably be able to pick up lightning and movement of lightning in a certain direction. Software would automatically generate SMS to cell phone in an affected area and warn of approaching storm.
( People and communities do not always understand the weather service - they have to be reached. It is a challenge to translate jargon into everyday language. Looking at application systems to convert the science into a more application type of message. Weather Service itself cannot warn a local community – the community itself must warn its people. ( There needs to be a close relationship between the Weather Service and provincial and local governments for quick response and to prevent flooding. South African Weather Service (SAWS) issue warnings, but alerts to evacuate and life threatening situations can only be done at a local community level. Working together with disaster management to a very large extent by providing warnings to disaster management in the local communities to inform them about disasters so that they can be ready to act upon it and monitor local area more efficiently. ( Risk perception requires mapping into sociology of the community, e.g. understanding of drought might be perceived as being when crops do not grow. NB to understand the risk perception from the community’s point of view. A person in the least developed country’s chances of being affected by hazard is 400 times greater than that of a person living in a highly developed country.
8.1 Discussion Considerable concern was expressed about the need for early warning systems, particularly for vulnerable people in rural areas. It was also noted that warnings were not always understood and therefore not acted upon. A number of delegates agreed that there was a need for better communication with communities and local authorities. It was also noted that weather services around the world were co-operating on better early warning strategies for natural disasters.
- Role of the Province in managing disasters: Ms M Murris (Western Cape Director: Disaster Management and Fire Brigade Services)
9.1 Challenges and resources: ( We can be as prepared for disasters as we want to be, but if we do not look into people’s living conditions, it will always be necessary to deal with the impact of fire and natural disasters. 9.2 At present: In the Western Cape, there are six focal areas of implementation of the Disaster Management Act: • Development of a provincial framework: developing draft provincial framework and bring that in line with the National Framework, consulted and published during this year. • Establishment of a Disaster Management Centre: secured co-location with EMS and Traffic, obtained suitable site for the Centre (on premises of Tygerberg Hospital), and obtained budgetary commitment from Treasury and looking at an official launch during 06/07. It is Important that we are not approaching disasters alone, and working on a process to capacitate particularly district municipalities in a similar format. • Development of Disaster Management Plans: developed and implemented an IT management system, compiled a holistic hazard assessment in the province, and implementation of provincial key performance areas (KPAs), namely disaster management planning risk reduction and preparedness; and disaster response, recovery and rehabilitation and reconstruction. The Department has picked up flooding patterns, for example; and is now able to predict the times at which flooding is likely to reach certain areas. Are we experiencing communication problems to make the system fully functional, and have we currently opted for satellite communications? All land-based communications tend to go down once there is a disaster.
• Appointment of the Head of the Centre.
• Establishment of intergovernmental committee, chaired by the MEC of
Local Government, after publication of the provincial framework.
• Establishment of Provincial Advisory Forum, chaired by Head of the
Centre. The long term goal is to reduce disaster-prone areas,
communities and households, making communities safer, with the
emphasis on disaster prevention and mitigation, and to prepare for
efficient and effective disaster management preparedness, response
and recovery structures, systems and mechanisms. This needs the
commitment of municipalities as the implementing agents.
( Embarked on a training initiative (TEAM – training, education,
awareness and marketing), a pilot production to enhance the risk
reduction and coping skills of the residents in the ten most
vulnerable areas in the Province through training and education
interventions tailored to specific hazards and risks faced by
communities.
( Need early warning system for floods, and focused on areas where
invariably people have settled on low lying ground that was vacant
because on flood line, they don’t have an alternative even if they
get an early warning – this is where disaster management needs to
play a role.
( Removing people from the areas that have not proved a solution.
People tend not to want to move away, and the situation arises when
women and children are accommodated in community halls and so on,
but men remain behind to look after their property.
( Over-crowding will lead to fire.
( Breaking New Ground Plan – the N2 Gateway project is the pilot
for the plan, this housing for 22 000 families, and this will be
providing new housing and dealing with in-situ upgrading of
informal settlement areas. Also need to look at de-densifying
informal settlement areas.
( Standard of RDP houses.
( Veld-fires - started by unknown persons and spread to
residential areas - need
or firebreaks. This is a matter that boils down to policing as
well.
( Affected communities must be involved in decision-making.
( Road flooding, e.g. in Western Cape.
( Need to bring planning legislation and disaster management
legislation closer.
( Fire-resistant and durable products need to be used.
9.3 Discussion Evidence indicated that fires in particular were very costly. A suggestion to ban paraffin stoves outright was supported, but it was pointed out that enforcement of any legislation was a challenge in this respect. The legislative route had been followed, and the sale of unsafe paraffin stoves would be prohibited.
It was agreed that there was an urgent need for resources to be made
available for early warning systems to enable communities to become
pro-active in respect of disasters. Problems would continue to arise
while the housing problem persisted, as most vulnerable settlements
were either below the flood line, or within over densely populated
areas. Upgrading of the Western Cape’s informal settlements had
already been identified as a priority by the provincial government.
Delegates also addressed the problem of the poor standard of RDP
housing. Unfortunately there were no quick fixes, but the Department
of Housing was working on interim relief programmes, particularly for
disasters.
- Impact of Fires and Floods In the City of Cape Town: Mr G Pillay, Manager: Disaster Management
10.1 Fires: Challenges ( Victims of fires place belongings in the roads outside their dwellings to protect them from the fire, in the process obstructing the passage of emergency vehicles trying to reach the scene of the fire. ( Need for sufficient vacant space within and between informal settlements is a key safety requirement ( Infrastructural damage as well as personal loss cost implications of the huge costs of emergency, medical and other disaster relief services ( Fires originating from informal settlements often posed a threat to formal housing such as hostels surrounded the by the affected informal structures. ( The loss of livelihoods in informal settlements was potentially substantial as no accurate statistics were available on the number of jobs created by informal settlements
10.2 Floods: Challenges ( Safety and security concerns for emergency relief workers, and anger generated by incidents ( Need to supply counselling and support personnel to victims ( Education of community on flood threats, and buy-in and enforcement required ( Registration of persons on the scene ( Integrated Development Plan (IDP) needs to be aligned with disaster relief management plans of the municipality • Disaster Management Act 2002 is good legislation but needs to be implemented properly.
10.3 Discussion It was emphasised that partnership was key, and in this instance, the Department of Social Services worked in close co-operation with the City of Cape Town and various other organisations. Reference was also made to the human and emotional cost of disasters, with particular reference to the fires in the Joe Slovo informal settlement.
Mention was also made of the dangers faced by emergency relief
personnel, such as fire fighters. It was also important to have
preventative measures in place and, once more, enforcement was
raised as problematic. As in previous discussions, communication and
co-operation were essential. In addition, community based risk
assessment programmes were being undertaken, and it was hoped that
this would address some of the issues.
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Disaster Management Act: Mr L Buys, Executive Manager: Disaster Management, National Department of Provincial & Local Government (DPLG) 11.1 Challenges: ( Policy and strategy must target the most vulnerable and the interventions should be co-ordinated. ( Disaster Management Act - good but the Bill needs to be implemented
( Challenges to the implementation of the Act: Financial constraints Lack of qualified personnel Co-ordination ( Turn around time for housing assistance too long and could lead to arson ( Need to increase helicopter capacity
11.2 Discussion A number of delegates stated that municipalities lacked the funds to address disaster management. Other delegates pointed out the need for municipalities to incorporate disaster management in their IDPs as required by the Act. It was recognised that disaster management was a new discipline in the country, and that training was vital.
- National Department of Housing: Ms J Bayat, Director: National Housing Programmes
12.1 Challenges: ( International experience shows that communities in informal settlements are vulnerable to environmental hazards, nature and location of the settlement and external threats from outside the settlement. ( Design of urban policies - are they sufficiently well designed to prevent disaster and are there adequate mechanisms in place to respond to disasters, and can sufficient resources be mobilised for post-disaster reconstruction. If the funds are available, why are they not filtering down? ( In planning for sustainable human settlements, need 4 essential elements: space (land – is there sufficient space); economy (ensure there is a good economic base); governance; and the environment (not only the trees etc but also how children are raised, safety, the quality of the soil, etc.). ( People need to be given safe neighbourhoods and sustainable human settlements. Currently over 1.45 million households are in informal settlements. Victims of floods and flooding come essentially from there. ( Over 12% of the households living in freestanding informal housing are most often located on the periphery of the city. People have no services, and it is inappropriate land for settlement. Sites are on steep slopes (Inanda in Durban), flood planes (Alexandra, Johannesburg), close to mind dumps (East Rand near Johannesburg), close to heavy industrial areas (Wentworth in Durban), landfill sites settlement. All of these contribute to the vulnerability of people in these settlements. The materials used to build the structures are prone to rapidly spreading fire, they collapse and are a health risk. ( Government Departments need to come together (DPLG, Housing, Health and Social Development) to formulate relevant policies, put into place early warning systems for preparedness, address accidents in the home and settlements and ensure that capacity building happens at all levels. Need to ensure that relevant legislation and systems get buy-in from stakeholders – communities need to be involved. ( It is a sensitive issue to remove shacks and relocate persons. ( Lack of capacity in local governments and a need for a huge capacitation exercise for local government.
12.2 Discussion The issue of shack lords and shack farming was recognised as a particularly thorny one. It was mooted as an option for local government to do in situ upgrades of informal settlement areas, rather than relocate residents. There was inter-departmental co-operation between the Departments of Housing and DPLG on the issue of ongoing migration, amongst others. It was further noted that some issues had to be addressed by communities themselves, rather than by government.
- Department of Water Affairs and Forestry: Mr A Muller, Director General
13.1 Challenges: ( In an impoverished environment, any number of steps we have moved forward in the eradication of poverty can be wiped out completely by a single fire or flood event. ( Risk reduction measure: what can be avoided and how? What are mitigating measures and do we have the means to do this? ( It appears that recreation is more important than human lives - relates to planning. ( If faced with the situation where there already has been development and very expensive to move that development, can we mitigate the situation? ( Need to beef up ability to control development below the floodline. This is a challenge – how can it be effectively applied. ( Funding - have national disaster management structure and national disaster management fund, but procedures need to be streamlined. ( Technical challenges include structural measures, such as flood absorption dams, active flood warning systems and community river watch systems. South Africa has good network of flood warning systems, but it is questionable that these are adequate. The social challenge is also important – a need for alternative accommodation, and the involvement of traditional and community leaders. ( The extent to which South Africa has met the objectives set by the UN General Assembly in 1989 when they declared the period 1990 - 2000 as the International Decade of Natural Disaster Reduction.
( Municipalities need capacity to address river bank management,
because to a large extent what happens upstream in the river will
have an impact on what happens downstream.
13.2 Discussion It was noted that dam owners were responsible for the dams in their care, although this was monitored by the Department of Water Affairs & Forestry (DWAF). It was suggested that vulnerable areas be used for recreation, where flooding would not pose a threat.
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Fires: A case study – Joe Slovo settlement – Councillor Gophe 14.1 Challenges: ( Strong South-Easters prevent firebreaks from performing their role ( Communities need to be close to work
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Floods: A case study – Overberg: Councillor S Mentile / R Stevens 15.1 Challenges: ( Who maintains the rivers - this affects work on river banks ( Communities put blame on government and feel is their problem to return communities to same way. ( How schemes are built - need provision for services in each area.
DAY 2: 20 April 2005
- Council for Scientific and Industrial Research (CSIR): Mr K Yates, Forensic Fire Investigator 16.1 Challenges: ( Lack of scientific evidence and knowledge of disasters in informal settlements need to distinguish between arson and accidental fires. ( Fires not properly investigated, there are criminal acts disguised as paraffin stove accidents. ( Flammable mattresses, fuels used, fire level suppression, socio- economic factors, geographical and meteorological factors etc. ( Need for adequate planning in informal settlements i.e. more space between dwellings to allow easier access to disaster response vehicles and personnel. ( Need to involve community and local risk perceptions into disaster management policies.
16.2 Addressing the Problem ( Solutions must be cost effective and socially acceptable. Involve all relevant role players and stakeholders, like SANDF, Fire Brigade etc.
16.3 Discussion It was noted that fire investigation was a new science in South Africa, and a scarce resource. It was noted that inter-sectoral co- operation was needed, and that research had to be co-ordinated. Research was essential so that the true causes of fires could be addressed. One of the delegates raised the fact that many victims die after the fire, and their deaths are then not attributed to it, thus contributing to under-reporting.
- Department of Provincial and Local Government (DPLG): Ms X Sibeko, Chief Director: Public Participation & Empowerment 17.1 Challenges: ( Lack of physical infrastructure hampered service delivery, e.g. how to provide free basic electricity to informal settlements. ( Community participation essential to ensure success in service delivery. ( Alternative measures of providing basic services such new billing technologies were being investigated. ( Poor municipalities did not have an equal revenue base with affluent communities. ( Reality that poor people rely on multiple sources of energy; i.e. would use paraffin instead of electricity.
17.2 Discussion It was an ongoing problem that municipal accounting systems were inadequate. This contributed to excessive use of alternative sources of energy by poor communities. It was noted that the provision of electricity did not necessarily eliminate the use of paraffin, as this was considerably more cost effective. Once again, delegates raised the need for communication with communities, and the need for effective community participation in decision-making and disaster prevention.
- Commission 1: Cause, effect and prevention of fire, floods and disasters in human settlements
18.1 Consideration of a variety of aspects • When looking at a proposal for a prevention strategy, it’s important that there are different aspects that need to be considered, e.g. sociological, economic, political, environmental and technological factors. • A process needs to be followed in terms of investigation, design and development, early detection and empowerment, and seasonal changes. Risks related to timeframes to be investigated.
18.2 Appropriate Planning • A proper budget has to be made available for new settlements with sufficient money to cover cost where disasters occur, and for programmes that will be geared to reduction and elimination of risks. • More money needs to be available for the various municipalities, e.g. Cape Agulhas and Johannesburg, to roll out their plans • More money would also facilitate the clear implementation of the IDP plans. • A disaster management plan needs to be put in place for each province. • Appropriate developed institutional structures that would enable municipalities to fulfil their function of disaster management • Municipalities need to be kept informed of the migration patterns of people into their areas, in order to be able to plan appropriately.
18.3 Policy Interventions • Existing legislation to be enforced and new legislation to be prioritised. e.g Veld and Forest Fires Act which in fact makes provision for the establishment of a fire protection forum. • Also Inter-ministerial Disaster Management Committee • Disaster Management Act 2002 –SALGA has asked for a progress report by municipalities by end of April 2005, on the implementation of the Act
18.4 Risk Reduction Management System
• In addition to the prevention plan, we need to acknowledge that
risks, hazards and vulnerabilities cannot be eliminated completely,
but municipalities need to have a clear risk reduction management
system in place.
18.5 Service Delivery to Risk Areas • There has to be consistent service delivery, e.g. refuse removal, as well as maintenance of services rendered.
18.6 Research • Relevant research that will inform hazard and vulnerable risk areas in human settlements.
18.7 Capacity building • Capacity building through training for ward councillors and ward committees is essential as these are important people in the implementation of legislation. This must be applicable to all spheres of government. • There needs to be ongoing community education about risks, hazards and vulnerabilities in their communities.
- Commission 2: Provision and Construction of Safe Houses (Where, How and What Building Materials Are Used)
19.1 Lack of Adequate Data or Information Systems on Areas Prone to Disasters Preventative and Causal Effects) 19.2 Proposal: There is a dire need to do the following: • Promptly collect relevant data on areas (Urban/Peri-Urban and Rural) that are prone to disasters (Floods or Fires). • Ensure that the gathered data is turned into a user-friendly data-base catering for specific preventive and causal mechanisms • Ensure that the necessary resources and capacity, available for this processes, are used optimally to cater for disaster prone areas • Ensure that in areas where there are no capacity or resources, such resources are made available by competent authorities (individually or collaboratively)
19.3 Lack of Suitable land to settle people from disaster prone areas 19.4 Proposal: Ensure the existence and use of a Land Identification, Acquisition and Development Programme: • Land acquired through negotiations with Municipalities and Public Entities; • Suitably located Land identified and acquired from Private individuals (Negotiated settlements or applicable appropriation – qualified public need with no other alternative); That should be the area that is highly prioritized • Serviced sites for persons to be relocated (Qualifying Government Beneficiaries – Land, services plus Top Structure; Non-Qualifying Beneficiaries – Serviced Sites: People (Bank Defaulters; previous home owners etc) afforded an opportunity to construct own structures within applicable quality control measures; • Preventative measures ensuring No-Unplanned Land Occupation – The demise of mushrooming informal settlement that end being areas prone to disasters
19.5 Lack or limited levels of Community Consultations on proposed developments to move away from disaster Prone Areas 19.6 Proposal: For every programme, planned, developed and implemented with regard to human settlement development (Taking preventive or causal measures on disaster prone areas), there must be prompt and relevant consultation with Ward Councillors/Officials/Committees etc: • Identified and confirmed Areas prone to disasters • Levels of involvement – complementing administrative bodies operational in affected areas or likely to be affected
19.7 Minimal Compliance, Irrelevant or too Rigid or Absent
19.8 Proposal: Ensure that compliance authorities such as NHBRC, SABS etc take into consideration the following:
• Exact Needs: Identified, investigated and confirmed areas with regard
to related development;
• Use of Alternative/Indigenous Building technologies e.g. What works
for rural areas vs. urban areas; fires that are experienced in rural
areas must be catered for. 19.9 Lack or Minimal Collaborative Prioritization & Monitoring
19.10 Proposal: Areas to be prioritized as per area of need: • Confirm areas of need; • Oversight bodies monitoring
20. Commission 3: The Use Of Energy Sources In Preventing Disasters
• There are a number of existing strategies, but they need to be
integrated into a national household energy strategy
• Currently, reactive approach to disaster management. There is a
need to focus on risk reduction strategies, which are more long-
term.
• Ongoing education and training of communities and the
strengthening of community leadership is important.
• Stakeholder identification to ensure integration: Fire Services,
Local Government, Communities, business, Department of Health,
Department of Education, SABS
• Risk mitigation activities already being undertaken by
communities - need to identify, explore and support these.
• Need for Parliamentarians to be cognisant of research results as a
basis for action
20.1 This Conference called Develop from existing strategies a national integrated household energy strategy for low income households that: on the government to: • Ensures that citizens have sustained access to affordable, clean and safe energy that does not cause damage to their health and well- being, nor the environment • Ensures that all the necessary legislation and enforcement mechanisms exist that allow households to reduce risks • Ensures that users have the necessary information to use energy and appliances safely • Ensures that all low-income houses built should be designed in a way that takes cognizance of the reality that poor households use multiple fuels for their domestic energy requirements • Ensures that all low-cost housing be energy efficient, with sound ventilation • Need to fast-track developments in alternative energy like solar, wind to allow users freedom of choice • Ensure development of standards for enforcement, and ongoing monitoring of enforcement.
- Commission 4: Developing An Integrated And Holistic National Disaster Prevention Strategy
21.1 Disaster Management Act The commission agrees that the Act is a brilliant piece of legislation but must become a living document. The DMA creates an enabling environment for the prevention and management of disasters by all spheres of government. Policies and strategies must cascade into practical and feasible Action Plans and Procedures for the execution at community level. ( Enabling environment especially at operational level ( Report directly to the municipal manager ( Own budget allocation
21.2 Community Empowerment ( Paradigm shift to empower communities for the first response mechanism; ( Training and educational modules on disaster management; ( Volunteer recruitment on a number of modules, must be registered to qualify for insurance an out of pocket expenses, they also qualify for S&T at level 12 (Deputy Director) ( Note: compensation vs payment
21.3 Funding strategy ( Equitable share formula include disaster management ( % of the National Contingency Reserve Fund to be put aside for disaster management – Presidency? ( Inter Ministerial Committee chaired by Departments of Provincial and Local Government and Housing to place the issue of disaster management as a standing item on its agenda, this will allow for coordinated interventions by government across spheres.
21.4 Partnerships ( Public/public to include civil society structures ( Public/private ( Innovative systems to be encouraged using Municipal Infrastructure Grants 21.5 Interim Measures The gap between formal and informal housing needs to be narrowed. In the short term: ( DOH must set minimum standards for housing victims of disasters; ( Temporary must be defined so that it does not exceed 4 months In the medium to long term: ( An innovative product must be designed which must be cost effective with non-flammable materials, to be the temporary structure.
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Department of Minerals and Energy: Ms L Xingwana, Deputy Minister It was the Department of Minerals and Energy‘s responsibility to ensure that people had access to energy. Paraffin and paraffin stoves had been identified as major causes of injuries and death The Department should act to prevent these disasters given that these products were regulated by it. The government had provided free basic electricity to millions of people. Alternative sources of energy had to be provided to those who did not have access to electricity. The use of Liquid Petroleum and Gas (LPG) would greatly diminish the health and safety risk associated with other fuels. The Department was negotiating with the oil and gas industry with to view to making gas more affordable. She pledged her Department’s support to the Committee’s activities.
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Adoption of the Declaration The Deputy Speaker of Parliament, Ms G Mahlangu-Nkabinde, led the conference in adopting the Declaration (herein attached).
DECLARATION
NATIONAL CONFERENCE ON CHALLENGES OF FIRE AND FLOODS IN HUMAN SETTLEMENTS: 19 -20 APRIL 2005, OLD ASSEMBLY CHAMBER, PARLIAMENT, CAPE TOWN
We, the representatives of diverse sectors of our South African society, assembled at the Old Assembly Chamber in the National Parliament of the Republic of South Africa, from 19 to 20 April 2005, under the theme “Challenges of Fire and Floods in Human Settlements”, are propelled by a burning desire to create sustainable human settlements in our country.
We note that this historic conference has brought together people from different backgrounds, carrying a wealth of knowledge, expertise and experience in the areas Fire and Floods in Human Settlement, accordingly acknowledge the immense contribution made by the first Minister of Housing, the late Joe Slovo and this year we mark the 10th Anniversary of his death.
We reaffirm our unflinching commitment to prevent fire and floods in human settlements and commit ourselves to enhance the creation of sustainable human settlements by tackling the challenges of fire and floods in these settlements.
At the beginning of this conference, we noted that the physical devastations, emotional effects and financial implications of fire and floods in human settlements have catastrophic consequences for poor people living in these settlements, and accordingly challenged all of us that through our actions, to prevent these environmental hazards.
We recognise the reality that housing is one of the greatest challenges facing the poor communities in South Africa and accept that the extent of this challenge does not only derive from rural to urban migration and the enormous size of the housing backlog, but also accept that the problems of fire and floods in human settlements is exacerbated by the desperation of the homeless to find themselves adequate shelter fit for human habitation.
We observe that despite monumental achievements South Africa has made during the First Decade of Freedom to provide access to adequate housing, particularly to poor people, housing still constitute a daunting challenge facing South Africa and that the proliferation of informal settlements makes this form of shelter a major contemporary urban residential landscape.
We further note that many people are still living in backyard shacks erected on residential properties in formal legal townships and in free standing informal settlements clustered as informal structures where unemployment, diseases, poverty and crime are rife.
Accordingly, many people resort to living in informal settlements as a result of the enormous housing backlog. As such, these people in these settlements suffer severely from lack of proper maintenance of urban infrastructure and services; inadequate shelter; social dysfunctionality; poor sanitation; environmental degradation and poverty which at some point reach crisis proportions.
The outbreaks of fire and floods compound these problems. We realise that poor communities especially those in informal settlements are vulnerable and exposed to environmental hazards especially fire and floors because among others they use energy sources that are often harmful to their health and detrimental to the environment; they do not take preventative measures against floods; and they lack the necessary training and knowledge to deal with these hazards whenever they occur.
In line with government’s integrated, comprehensive housing strategy i.e. “Breaking New Ground”, which seeks to create sustainable human settlements, we assume collective responsibility to help and advance the spiritual and material well being of poor people, especially those who are often ravaged by fire and floods in human settlements by embarking on determined and drastic actions and measures necessary to tackle the problems on hand.
We reaffirm our pledge to place particular attention to, and give priority to focus on the challenges to prevent fire and floods in human settlements. To achieve this goal, this National Conference resolves to: • Take joint actions and improve efforts to work together at all levels, united by our determination to prevent fire and floods in human settlements; • Ensure that all the necessary national legislation, policy and regulatory frameworks are created to regulate, control and prevent fire and floods in human settlements; and where these frameworks are available, they have to be enforced; • Strengthen partnerships between all sectors of our society including government, non-government organisations, community based organisations, the private sector to take drastic actions to create sustainable human settlements; • Develop national funding programs which aimed at both emergency relief and disaster management and prevention and ensure that the equitable share and the contingency reserve funds incorporate disaster management budget; • Encourage the use and development of safe alternative fuels and other energy sources and focus on long-term risk reduction strategies; • Provide enabling environments for disaster management, promote proactive fire and floods management through risk reduction programs and manage emergencies and disasters and their consequences in a coordinated, efficient and effective manner; • Develop national awareness-raising programs to prevent fire and floods in human settlements and to promote training and empowerment of people often affected by these environmental hazards; • Conduct research and collect user friendly data on all the disaster prone areas and identify suitable land to resettle communities after by disasters and put all measures necessary to prevent people from illegally occupying land; • Engage and consult all important stakeholders in disaster management especially the communities, community organisations and statutory ward committees in the planning, implementation and monitoring of disaster management programs; • Encourage government at all levels to take fire and floods considerations into account in decision making processes including the Integrated Development Planning, investment in infrastructure and financing of programs to prevent fire and floods in human settlements; • Encourage provinces to hold similar conferences on challenges of fire and floods in human settlements given the nature, occurrences and the extent of fire and floods in various province; • Monitor progress at regular intervals in terms of the implementation of the resolutions take in this Conference.
We express our deepest gratitude to all the individuals and organisations, which participated in this conference and to the Portfolio Committee on Housing for its generous hospitality, and excellent arrangements made for this conference on the “Challenges of Fire and Floods in Human Settlements”.
RECOMMENDATIONS
- The Portfolio Committee recommends that Parliament should send the report that came from the conference to all provinces and their municipalities; and that such recommendations should be taken seriously by parliament.
Appendix 1: The following members of the Portfolio Committee on Housing attended the conference: • Ms ZA Kota-Fredericks ANC (Chairperson) • Mr S Abram ANC • Ms BN Dambuza ANC • Mr TS Dodovu ANC • Mr DC Mabena ANC • Mr ZS Mkhize ANC • Mr LJ Modisenyane ANC • Ms SH Ntombela ANC • Ms MM Ramakaba-Lesia ANC • Mr GD Schneemann ANC • Ms NJ Ngele ANC • Mr MR Sonto ANC • Mr AC Steyn DA • Mr RB Bhoola MF
Delegates at the Conference
| R | Abdullah | ANC Women’s League | |
| N | Ahmed | Paraffin Safety Association | |
| N | Bavuma | Development Officer | |
| J | Bayet | National Department of Housing | |
| X | Bebula | Rural Housing Loan Fund (RHLF) | |
| C | Beer-Winkel | City of Cape Town | |
| S | Brown | Nelson Mandela Metro: Disaster | |
| Management | |||
| N | Caluza | OR Tambo District Municipality | |
| S | Carstens | DDG: Department of LG & Housing | |
| V | Charlton | Working on Fire | |
| T | Diko | Department of Housing | |
| M | Dlabantu | Department of Housing | |
| B | Drost | Department of Housing | |
| R | Duncan | T Homes | |
| T | Gebashe | Umzimvubu Municipality | |
| H | Gcuwa | ANC Women’s League | |
| M | Gillion | ANCWL: Overberg | |
| X | Gophe | City of Cape Town | |
| D | Gopie | Malibongwe Women Development | |
| S | Gouws | Women’s Global Network | |
| V | Gusha | African Green Heat | |
| R | Hoogbaard | Northern Cape: Department of Housing | |
| T | Human | Thubelisha Homes | |
| P | Johnson | BFT/Siyanda oil (Pty) Ltd. | |
| M | Joka | SANCO | |
| B | Jones | Children of Fire Trust | |
| R | Kgware | Ebuyile/ EMP Holdings | |
| M | Kosile | SANCO | |
| I | Le Roux | Women’s Global Network | |
| P | Lehotla | Statistician General | |
| N | Lwana | Western Cape | |
| S | Mabutho | Women’s Global Network | |
| T | Magopane | Imbaula Factory | |
| P | Maluleke | The Banking Association of SA | |
| B | Maningi | Umzimvubu Municipality | |
| D | Maphosi-Guy | Peer Africa | |
| S | Maqetuka | Western Cape | |
| L | Maralack | North West: Department of Social | |
| Services | |||
| T | Marimane | Department of Housing | |
| U | Marshall | Bellevue | |
| N | Matebese | Nelson Mandela Metro Municipality | |
| N | Matinise | Metro Region | |
| N | Mbele | ANC Youth League | |
| P | Meko | Eastern Cape Province | |
| T | Memani | Chris Hani Municipality | |
| M | Menisi | Western Cape | |
| E | Mentile | Overberg | |
| K | Mkhize | Western Cape: Social Services | |
| P | Mlonyeni-Guz | OR Tambo District Municipality | |
| ana | |||
| D | Mntungwa | Department of Water Affairs | |
| B | Modisakeng | Tshwane Metro | |
| P | Moeng | Delivery Magazine | |
| R | Mojalefa | Department of Social Development | |
| S | Mkhize | Kwazulu-Natal | |
| P | Moko | Eastern Cape: Local Government & | |
| Housing | |||
| R | Molefe | Social Development | |
| M | Moroka | Servon Housing Solutions | |
| J | Morrissey | Livelihoods Programme | |
| E | Mothelesi | Kimberley Local Government & Housing | |
| F | Msila | SANCO | |
| N | Msuthu | SANCO | |
| LP | Mulaudzi | Limpopo Local Government & Housing | |
| S | Mxolose | SALGA | |
| NF | Ndandani | Councillor: Ward 42 | |
| E | Ndlovu | Councillor Johannesburg Metro Council | |
| M | Ndou | Ibuyile/ EMP Holdings | |
| P | Nel | Women’s Global Network | |
| N | Nika | SANCO | |
| D | Nozizwe | ANC Women’s League | |
| A | Ntebe | Western Cape: Department of Social | |
| Services | |||
| C | Ntotoviyane | City of Cape Town | |
| M | Oliphant | Kwazulu-Natal | |
| J | Olivier | Imbaula Generation | |
| T | Papu | Eastern Cape Local Government & | |
| Housing | |||
| B | Paton | Pietermaritzburg: Fire and Disaster | |
| D | Petros | Africa Green Heat | |
| G | Pillay | City of Cape Town: Disaster | |
| Management | |||
| J | Rikhotso | Gauteng Disaster Management | |
| E | Samuels | City of Cape Town: Department of | |
| Housing | |||
| G | Schulze | SA Weather Service | |
| P | Sekulisa | Free State Local Government & Housing | |
| B | Serema | Sizisa Ukhanyo – Cape Town | |
| R | Sherman | Liquifire (Pty) Ltd | |
| X | Sibeko | Department of Provincial & Local | |
| Government | |||
| W | Sidina | City of Cape Town | |
| C | Simo | HOPA | |
| C | Singh | Paraffin Safety Association | |
| CA | Smith | Northern Cape: LG& Housing | |
| W | Solomons | City of Cape Town: Disaster | |
| Management | |||
| L | Sonn | Disaster Management: Sustainable | |
| Livelihoods | |||
| M | Sontshatsha | SANCO | |
| T | Stefano | SANCO | |
| R | Stevens | ANC: Overberg | |
| D | Swart | Paraffin Safety Association | |
| G | Thwala | Tshwane Metro | |
| G | Truran | Paraffin Safety Association | |
| E | Van der | Tygerberg Burn Unit | |
| Mervwe | |||
| T | Vilo | Community Development Worker | |
| N | Vumindaba | ANC: Women’s League | |
| K | Yates | CSIR | |
| L | Zingitwa-Gol | Ukhahlamba Disaster Management | |
| ogolo | |||
| Mr | M Mzizi | MP | |
| Mr | T Zulu | MP | |
| Ms | MN | Oliphant | |
| Mr | N | Mthethwa | |
| Mr | RJ Tau | MP | |
| Mr | N Mack | MP | |
| Ms | BN Dlulane | MP | |
| Mr | F | Adams |
-
Report of the Portfolio Committee on Labour on the International Labour Conference, dated 8 November 2005:
- Introduction
The 93rd session of the International Labour Organisation was scheduled from 31 May to 16 June 2005 in Geneva, Switzerland. The agenda of the Conference included:
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Report of the Chairperson of the Governing Body (GB) and the Director- General
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Global report under the follow-up to the ILO Declaration on the Fundamental Principles and Rights at Work
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Work of the Committees the Programme and Budget, Application of Standards, Work in the Fishing Sector, Promotion of Youth Employment, Occupational Safety and Health.
South African delegation
Government
Mr MMS Mdladlana, Minister of Labour Dr V Mkhosana, Director-General, Department of Labour (DOL) Mr J Malatse, Executive Manager: Occupational Health and Safety, DOL Mr S Nakanyane, Executive Manager: Research, Policy and Planning, DOL Mr G Moroasi, Assistant Manager: Legal Unit, DOL Mr V Seafield, Assistant Manager: Labour Relations, DOL Ms Z Sigabi, Communications Officer, DOL Ms L Lusenga, Labour Attache: SA Permanent Mission, Geneva Mr L Gumbi, Deputy Permanent Representative: Permanent Mission, Geneva Ms T Motheohane, Private Secretary to the Minister
Parliament of the Republic of SA
Ms OR Kasienyane MP, Chairperson: Portfolio Committee on Labour Mr CM Lowe, MP Mr L Maduma, MP Ms P Jayiya, Committee Secretary
Employers
Mr V van Vuuren, Chief Operations Officer, Business Unity of South Africa (BUSA) Mr B Botha, Advisor: Internatinal Affairs, BUSA Ms A Ndoni, Member: Standing Committee on Social Policy, BUSA Ms F Dowie, Chief Officer: Strategic Services, BUSA Mr A Van Niekerk, Legal Adviser:BUSA Mr C Lotter, Occupational Health and Safety (OHS) Advisor: BUSA Ms Z Maila, Youth Advisor: BUSA Mr N Muller, Fishing Advisor: BUSA Mr R Manda, Fishing Advisor, BUSA Ms R Ramdin, OHS Advisor: BUSA
Workers
Mr I Patel, Congress of South African Trade Unions (COSATU) Mr Z Vavi, Secretary-General: COSATU Mr CA Milani, General-Secretary: FEDUSA Mr J Maqhekeni, President: NACTU Ms A Rantsolase, COSATU
The parliamentary delegation arrived in Geneva on 6 June 2005 and joined the Conference during its second sitting. The agenda of the Conference was the following:
- Governing body elections 2005-08
• Resolution concerning arrears of contribution of Armenia and the Republic of Moldova.
- Presentation and discussion of the reports of the Chairperson of the Governing Body, and of the Director-General
- Adoption of the First Report of the Selection Committee
Official opening
The meeting was officially opened by Mr Trotman (Worker Vice-President) who announced that the President was unable to attend the opening. As Acting President, he requested the Government Group Chairperson, Ambassador Yimer from Ethiopia, to propose the election of a new President for the 93rd session of the International Labour Conference.
The following persons were elected:
President: Minister Khalil, Minister of Labour:Jordaan Worker Vice-President: Mr Trotman, Barbados Employer Vice-President: Mr Fuernes, Argentina
Having outlined the procedures and identified other officers at
the meeting, the Chairperson suspended the plenary until Monday,
6 June 2005.
AFRICAN GROUP
The group first met on Tuesday 31 May, and finalised its group
spokespersons in the respective committees as follows: Committee on Finance South Africa Committee on Youth Nigeria Committee on Occopational Safety and Health Senegal Committee on Work in the Fishing Sector Namibia Committee on the Application of Standards Nigeria
Based on the program as agreed during the first sitting, the Group met daily as scheduled. The Minister of Labour from Cuba addressed the Group and solicited its support for Cuba’s Governing Body membership. The Group was better organised and, the Johannesburg Conference decision for Africa to have common positions on matters impacting on Africa is beginning to make Africa a force to be reckoned with.
Governing Body Membership
The African Union Commission on Labour and Social Affairs decided during its Johannesburg sitting, after regional consultations, to ratify proposals as agreed by regional representatives.
The following representation was endorsed in Geneva and informs the current Governing Body membership for the period 2005-2008.
Southern Africa South Africa (Titular) Malawi (Titular) Mozambique (substitute)
(See Annexure A for the list of elected Governing Body members)
Requests for permissions to vote
Armenia and Moldova requested the Committee to restore their right to vote after making financial arrangements to settle the outstanding balance. The Committee agreed to recommend to the Conference that their right to vote be restored. The Committee voted in favour of this decision on Monday, 6 June. The South African Minister of Labour addressed the plenary on 6 June . This was done by virtue of him being the current Chairperson of the AU Labour and Social Affairs Commission. He reiterated the fact that there is a need for Africa as a continent to devise comprehensive and collective means to address the problems of poverty and unemployment. He emphasised that joblessness and poverty are a threat to peace and stability.
The delegation noted the important role played by South Africa in the ILO. This was evident by it being elected as a Titular member to the Governing Body, the role it plays in the Africa group and the Minister being the Chairperson of the AU Commission on Labour and Social Affairs.
Address by the Presidents of Algeria and Nigeria
The two heads of State from Algeria and Nigeria addressed the 93rd session of the ILC on 7 and 10 June respectively.
In his speech, the President of Algeria, President Abdelaziz Bouteflika, called for a social dimension of globalisation. He also referred to the Algerian experience relating to democracy and employment, and his country’s strategy that includes fighting unemployment, particularly among the youth. According to President Bouteflika, the promotion of youth employment through the creation of micro-enterprises, micro-credit programmes, pre-employment contracts, rural development programmes and temporary employment schemes have shown good results. To fight youth unemployment in Algeria, the government has launched an integrated policy based on multi-level training activities and economic growth, stimulating and enabling job creation and employment.
Addressing the Africa Group, on 7 June 2005, President Bouteflika reiterated that Africa needs capacity for handling better dialogue among social partners. The 53 African states represented are a considerable force to make an impact in the discussions within the ILO. He welcomed the commitment to the New Partnership of Africa’s Development, and the importance of meeting the resolutions taken at the special summit in Ouagadougou in September 2004.
President Obasanjo indicated that decent work and debt relief were needed to build a “ new Africa”. The reduction of poverty and youth unemployment remains a critical challenge. The AU had taken up the challenge by emphasising skills building, agriculture, the expansion of the private sector, small and medium scale enterprise development, and retraining as ways of creating jobs for unemployed youth and adults.
Both Presidents addressed the plenary and the Africa Group.
Governing Body elections
The International Labour Conference elected the members of the Governing Body for the period 2005-08 on 6 June. The Governing body is composed of 56 regular members (28 governments, 19 employers and 19 workers). Cameroon, Kenya, Malawi, Morocco Nigeria and South Africa were elected as six regular members representing Africa.
The Conference, in terms of the Article 13(4) of the ILO Constitution, adopted a resolution concerning the arrears of Armenia and the Republic of Moldova.
2. Summary of the reports
Report of the Chairperson of the Governing Body
The Chairperson of the Governing Body of the International Labour
Office, Mr llipe Seguin, presented his report on the work of the
Governing Body covering 2004-05.
The presentation highlighted the aspects deserved special attention
that related to international labour standards. In this area the
Governing Body invited the Director-General to launch a campaign to
promote the core Conventions of the ILO, the integrated approach to
standards-related activities, the consolidation of maritime
instruments and the revision of certain constitutional procedures.
However, this past year saw the adoption of a new version of the
Memorandum concerning the obligation to submit Conventions and
Recommendations to the competent authorities, as well as an
introductory note to the Standing Orders concerning the procedure for
the examination of representations under Articles 24 and 25 of the
Constitution of the ILO.
The Governing Body had handled numerous representations made under
Article 24 and had taken decisions on the follow-up to complaints
submitted under Article 26 of the Constitution. These included the
cases of non-observance of Conventions by the Republic of Belarus and
the Governments of Venezuela and Myanmar.
In March 2005, the Committee on Technical Co-operation (CTC) examined
and approved the “ Priorities and action plans for technical
cooperation” under the ILO Declaration on Fundamental Principles and
Rights at Work and its follow-up, which focused on freedom of
association and effective recognition of the right to collective
bargaining. The action plan was based on the discussion of the Global
Report at the Conference in 2004. The CTC noted the action which was
carried out within the ILO’s biggest technical co-operation programme,
namely the International Programme for the Elimination of Child Labour
(IPEC).
In addition to the focus on technical cooperation, the year under
review was characterised by a very intense discussion of the Director-
General’s proposals for the Programme and Budget for 2006/07.
The Chairperson, on behalf of the Governing Body commended the impact
of the support the ILO gave to the Extraordinary Summit of the Heads
of State and Government of the African Union on Employment and Poverty
Alleviation in Africa, which was held in Ouagoudou in September 2004.
At recent sessions of the Governing Body, the Working Party on the
Social Dimension of Globalisation concentrated on an examination of
the best means of promoting decent work as a global objective. The
report noted that the efforts by the ILO may attest to its will to
place the Decent Work Agenda, notably, the promotion of a tripartite
approach to the framing of national and international policies at the
heart of strategies for economic, social and environmental
development. This synergy between action of the ILO to promote decent
work as a global objective and the activities of other organisations
within the United Nations family aimed at achieving the Millenium
Development Goals and meeting the targets of Poverty Reduction
Strategy, offer a clear example of the coherence that exists between
the policies recommended by the World Commission.
Report of the Director-General
The Secretary General, Mr Somavia, informed the Conference that the
global employment crisis facing the world puts democracy, security and
stability at risk and needed to be addressed as a matter of urgency.
“the global economy has evolved into an ethical vaccum” with policies
that many feel are organised too much around market values and too
little around human values. The overall effect is more insecurity and
less freedom. Concern was growing worldwide over imbalances between
globalisation and growth, and job creation. The disconnection between
economic growth and job creation must be repaired. Employment and
decent work must be moved fully into the mainstream of the
international development debate. Mr Somavia reflected on the agenda
of the ILC and supported initiatives such as efforts to help the youth
find decent jobs, address the issue of forced labour in the global
economy, to finalise a comprehensive new standard for the world’s
fishing industry, to review the impact of standards on hours of work,
and to scrutinize the application of Conventions and standards by ILO
members states.
- Summary of discussions in Committees
3.1 Finance Committee of Government
This Committee discusses and concludes the budget of the ILC. The
items discussed included the following:
• The status of collection of contributions.
• Assessment of the contributions of new member states.
• The scale of assessment of contributions to the budget.
• The composition of the Administrative Tribunal on the ILO.
• Programme and budget proposal for 2006/7
In addition to deliberating on the budget, this Committee decides on
the programme to be followed. South Africa represented the views
agreed to by Africa. The latter is the biggest contributor among the
African countries in the ILO. United States, as the biggest
contributor in the world, proposed the reduction of the budget.
The Committee conclusions were as follows:
• Endorse the expenditure budget for 2006/7
• The developing countries, particularly Africa were expected to benefit
from the ILO Technical Programmes
3.2 Committee on Safety and Health (OSH)
Introduction
In June 2003 the ILC adopted a global strategy for occupational safety
and health (OSH). The aim was to build and maintain a preventative
safety and health culture, focused on the right to a safe and healthy
environment and a systematic approach to managing OSH. The strategy
included:
- The promotion of OSH through raising awareness and advocacy;
- The ILO instruments such as standards (subject to the Committee on Safety and Health), codes of practice and guides;
- Technical assistance and co-operation on OSH;
- Knowledge development, management and dissemination; and
- International collaboration.
In July 2004 the Office produced Report IV (I), titled “Promotional framework for Occupational Safety and Health, which provided much technical background and proposals for a new instrument on promotional framework for OSH. The same report included a questionnaire about the way forward, and responses to this questionnaire were summarised in Report IV (2). The second report included a commentary prepared by the Office, together with the proposed conclusions for discussion by the Committee.
The Committee met for its first sitting on 31 May 2005. It consisted of 192 members (73 Government members, 48 Employer members and 71 Worker members). To achieve quality of voting strength, each Government member was allotted 3 408 votes, each Employer member 5 183 votes and each Worker member 3 504 votes.
The Committee elected its Officers as follows:
Chairperson: Mr A Bekes (Government member, Hungary); Vice Chairpersons: Mr C Lotter (Employer member, South Africa), and Ms P Seminario (Worker member, United States) Reporter: Mr A Annakin (Government member, New Zealand).
The Committee held 13 sittings with a view to discuss and finalise two crucial elements in the process of establishing a promotional framework on Occupational Safety and Health. According to the proposals, the Committee was expected to come up with the following during this Conference:
- Define the form of the instrument and,
- The outline of the instrument. (This relates to the nature/structure of the instrument).
Discussion
The Office made a presentation on the report to the Committee and emphasized that the discussions should culminate the form of a Convention and Recommendation.
Workers and the African Government members, as well as many European Union countries supported the proposal by the Office. The Employer group, supported by the Governments of the US, UK, Switzerland, Australia and the Netherlands opposed this proposal and indicated that they were in favour of a declaration.
After a vote on the matter, it was decided to go the route of an instrument in a form of a Convention and a Recommendation as proposed by the Office.
The committee proceeded on the remaining points of the proposed conclusions for amendments to the text. The proposed amendments were as follows:
- The inclusion of a new point titled “National Policy”
This relates to national policy forming the framework on Occupational Safety and Health (OSH) in a country.
Implications for South Africa
This area has no major impact as it is currently being addressed through the process of integrating Occupational Health and Safety and Compensation Commission competencies.
Other changes related to shifting the clause on “National System” to come before the one on “National Programme”. This was informed by the fact that the national programme is part of the implementation of the system.
National Programme
This is the implementation component which includes identifying and targeting high-risk areas as part of an OHS Programme. In the case of South Africa, these include iron and steel, construction, agriculture, food and beverage sectors, as well as the elimination of silicosis programme.
National profile
This outlines the OHS situation in a country. In the case of South Africa, the situation relates to the process of integrating OHS and CC into a single competency to deal with the problem of fragmentation, which causes inefficiency to the system.
The committee emphasised the promotion of OSH as part of the core objective on the “decent work for all”.
However, the final report was considered and adopted by the Committee on 13 June. The latter was discussed and adopted during the plenary on 16 June. The 94th session in 2006 will hold a second discussion on the matter with a view to establish a new Convention and Recommendation.
3.3 Committee on the Application of Standards
Introduction
In accordance with Article 7 of the Standing Orders, the Conference
set up a Committee to consider and report on item III on the agenda,
namely, Information and Reports on the Application of Conventions and
Recommendations. The composition of the Committee included Government
delegates, Employer delegates and Worker delegates. In addition, 34
international non-governmental organisations were represented as
observers.
The Committee elected its Officers as follows:
Chairperson: Mr Sergio Paixao Pardo (Government member, Brazil);
Vice Chairpersons: Mr Edward E. Potter (Employer member, US);
Mr Luc Cortebeeck (Worker member, Belgium);
Reporter: Ms Carine Parra (Government member, France)
The Committee considered information and reports supplied by
Governments in pursuance of Articles 19, 22 and 35 of the ILO
Constitution on measures taken to give effect to Conventions and
Recommendations. In line with the indicated Articles, the Committee’s
discussions focussed on the following:
- Report of Experts on the Application of Standards and Recommendations (Report III (Part 1A) of the 93rd Session of the ILC.
-
The General Survey Report dealing with Hours of Work (industry) Convention 1919, (No. 1) and Hours of Work, (Commerce and Offices) Convention, 1930 (No. 30).
The first area of debate focussed on the ILO’s supervisory mechanisms, (Article 19 of the ILO Constitution on adoption of the International Labour Standards and submission of the newly adopted instruments to the competent authority) and the mandate of the Committee on the Application of Standards. The Committee considered the General Survey – application of ratified or unratified conventions. The extensive debate on the hours of work survey was to ascertain whether hours of work should be fixed or flexible. By the end of April 2005, 109 states had ratified eight fundamental Conventions and 26 ratified seven.
During its second week, the Committee considered 25 individual cases relating to the application of various Conventions. The examination of the individual cases was based principally on the observations contained in the Committee of Experts’ report, and oral and written explanations provided by the governments concerned. However, time restrictions required the Committee to select a limited number of individual cases among the Committee of Experts’ observations.
Social partner representatives and a number of countries expressed their dissatisfaction on the working methods of the Committee. Most developing countries, led by Cuba, raised their dissatisfaction at the measures taken to deal with the revision of working methods. The question of transparency and fairness was raised. Developing countries felt that the manner in which countries are chosen to answer to the Committee marginalised most members from developing countries. This was viewed as an abuse of power by developed countries. Swaziland and Zimbabwe were on the list of countries that were summoned to appear before the Committee.
Emergent issues:
1. Competent authority:
Employers pointed out that the obligation to submit instruments
adopted by the ILC to the competent authorities arose from the ILO
Constitution and that the term “competent authority” referred to
the legislature. They, therefore urged Governments to comply with
this obligation and, if necessary, approach the ILO for technical
assistance. The worker representative supported this position.
-
Working method of the Committee:
The request by developing countries for transparency and a fair procedure in the identification and listing of countries to appear before the Committee was not addressed. This matter needs to be addressed as the Committee continues to engage in political matters of member states.
-
Hours of Work:
The majority of member states supported the proposal that there should be no amendments to the Conventions and that the hours of work remain as they are in both Conventions 1 and 30. It became abundantly clear in the debate that no member was opposed to the flexible observation of minimum standards.
The workers group emphasised the link between hours of work, and health and safety of workers. They highlighted the importance of recognising workers as social beings deserving time for family life and time for recreation and self-development. Members proposed that an urgent meeting of experts be called to probe further whether there was justification to tamper with the provisions of Conventions 1 and 30, and whether a new international instrument was necessary. It was agreed that the Governing Body should ensure a tripartite involvement in the envisaged process.
SELECTED INDIVIDUAL CASES
The Committee also debated the issue of respect for obligations. A number of countries listed were called to account for failing to report on their obligations. These were Afghanistan, Armenia, Cambodia, Haiti, Loa People’s Democratic Republic, Sierra Leone, Solomon Islands, Somalia, Turkmenistan and Uzbekistan.
Cambodia
A government representative indicated that the new Ministry of Labour,
with the technical assistance of the ILO, would make every effort to
submit to the competent authorities the instruments adopted at the
82nd session of the Conference. Other countries failed to respond as
they were registered but not accredited with the Committee, and
therefore could not furnish their responses. The Committee expressed
its dissatisfaction at the latter situation.
The general feeling was that some of these countries’ conditions of
conflict, poverty and lack of capacity should be considered.
Regarding countries that were on the list of violations of
Conventions, the Committee dealt with these cases in the following
manner:
Colombia: Convention 87 -Freedom of Association and Protection of
Rights to Strike
Unions had alleged that Government had deprived them of their right to
strike and their members killed. The Government had repeatedly
pointed out that the existence of the drug cartels were responsible
for these activities. The Committee Chairperson was invited to visit
the country for a first-hand experience of the developments.
The Committee condemned all acts of violence and requested the
Government to provide detailed reports on developments at its next
meeting. The Government was also requested to report on progress made
with regards to finalised murder cases
Russia Federation: Convention 87 -Freedom of Association and
Protection of Rights to Strike
The workers alleged that the current legislation was restricting their
right to strike. The process was tedious and restrictive in that a
strike could only take place with the involvement of a two-thirds
majority. Employees, especially those with two jobs, were not allowed
to strike.
Government indicated that it was in the process of amending
legislation to bring it in line with the Convention.
The Committee requested Government to take all necessary measures to
speed- up the process of finalising the legislative amendments.
Panama: Convention 87 - Freedom of Association and Protection of
Rights to Strike
The complaint related to the restrictive current legislation that
denies individuals the rights to freedom of association and protection
of rights to strike. The complaints were listed as follows:
(1) The limitation on the number of party representatives in the
collective bargaining process. This allows interference with
the autonomy of trade unions.
(2) The imposed penalty for withdrawing from a collective agreement.
(3) The imposition of conditions on the establishment of trade
unions for civil servants.
The Government argued that it had inherited the status quo from the
previous government. It is currently engaged in a process of
legislative amendments to bring the law in line with the instrument.
Technical assistance had been requested from the ILO.
The Committee was concerned that the ILO had not yet afforded Panama
the necessary assistance despite the request. It urged the Government
to resolve other problems through dialogue.
Swaziland: Convention 87 - Freedom of Association and Protection of
Rights to strike
The complaints related to the following:
* The enactment of the Internal Security Bill.
* The interference of government in trade union activities.
* The scope of the Industrial Relations Act on the Prison
Services.
Workers alleged that the existence of the Internal Security Bill was
intended to harass the unionists. They further alleged that the
Government activities led to the death of a unionist. The process
before unions could result in industrial action.
The Government responded by pointing out that there was no such bill
in existence. The process was terminated four years ago after
discontent from the general community. The Government also indicated
that it had no knowledge of any fatality during the said
demonstration, and challenged the unions to produce evidence of such a
death.
With respect to the allegation around the scope of the Industrial
Relations Act on the Prison Services, the Government contended that
the matter was under consideration in order to comply with the
Convention since prison staff is regarded as “armed forces” in the
Kingdom.
The Government further illustrated progress made seeking to
practically effect the provisions of the Convention. They indicated
that the current constitutional process in the country, which has
reached draft constitution status, takes into account the protection
and promotion of fundamental rights and freedoms.
In his intervention, the worker representative outlined their
frustrations as workers on the exclusive nature of the process of
constitutional consultations and how power still resided power in the
hands of the head of state.
Governments from almost all the developing countries supported the
Government by appreciating progress made especially relating to
amendments made in an endeavour to comply with the Convention.
Swaziland appreciated the comments made and reiterated its position
that no unionist was killed as claimed by the unions. According to
them this was further strengthened by the failure of the unions to
provide any evidence of this incident.
Both employers and workers called for Swaziland to accept a high-level
mission that would investigate the alleged killing. It should also
look into the implementation of the amendments and how these are put
into practice. Employers emphasised the need for the Government to
implement social dialogue.
Committee’s conclusion
The Committee noted that no deaths occurred during the protest action.
It requested the government to hold meaningful consultation with
social partners on the draft constitution to ensure that none of its
articles would have effect of contravening the Convention, and that
its adoption would have the effect of repealing the 1973 decree, as
well as number 11, 12 and 13 decrees. The government was also
requested to take necessary measures to eliminate the remaining
discrepancies between law and practice. The government should provide
a copy of the draft Constitution to the Committee of Experts. The
Committee also urged the government to accept a high-level mission to
establish a meaningful framework for social dialogue.
Niger: Convention 182-Worst Forms of Child Labour
The International Confederation of Free Trade Unions alleged that
Niger was practicing the worst forms of child labour in that young
girls were trafficked for domestic work and sexual exploitation,
whilst young boys were used for economic exploitation. Niger was
therefore in violation of Convention 182.
The Government of Niger argued that its country was again being
accused under this Convention. It indicated that it had ratified
eight fundamental Conventions, including Convention 182, as part of
the process of eradicating human rights violations.
However, the Government denied that the country practised child labour
as well as child trafficking within its territory. The Government of
Niger appealed to the Committee to remove its name from the list.
Several countries confirmed on behalf of the Government of Niger that
no such practices were in place in Niger and called on the Committee
to remove its name from the list.
Committee’s conclusions
The Committee shared the same concerns as the Committee of Experts
that such practices were harmful to the welfare and health of
children, and indicated that the Government should enhance its efforts
to eradicate child labour.
Recommendations made to the Government of Niger were as follows:
(1) It should ensure access to free education, especially in rural
areas.
2) It should remove all minor children below 18 years from begging
and working in the mines and quarries.
(3) It should provide additional information to the Committee.
4) Since it denies the existence of child labour, a fact-finding
mission should be carried out to establish this fact. It should
seek technical assistance from the ILO.
Turkey: Convention 87-Freedom of Association and Protection of
the Right to Organise
The Government of Turkey was accused of refusing workers, specially
those in the public sector, to exercise their right to organise
themselves and to join trade unions. Article 2 of the Convention
provides that workers without distinction have the right to organise
and to join any trade union of their choice.
The Government stated that it had already amended its labour
egislation to bring it in line with the Convention. In addition,
workers in Turkey were free to join any Union they wished within their
sectors. Turkey was in compliance with the provisions of Convention
87. The worker and employer representatives from Turkey confirmed
that there was freedom of association in their country. The listing
of their country was a surprise to them. This was conceded to by the
biggest federation in Turkey and supported by other countries.
The Committee concluded that government should put measures and
procedures in place to ensure that there is proper consultation with
respect to the ratification of Conventions. It should provide the
Committee with a detailed report of the developments. The Government
should promote dialogue with social partners and ensure consultation.
Lastly, it should seek technical assistance from the ILO.
Zimbabwe: Convention 98 - Right to Organise and Collective
Bargaining
The Zimbabwe Congress of Trade Unions (ZCTU) raised a concern around
the Government’s continued anti-trade union activities based on the
fact that the Labour Relations Act requires collective agreements to
be submitted for Ministerial approval, and be published as statutory
instruments in order for them to be in force. A provision to fix
maximum wages was still in force.
The ZCTU further alleged that the Government was not prepared to
engage in tripartite negotiations, and that the latter system lacked a
governing statute and relied on the will of the Government to be
convened.
There was a difference of opinion among other ZCTU representatives who
challenged the allegations expressed by the General Secretary. This
position was supported by the employer representatives from Zimbabwe,
who pointed out that the labour laws were very sound. They were
surprised at the allegations levelled against Zimbabwe. Zimbabwe
maintained that this development was another way of being targeted for
political reasons. The Government representative of Zimbabwe
expressed a concern at the procedures used for the selection of the
individual cases to be examined by the Conference Committee. He,
therefore, called for a review of the working methods of the
Committee, especially with regard to the criteria and reasons for the
selection of individual cases.
All African countries commended the Government of Zimbabwe for the
progress made with regard to amendments as proposed by the Committee
in 2004. They indicated their surprise at Zimbabwe being on the list
and questioned the workings of the Committee, especially with regard
to identifying countries that should appear for alleged violations.
The African position was supported by the Governments of Cuba and
China.
Some members of the Industrialised Market Economy Countries (IMEC)
suggested that the government of Zimbabwe should accept a direct
contact mission and technical assistance from the ILO in order to
bring its laws in line with the Convention.
Committee conclusions
The Committee noted that the government had informed the committee of
experts that the provision concerning Ministerial approval of
collective agreements was being amended and urged the Government to
take all the necessary measures to make the law and practice comply
with the Convention.
It further requested the Government to submit a clear and
comprehensive report to the committee of experts, which contained
information on all problems indicated in the complaint. The
Government was urged to obtain technical assistance from the ILO.
The Committee concluded its work and adopted the report, which was in
turn adopted by the Conference.
3.4 Committee on Work in the Fishing Sector
Introduction
The fishing sector had been identified as a sector that required
attention as a result of the nature of work that is performed in the
sector and the current provisions that do not apply to fishermen.
These provisions do not take into account the nature of the fishing
operations, employment relations, and other issues of social
protection.
The first discussion on a comprehensive standard (a Convention
supplemented by a Recommendation) on work in the fishing sector took
place at the 92nd Session (2004) of the ILC.
Following that discussion, the Labour Office prepared and submitted to
the governments of member states Report V (1), which contained a
proposed Convention and Recommendation based on the conclusions
adopted by the ILC at its 92nd Session.
The Committee held its first sitting on 31 May 2005. Originally it
consisted of 123 members (54 Government, 21 Employer and 48 Worker
representatives). The Committee elected its Officers as follows:
Chairperson: Mr F Riberio Lopez (Government representative,
Portugal) at its first sitting.
Vice Chairperson: Ms R Karikari Anang (Employer representative,
Ghana) and
Mr P Mortensen (Worker representative, Denmark) at its first
sitting.
Reporter: Mr G Boumbopolous (Government representative, Greece) at
its second sitting.
The Committee held 16 sittings and considered Reports V(2A) and V(2B)
as prepared by the office as the fifth item of the agenda of the
Conference.
South Africa was represented by the following persons:
Mr N Campbell (Government representative)
Mr V Seafield (Government representative)
Mr K Masemola ( Worker representative)
Mr R Manda ( Employer representative)
However, the discussions at the 93rd Session were a follow-up to the first discussions that were held in June 2004, as well as those that were held in December 2004 with a tripartite committee of experts on the fishing sector. The Committee of Experts dealt with issues such as the provision of accommodation, the construction of vessels in accordance with the provisions of the sectoral determination, noise and vibration control and other provisions of a technical nature.
The 93rd session attempted to refine the current draft, social security protection for fishers and special provisions for larger vessels.
Issues dealt with were as follows:
Special provisions for large vessels
-
The provisions on accommodation on vessels of 24 metres (in length) has to a large extent been finalised. This included issues of accommodation, mess rooms, medical care provisions and occupational health and safety provisions.
-
Since different member states use different measurement provisions, a set of equivalent measures with respect to tonnage have been agreed upon.
-
Certain provisions for larger vessels have also been extended to vessels that remain at sea for longer than three days.
Social Security
- Social security protection should be extended to all fishers in line with national legislation, policy and practice. It should be noted that the social security convention 102 of the ILO specifically excluded fishers.
-
This protection should be afforded to all fishers that are ordinarily resident in the member state, irrespective of the nationality of the fisher.
-
Where bi-national agreements exist, provision should be made that where non–national fishers choose to return to their countries, they should be able to ’take’ their benefits with them. This is only required where bi-national agreements exist or where provision is made for this in such agreements.
With respect to the position that has been forwarded at the African Union Labour and Social Affairs Commission, South Africa confident that we will meet those objectives.
The Committee discussed and finalised the text with regard to social security. This seemed to be a contentious area for the Committee as a number of member states were against the extension of social security to fishers, whether nationals or non-nationals. This was due to the contributory nature of some social security systems in certain countries.
The Committee agreed to a text that effectively accepted that the extension of social security to fishers should be done in terms of national laws, practice and regulations. The latter takes into consideration the position of individual member states on whether national legislation makes such provision or not, and is in line with the position that was agreed at the African Union Labour and Social Affairs Commission meeting. In a situation where such a right has been extended to non-nationals, the maintenance of social security should be protected in bi-lateral agreements or arrangements where they exist or where new ones are negotiated.
With respect to accommodation, greater flexibility was arrived at with the introduction of a clause that allowed for substantial equivalence. This would allow for member states to have conditions that are substantially equivalent to those set in the Convention, in the event that members found it difficult to comply with.
Issues dealt with by the Committee were as follows:
- Amendment to the ANNEX III of the Convention.
- Amendments to article 37.
- The size of vessel for which the special provisions that are proposed should be applicable.
- Amendments to the section of the proposed recommendation that deals with accommodation.
- Coming into force of the Convention
- Revision of the existing fishing Conventions (5)
The Committee dealt with amendments to the Annex of Convention III as it relates to standards of accommodation for fishing vessels and special provisions for vessels larger than 24 metres.
A new article was proposed for fishing vessel owners with respect to employer liability in terms of medical care where a fisher is on foreign soil. This requires the fishing vessel owner to be responsible for the cost of medical care as well as related maintenance costs whilst the fisher is sick or injured. The flexibility that is provided in terms of this article is that the cost could be recouped if the fisher acted fraudulently.
With respect to the closing articles of the convention, the following two issues were agreed upon:
With respect to the Fishermen’s Competency Certificates Convention of 1966, these Conventions could not be ratified by member states that still wished to ratify it but member states that have already ratified it, would continue reporting on them. South Africa has not ratified any of these Conventions.
The Committee agreed that the Convention would come into effect when at least 10 member states had ratified the Convention with at least eight of them being from the coastal states. It further agreed that previous fisher Conventions would be revised automatically if a member state ratified the new proposed Convention. The only existing fisher Convention that would not be revised was the one on a fisher’s vocational training.
The text of the proposed recommendation was amended and provided a set of guidelines for member states to utilize when they implemented the Convention.
It was reported that the ILO had launched a campaign against the trafficking of women and children.
The following matters were identified and outlined in the AU Labour and Social Affairs Commission and were agreed to by the Conference.
- Social Security.
- Different standards to be applicable to larger vessels.
- Identity documentation for fishers.
- The size standard that would differentiate small vessels from larger vessels.
The following draft resolutions were proposed for submission to the plenary on 15 June.
(1) The impact of the earthquake and Tsunami disaster in the Indian Ocean
This resolution was meant to request the Director-General of the ILO, when using the resources of the organisation, to use the expertise at its disposal in order to make a contribution to the labour market, employment and social protection needs of the affected countries.
(2) Social security protection in the fishing sector
The ILO should promote social security protection for fishers and prepare a global report on the provision of social security protection for fishers.
(3) The impact of globalisation of the fishing sector
This resolution proposed to the ILO that a report be developed after examining the impact of globalisation on the fishing sector. The report should include the growing employment or engagement of non-domiciled fishers.
(4) Occupational diseases and injuries in the fishing sector
The proposal was aimed at the examination of occupational diseases and injuries affecting fishers by the ILO and the World Health Organisation, and the impact on both the fishing sector and fishers and their dependants.
(5) Technical cooperation relating to work in the fishing sector
This proposal requested the ILO to assist countries by providing technical expertise to member states that wanted to ratify the proposed Convention.
The manner in which issues were dealt with was appreciated, as matters were resolved through consensus. In the event of disagreements, parties would ask for an adjournment so that the spokesperson could consult his or her principals. These resolutions were not adopted although they were noted in the report on the work of the Committee. On 16 June, the Conference had to vote on the instrument. However, pertinent pints emerged from the vote and it was lost by lack of one vote as both governments and worker voters were not in plenary. It was agreed that the matter should be placed on the agenda of the 2007 ILC for both a Convention and a Recommendation.
3.5 Committee of Youth Employment
This Committee engaged in discussions and debate on challenges and
approaches to the problems of youth employment.
Youth unemployment was identified as a global challenge that warranted
an integrated approach.
In 2004, the ILO organised a tripartite meeting on Youth Employment to
identify initial areas of agreement for discussion. This meeting
produced a substantive document, which together with the contents of a
report of the general survey of the Committee on the Application of
Standards and Recommendations on Employment Promotion, informed the
discussion document for the ILC Committee on Youth Employment.
Specific areas that informed the discussion were identified as
follows:
(1) The major disadvantages faced by young people in the labour
market and the possible consequences of their lack of access to
decent work
Discussions around this matter concluded that challenges facing
young people were multi-dimensional. Issues such as the demand
and supply of labour, and the lack of demand for labour due to a
lack of investments and low economic growth were identified as
factors impact negatively on employment.
Other points of agreement raised related to factors such as
lack of relevant skills and labour market information. The
former related to what has been identified as a mismatch between
education and skills required by the industry. The outcome of
this situation is availability of skills not demanded by the
industry thus contributing to unemployment.
Nigeria, speaking on behalf of the African Group, emphasised the
importance of youth employment in alleviating poverty on the
continent. This position, supported by South Africa, is in line
with the resolutions of the AU Labour and Social Affairs
Commission meeting held in Johannesburg in April 2005. It was
emphasised that Youth Employment should not be viewed in
isolation from the overall unemployment problem, especially in
Africa.
(2) Components of the package of policies, and programmes that
encourage decent work for young people
Discussions on this topic touched on a wide-array of policies
required to address the challenge of youth unemployment. These
included interventions relating to education and training,
entrepreneurship development and the support for small and
medium enterprise development.
The Committee supported the identified policy options. The
Africa group emphasised the importance of the development of co-
operatives in attempting to address the challenge of youth
unemployment.
South Africa was concerned at whether having identified all
these interventions as discussed before, it would not be
appropriate to check if there were structural problems, which
these policies are unable to address. This position, supported
by other Committee members, was informed by the need to shift
from focusing on discussions to the implementation programme.
(3) Respective roles of Governments, employer and worker
organisations in promoting pathways to decent work for young
women and men
The Committee concluded that this responsibility could not be
borne by governments only, as it was an inclusive
responsibility. There was a need to engage social partners and
other interested parties. This position was informed by the
realisation that persistent youth unemployment has serious
implications to all social partners.
(4) The establishment of a new instrument by the ILO that will focus
on youth employment
The ILO needed to get an indication whether it should begin a
process of establishing a Convention that would specifically
focus on youth employment. Discussion on this matter received a
negative response to such an approach. Member states argued
that there was a plethora of instruments in existence that
supported employment. It was concluded that the ILO needed to
strengthen the supervisory mechanism in order to enhance the
existing instruments.
The Committee reached consensus on the causes, implications and
necessary policy interventions related to the identified
problem. There was no contentious area of disagreement as the
discussions confirmed the same issues identified by forums that
met before this session.
Conclusions
The issues and challenges reflected the same issues as those
that related to opportunities brought by young workers into the
working environment. It was realised that young workers seek
employment in diverse surroundings, and that there was lack of
alignment between skills and education.
On the policies and programmes, the one-size fits all approach
was not applicable. There was a need for a coherent approach
that combines macro- and microeconomic intervention.
Governments needed some space in the formulation of policies and
should most importantly place growth and employment generation
at the centre of their national policy objectives.
The action plan, however, called upon the ILO to amongst other
things-
* Work closely with the Youth Employment Network (YEN);
* Expand knowledge through the gathering of factual data and
empirical evidence on the effectiveness of country
policies;
* Facilitate global peer partnerships;
* Develop a research agenda that includes an evaluation
strategy;
* Strengthen research and knowledge dissemination on the 10
core elements in the ILO Global Employment Agenda.
The ILO was also called upon to undertake, as part of the
advocacy a campaign to promote these conclusions.
The Committee stressed that the ILO should as part of the
technical assistance-
* Intensify the provision of guidance and policy advice,
particularly to developing countries;
* Enhance capacity of employers and workers organisations to
effectively participate in the setting of policies;
* Assist developing countries in establishing and
strengthening inspection services.
The ILO was also called upon to maximise the comparative
advantage of its tripartite structures in its activities to
promote decent work.
Resolution on Youth Employment
In line with the Conference procedures, the conclusions of the
Committee were supported by a Resolution that invited the
Governing Body to give due consideration to these conclusions in
its planning for future activities around youth employment and
for the Director-General to give consideration to these in his
implementation of the budget for the 2006-07 financial year.
The Committee adopted its report, which will be used as a basis
for future discussions on the matter.
A sub-regional conference on youth employment was convened by
the ILO in Zimbabwe in October 2005. The objective was to
discuss challenges for Southern Africa and further develop
strategies on how to address this problem.
Youth Employment Network (YEN) debate
The YEN, a structure established to connect global youth
employment initiatives, held a side event in which countries
shared their experiences on youth employment. What emerged from
this discussion was an emphasis on the need for collectivity,
that is, the involvement of social partners and youth structures
in challenges posed by this problem. The UK, through its Africa
partnership initiative, expressed its willingness to assist in
funding some of the initiatives by the Office supporting member
states in their approaches.
Conclusions of the Conference
1) Countries should develop action plans outlining interventions in
dealing with youth employment.
2) Identify sectors with high potential for youth employment.
3) Gather factual data on the effectiveness of country policies and
interventions.
Recommendations
1) The Committee’s delegation to the ILC should be increased and each member should be opportunity to attend.
2) The DOL should strengthen the level of engagement with social partners in preparation for the ILC.
3) The Committee should consider inviting all stakeholders from the youth structures to discuss matters related to youth employment
Report to be considered.
-
Report of the Portfolio Committee on Labour on briefings by Sector Education and Training Authorities, dated 8 November 2005: The Portfolio Committee on Labour, having noted the presentations and submissions made to it, reports as follows:
-
Introduction
The Committee met with six SETAs and officials from the SETA Co-
ordination unit of the Department Of Labour (DOL) on 23 and 30 August.
The delegation from the DOL was led by Messrs S Morotoba: Acting-Deputy
Director-General: Skills Development and F Prinsloo: Acting - Senior
Executive Manager: Seta Co-ordination.
The SETAs which made presentations were the following:
• Services Sector Education and Training Authority (Services SETA)
• Public Service Sector Education and Training Authority (PSETA)
• Financial and Accounting Services Sector Education and Training
Authority (FASSET)
• Food and Beverage Sector Education and Training Authority
(FOODBEVSETA)
• Chemical Industries Sector Training Authority (CHIETA)
• Manufacturing, Engineering and Related Sector Education and Training
Authority (MERSETA)
2. Terms of reference
1. Monitor progress and establish problems in the implementation of the
Skills Development Act (Act No 97 of 1998).
2. Determine the level of performance of Sector Education and Training
Authorities (SETAs).
3. Identify the challenges and constraints faced by the SETAs.
4. Monitor the level of compliance with the PFMA.
5. Assist in formulating proposals which may assist in developing a
way forward
The Committee agreed that a report would be compiled and tabled in
Parliament after all the information had been collated and analysed.
3. Overview by DOL
The Committee received a broad overview from DOL on the SETA
landscape for 2005-2010 and the provisional overall SETA performance
results. The department indicted that there had been some
improvement in the performance of SETAs and government representation
at senior levels in the SETA boards. However, the scale used for
performance management had been based on compliance rather than
performance. Performance approach would be implemented in the future.
The review of the SETA landscape that was finalised in 1 July 2005,
resulted in the amalgamation of some SETAs. The department has
clustered SETAs for internal management purposes, with each of the five
clusters headed by a manager.
SETAs are mandated by the Skills Development Act to drive the National
Skills Development Strategy (NSDS). Although there was a significant
improvement in the focus of SETAs, they are still faced with a
challenge of meeting the NSDS equity targets. Each SETA was expected to
have a number of learners registered on learnerships. The department
was concerned at the lack of understanding by some of employers who
used funds meant for learnerships for their salary budgets. However,
organisations such as NACTU, BUSA and FEDUSA were approached to assist
in dealing with some of the problems on learnership implementation.
The DOL had ensured that business unit managers in provincial offices
are capacitated to understand the learnership determination which is
meant at protecting learners. A learnership guide for unemployed
people was published in all the languages. The department has embarked
on a massive distribution of those guidelines.
With respect to the issue of finances, the department indicated that
although there was an improvement in the area of financial management
by SETAs, there was still more to be done. DOL had developed and
published revised grant regulations to address the issue of surpluses.
There was a concern around the issue of companies that develop plans
that are not implemented. That resulted in some SETAs having to hold
monies against such plans indefinitely. The revised grant regulations
now does away with this problem.
The department was in the process of devising a programme that will
culminate in the improvement of corporate governance within the SETAs.
The programme is being developed in conjunction with the University of
South Africa and funded by the National Skills Fund.
With respect to the funding of learnership programmes on the Expanded
Public Works Programmes (EPWP), the Department of Public Works and the
Construction SETA had approached DOL for funding of EPWP learnerships.
These funds were allocated from the National Skills Fund (NSF). The
Ministers of Labour and Public Works had met to discuss issues which
they should raise with Treasury relating to the concerns raised by the
private sector with respect to levies and how to maximise EPWPs.
The Committee expressed its concern around the issue of an exit
strategy, and the after-care of learners who graduated from
learnerships.
- Presentations by Sector Education and Training Authority
4.1 Public Service SETA (PSETA)
The briefing by PSETA was on the following:
* Mission
* Scope of coverage;
* Re-certification;
* ETQA;
* Skills planning; and
* Learnership implementation
The mission of PSETA commits it to co-ordinate and facilitate
delivery of appropriate learning programs to improve transverse
skills in the public service.
PSETA had done a lot in the major areas to up-skill employees in
the 18.1 learnerships and to ensure that there were appropriate
programmes in place for those employees to be better skilled.
The SETA had had a problem with public service departments that
were spending huge monies of their training budget on allowing
employees to attend private sector short courses that were not
credited with PSETA, as well as spending on attendance to
conferences. With respect to the latter, the Director-General
in the Department of Public Service and Administration was
tasked with a project of coming up with policy that will
regulate the attendance of conferences by public servants.
PSETA alluded to the fact that it was still experiencing a great
difficulty in getting departments to spend more of their 1%
training budget especially in relation to 18.1 learnerships.
The SETA had, however, developed clear guidelines to assist
departments in approaching 18.1 learnerships.
PSETA acknowledged that not much was done in the identification and
development of appropriate courses for junior management and
officials at lower levels. They also acknowledged that they
were currently focusing on the area. The SETA was doing lot of
work in the skilling of senior management and middle management
in terms of their competencies. However, while these have been
a focus of work carried out by PSETA and SAMDI, there was a
concerted effort to pay attention to junior management through
the development of qualifications at NQF 4 and 5.
With respect to the concern that was raised by the Committee
around the mindset of public servants, PSETA in partnership with
the South African Management Development Institute (SAMDI) had
developed a comprehensive induction and orientation course that
would assist both new and existing employees in orientating them
to the new ethos within public service, as well as keeping with
the principles of Batho Pele.
In relation to its status, PSETA expressed a view that the fact
it had been a unit within the Department of Public Service and
Administration (DPSA), had posed challenges on its
accountability and resulted in it being unable to perform as
expected. The SETA was currently in the process of registering
as a public entity. The setting up of process would be
finalised by November 2005. However, the legal status would
enable it to receive appropriate funding to ensure that it meets
the NSDS requirement and overcome problems around accountability
and governance.
PSETA had received a certificate of establishment for 2005 –
2010 and could apply to be established as a legal entity. It
has submitted a proposal to Treasury to get a dedicated grant to
fund PSETA. There was a need to ensure that each department
utilized the allocated skills levy appropriately and
effectively.
With respect to the roll out of 18.2 learnerships, PSETA could
only fund 4000 learners due to the funding received from the
NSF. The first phase of the project was rolled out in the
Eastern Cape, Northern Cape, Mpumalanga and North West
provinces. Allocation of learners was done as per the needs
identified by the provinces. The qualification on the 18.2
learnerships was currently rolled out will be completed by the
end of March 2006. PSETA was in the process of approaching the
NSF to fund the second phase which will include the other four
provinces. This will enable the PSETA to meet the GDS targets.
The South African Qualifications Authority together with PSETA
do quality assurance on training provided. Regular reports are
done and it is ensured that the training provided is valid and
meets the needs.
The issue of exit opportunities for learners had been raised
with DOL and DPSA. The SETA is looking at ensuring that when
unemployed youth are brought into learnerships, the question of
vacancy requirements, as well as scarce skills requirements are
considered. PSETA is in a process of putting up a clear policy
on how to deal with the retention and recruitment of these
learners into permanent appointments after training. The issue
of skills shortage is dealt with as part of the Skills Database
Project which is massively undertaken in the public service as
part of the Governance and Administration Cluster. A commitment
had been made to the President, as part of the national
strategy, the project will be up and running by January 2006.
PSETA is also looking at long term strategy to deal with
training of professionals in the public service. The
recruitment of foreign professionals is a short term strategy.
The public service is perceived as having made progress in the
implementation of employment equity, especially at senior
management level. The two areas which are identified as lagging
behind were females in management positions and employment of
people with disabilities in the public service. Government and
in particular the DPSA had an active recruitment campaign to
increase the number of people with disabilities in the public
sector, and PSETA was committed to ensuring that at least 4% of
all learners were people with disabilities.
The question of infrastructure development for public servants
is a programme that was dealt with through the GNA. PSETA
acknowledged that there was a backlog in this area.
The Committee expressed its view on the importance of linking
skills development processes in order to improve performance in
the public service. PSETA was looking at ensuring that skills
development was in line with the performance management systems
within the public service.
Regarding the issue of collaboration amongst SETAs, PSETA has
an agreement with the ISETT SETA to implement an NQF level 4
learnership on systems development. There were also learnership
agreements with the Health and Welfare SETA around auxiliary
nursing healthcare, and the ETDP around Facilitators and
Assessors.
The DOL emphasised on the importance of SETAs to work together,
as well as the different spheres of government. The NSDS II
does emphasise on this work collaboration. The issue around the
physical presence of SETA in provinces could be addressed by
this collaboration. The PSETA had targeted to meet the 10 000
target set by the Growth and Development Summit (GDS). PSETA
was concerned that learnerships were not used to do practical
experience.
The PSETA board had identified the issue of exit opportunities
for learners as a priority and would like to ensure that people
were linked to vacancies.
The Committee noted the problem of scarce skills in the country.
However, PSETA alluded to the fact that the recruitment of
foreign professionals was used as a short- term strategy, there
was a need to put a long- term strategy to deal with
professionals in the public service.
The Committee expressed concern at the public service lagging
behind in the implementation of employment equity. The lack of
women managers and the employment of people with disabilities
were identified as areas where less progress was made. It was
suggested that provisions should be made to ensure that training
in SETAs include people with disabilities.
The issue of work collaboration is spelt clearly in the 2005-
2010 NSDS. The issue of each SETA having an office in each city
was seen as costly. Fostering inter-SETA relations could be a
solution to the matter. It was also proposed that DOL
provincial offices should look at whether the Sector Skills
Plans (SSP) were linked to the Integrated Development Plans
(IDP).
4.2 Finance, Accounting Services Sector Education and Training Authority (FASSET)
FASSET is responsible for ensuring that appropriate learnerships
are available in the financial sector. The SETA has 22
registered learnerships. In terms of cross-sectoral
learnerships, 21 Memorandum of Understanding (MOU) were signed
with other 21 SETAs. The SETA exceeded its target of 3, 000
learner in learnerships for the first five years. These were
learners that were previously employed and unemployed. 100% of
learners who completed their learnerships were formally employed
or furthering their studies. A great deal of work was done in
terms of driving the concept of signing previously disadvantaged
individuals into FASSET learnerships.
The SETA had been involved in a number of social development
projects. The purpose of these projects was to meet the high
skills needs within the sector. However, all these were in line
with the NSDS equity targets in terms of beneficiaries, i.e 85%
Black, 54% women and 4% Disabled. Each project is measured on
an ongoing basis and measured against the agreed objectives and
deliverables. Examples of these social projects included Science
and Maths school project, Guarantee Trust Holdings (GTH) work
readiness programme, Thuthuka and CIMA Tirisano learnership
project. The level of training offered by these projects ranged
from Grade 12, where support was provided to learners in
subjects such as Higher Grade Mathematics, English and
Accounting, as well support to graduate and post graduate level
students.
The Education Upliftment Project (EUPEC), supported by the NSF,
had assisted in fast tracking transformation and driving
participation in the skills development initiative in the
sector. The project also provides support for the School of
Accounting at the University of Fort Hare in the Eastern Cape.
The NSF supports the Thuthuka project in the Eastern Cape. The
SAICA had also assisted in the implementation and delivering of
those projects. However, the DOL has allocated R75m to extend
the project to Limpopo and Kwazulu-Natal.
Almost 2000 Workplace Skills plans were received and over 1000
workplaces were accredited. 36% of SMMEs participated in
claiming grants and attended interventions. Over R147 m was
spent on training.
Challenges
Proactive communication to all stakeholders remains a high focus
area at FASSET. Part of that include Continuous Professional
Education (CPE) training sessions. This plays a vital role in
ensuring high levels of awareness, support and participation for
all initiatives. However, the issue of the regional
representation of the SETA remains a concern to the Committee.
Transformation and diversity remains a challenge in the
financial sector. FASSET’s efforts in addressing inequalities
were stifled by insufficient numbers of previously disadvantaged
individual matriculants with higher grade Mathematics coming to
the system. Even where black matriculants have received
relatively high symbols, training institutions claimed that
learners did not have expected level of knowledge of Mathematics
and Accounting. In addition, poor proficiency in English
language, lack of computer knowledge and facilities, as well as
inadequate career guidance continued to inhibit access into the
sector. The Committee wanted to know the relationship between
the FASSET and the Department of Education, especially in
relation to the demand of Maths and Science. The high numeracy
required by the sector also serves as a barrier to entry,
although Matriculation results have improved in recent years.
FASSET is committed towards changing the profile of the sector,
especially in relation to issues such as the number of qualified
Black Chartered Accountants. The marketing strategy of the SETA
in schools and universities runs in conjunction with
professional bodies in the sector, as well as the Association
for the Advancement of Black Accountants (ABASO). The latter is
quite active in rural areas.
ABET training is offered to all employees who are currently
within the sector. Such training is funded by FASSET in a form
of a grant.
The impact of the R500 000 remuneration ceiling levy exemption
on SME participation and assistance pose a challenge.
The Committee was concerned at the Department of Finance and the
South African Revenue Services (SARS) which were not paying
levies, although they were one of the large sectors that were
benefiting from FASSET.
4.3 Services (Services SETA)
The SETA has almost 107, 588 employers on its database. 60% of
member companies are levy-paying and 40% non-levy paying. The
SETA had registered 54 learnerships with the South African
Qualifications Authority (SAQA). The GDS targets were exceeded
by
300%. In addition, targets of registered learners was exceeded
in line with the Service Level Agreements (SLAs), as well as
disability targets on learnerships.
The highlights of SSETA activities during the previous financial
year included the following:
* Over 600 Skills Development Facilitators (SDFs) were
trained.
* The development and registration of the small business
qualification for SMMEs.
* The roll-out of an employee assistance programme in
response to a a holistic view to skills development.
* The formation of an inter-sectoral Disability Forum.
* Accreditation of 1089 service providers and ISO
accreditation of SSETA as an organisation.
* The successful implementation of the NSF funded domestic
worker skills development project.
Opportunities facing Services SETA in implementing NSDS
2005-2010 were noted as follows:
* A more targeted approach to skills development with focus
on scarce and critical skills.
* Collaboration and strategic partnerships at national,
provincial and international levels, including NEPAD
secretariat.
* A more focused support to large and medium firms in the
sector towards skills
development.
* Linking learnerships and placement within broader EPWP
framework through
partnership agreements linked to demand side of strategies.
Challenges facing SSETA in implementing NSDS 2005-2010 were
noted as follows:
• Inclusion of employment equity criteria for large and medium
firms in the sector
for 10% mandatory grant component, as well as improved board
profile regarding employment equity.
• Learnership funding specifically with drop income due to tax
amendments.
Fast tracking certification partners for all industries.
• Disability target and profile in the sector.
• Providing skills development support and initiatives to
approximately 100 000 non-levy paying employers in the
sector.
4.4 Chemical Industries SETA (CHIETA)
The SETA has 54 registered learnerships. CHIETA was mentioned
amongst one of the SETAs which were announced as an excellent
performing SETAs by the Minister. The SETA had done very well
particularly in terms of its management of funds.
1 867 people in the 18.2 category entered learnerships in the
chemical industries sector. A further 1 878 workers were
registered in the 18.1 learnerships. Out of the 1 466 GDS
target that was set for the SETA, 3 812 people were trained.
That exceeded the target by 115%.
As part of the contribution towards national objectives of
growth, employment and poverty alleviation, 4 040 unemployed
learners completed ABET Level 4 skills programmes aligned to the
chemical operations NQF level 1 learnership. 2 033 learners
employed by SMMEs participated in ABET skills programmes. 163
HIV/Aids workplace co-ordinators were trained and supported.
Customised business development initiatives were implemented for
20 SMMEs for sustainability.
CHIETA acknowledged that although 43 disabled people benefited
from their training, this is the area which not much was done.
One of the reason could be attributed to nature of the sector.
However, the SETA had encouraged the training of the disabled on
skills such as IT, switchboard, etc. The SETA also acknowledged
that more needed to be done to attracting youth to the sector.
In terms of marketing itself, CHIETA road and radio shows were
conducted. Staff were also deployed throughout the country,
including the rural areas where they visit schools and educate
school children about the sector. The SETA did acknowledge that
there was a need to engage in a vociferous manner in
advertisements so as to market itself.
Recognition of prior learning is seen by CHIETA as important,
especially to people who although they did exceptionally well in
technical work, but could not progress to higher positions.
CHIETA had performed exceptionally well under the NSDS 1.
However, for it the new strategy, NSDS II would require it to
rethink the way in which products and services could be
delivered. It also necessitates a greater accountability of
funds expended, quality of training provision, involvement of
marginalised communities, information gathering, interpretation
and dissemination, and directed social development approach.
The strategy also calls for stakeholder involvement at all level
4.5 Food & Beverage (FOODBEV) SETA
The function of the SETA is to promote, facilitate and
incentivise skills development in the food and beverage
manufacturing sector. The SETA had successfully helped in the
establishment of a sector Employment and Skills Development Lead
Employer (ESDLE) and the FOODBEV learnership agency. The
highlights of the SETA included the following:
• The NSDS targets were exceeded by 54%.
• The SETA had unqualified reports every year until closing of
the NSDS 1.
• A positive audit report was received by SAQA and re-
accreditation as an ETQA body.
The low lights were listed as follows:
• The delay in the re-certification hindered forward planning.
• Funding of learnerships was restricted due to limited
funding.
• Difficulty in reaching the more rural areas.
• Difficulty in achieving NSDS targets for the disabled.
• Uncertainty over spill-over effects of merger of primary and
secondary agriculture SETAs.
• Delay in announcing the NSF funding window.
• Closing off of the hugely successful NSF funded Hlumani
project.
Funding required for many NSDS targets and momentum created
around learnerships was noted as a challenge.
The Committee noted the weakness in the linkage between
provinces and rural areas as a concern. However, the
possibility of the presence of each SETA in all the provinces
would be costly. This matter could be addressed by the
collaboration between the SETAs. A proposal made was that
provincial labour centres could be used to servicing the SETAs.
4.6 Manufacturing and Engineering SETA
Fifty percent of the income on levies come from big companies. A lot
of improvements were done since the appointment of a new Chief
Executive Officer. Part of the improvements included the following:
• Enormous increase in learner intake due to announcement of
enticing discretionary grants.
• Huge intake of unemployed learners.
• Increase in payment of discretionary grants.
• Huge successful SMME initiative resulting in sponsored training for
11 000 employees in small and medium companies.
• Successful ABET project with ABET learners also from SMME
companies.
With respect to the SETA contribution to growth, employment and
poverty alleviation, 4 581 unemployed learners were registered. Out
of the latter, 3 477 were black, 1 017 female and 71 people with
disabilities. 620 unemployed learners had completed learnerships.
Out of the 6 669 apprentices registered, 3 608 were black, 302 female
and 69 disabled. All 4 498 apprentices that were registered and
qualified were absorbed in the industry.
Challenges of the NSDS 11 were listed as follows:
• Aligning the strategy to uniqueness and diversity of the
manufacturing sector.
• Low target for non-levy paying companies versus levy exemption of
small companies.
• Delays in the announcement of NSF funding window.
5. Recommendations
(1) Work collaboration among the SETAs should be enhanced.
2) The DOL should do more research on the profile of service
providers.
3) The DOL should look into the issue of SETA boards and their
contribution.
4) The DOL should monitor the functions of the Standard Generating
Bodies and their representation.
Report to be considered.
-
Report of the Portfolio Committee on Agriculture and Land Affairs on the Annual Reports and Financial Statements for 2004/5 of the Department of Agriculture and its Public Entities, dated 8 November 2005:
EXECUTIVE SUMMARY -
BACKGROUND
The Constitution of South Africa (Act No. 108 of 1996) recognises that Legislative Authority has an important role to play in the oversight function in overseeing the performance of Departments and Public Entities.
Section 65 of the Public Finance Management Act requires that Ministers table the annual reports for the Department and Public Entities for which they are responsible by 30th September each year.
On the 30th September 2005, the Department of Agriculture and its Entities namely, Land Bank, National Agricultural Marketing Council (NAMC), Onderstepoort Biological Products (OBP), Perishable Products Export Control Board (PPECB), and Agricultural Research Council (ARC) tabled their 2004/5 Annual Reports and Financial Statements to Parliament in terms of Section 65(1)(a) of the Public Finance Management Act, 1999 (Act No. 1 of 1999).
Upon the referral by the National Assembly, the Portfolio Committee on Agriculture scheduled extended briefing sessions with the Department, and its entities to present their Annual Reports and Financial Statements including the report of the Auditor-General on the Financial Statements for 2004/5.
- OVERVIEW OF PRESENTATION ON DEPARTMENTAL AND PUBLIC ENTITIES 2004/5 ANNUAL REPORTS
After welcoming and accorded a platform to officials from the Department and public entities the Chairperson, Ms Nhlengethwa , in her introductory remarks indicated that the main purpose of the sessions were to provide platform to the officials to brief Members on the contents of 2004/5 annual reports submitted to Parliament in terms of Public Finance Management Act. The presentations generally focused on 2004/5 targets, achievements and challenges, and audited Financial Statements ending at 31st March 2005.
- Department of Agriculture
The first report annual report presented was of the Department of Agriculture. The Chief Operations Officer and Programme Mangers presented the report. The main focus of the presentation was on 2004/5 targets and achievements related to programmes such as Administration, Farmer Support, Agricultural Trade, Economic Research, Agricultural Production, Sustainable Resources, Regulatory Services, Communications and Programme planning.
The audit committee report, baseline over the Medium Term Expenditure Framework (MTEF) period, budget allocation per programme and economic classification, actual expenditure in previous and current financial year, transfer payments, and Human Resource matters were also highlighted. Major departmental activities were structured to correspond with the priority areas set in the Strategic Plan
2.2 Land Bank
The second annual report presented was of the Land Bank. The Chief Executive Officer, Mr Alan Mukoki presented the annual report and audited financial statements of the Bank. The main focus of the presentation was on the vision, mission, evolution of the Bank since 1998, approach, external environment, operational review, loans to emerging farmers, AgriBEE support, financial review and turnaround strategy.
- Primary Agriculture Education & Training Authority (PAETA)
NOTE: PAETA does not usually report to the Committee but reports to the Portfolio Committee on Labour. However, the committee took a decision that the Entity should also present to Agriculture and Land Affairs Committee as it is dealing with training in the Agricultural Sector. The Chief Executive Officer, Mr Michiel van Niekerk presented the report. The main focus was on targets and key achievements, such as Learnerships, Skills programmes, ABET, HIV / Aids, Quality Assurance, National Skills Fund and audited financial statements.
- National Agricultural Marketing Council (NAMC)
NAMC annual report was the fourth to be presented. The Council Vice- Chairperson, Ms Dora Ndaba presented the report. The report focused on the legislative mandate of the council, the relevance of the NAMC in the deregulated marketing environment, the activities for 2005/6 in support of the objectives of the Department of Agriculture, increase support to agricultural activities in the emerging sector, budget utilization of 2004/5, the actual expenditure, audited statement and audit opinion.
- Onderstepoort Biological Products (OBP)
OBP was the fifth entity to report. The Managing Director, Dr Makuleni presented. The presentation outline focused on introduction, governance report, the company performance for 2004/5, human resource report, the financial performance for 2004/5, and audit opinion.
- Perishable Products Export Control Board (PPECB)
The PPECB also appeared before the committee. The Chief Executive Officer, Mr Neels Hubinger presented the report which focused on the legislative mandate, governance and structures, the purpose, business model and strategic emphasis; elaboration on the annual report; the financial statements for 2004/5, and audited financial statements.
- Agricultural Research Council (ARC)
The ARC was the last institution to appear before the committee. The Chief Executive Office, Dr Tau-Mzamane assisted by the Senior Management presented the report which centred on the ARC structure, the Council, Research and Development, Sustainable community development, Corporate support services, Human resource overview, Information & communications Technology overview, and financial overview.
- COMMITTEE OBSERVATIONS
Based on 2004/5 annual reports and audited financial statements presented, the Committee has generally observed that:
• The 2004/5 annual reports of the Department of Agriculture and Public
Entities have provided information on service delivery and have
reported on the financial statements, management and audit reports
against the performance targets and budgets as outlined in the
strategic / business plans and Estimates of National Expenditure.
• Audit opinion, the financial statements fairly present, in all
material respects, the financial positions of the Department and its
Entities at 31 March 2005 and the result of their operations and cash
flows for the year then ended, in accordance with prescribed
accounting practice and in a manner required by the Public Finance
Management Act, 1999 (Act No.1 of 1999).
• The tabling of 2004/5 annual reports and financial statements of the
Department and Entities to Parliament by the Minister of Agriculture
and Land Affairs has complied with the requirements of the Public
Finance Management Act.
- REPORT
The Portfolio Committee on Agriculture and Land Affairs having considered the Annual Reports and Financial Statements for 2004/5 of the Department of Agriculture and the Public Entities to reporting to the Minister during the extended briefing sessions, reports as follows:
- ANNUAL REPORTS AND FINANCIAL STATEMENTS FOR 2004/5 OF THE DEPARTMENT OF AGRICULTURE AND ITS PUBLIC ENTITIES
On the 1st November 2005, the Committee completed its oversight work on the reports of the Department and the public entities namely, the Land Bank, Khula Land Credit Facility, Ncera Farms (Pty) Limited, National Agricultural Marketing Council, Onderstepoort Biological Products, Perishable Products Export Control Board and Agricultural Research Council.
- DEPARTMENT OF AGRICULTURE
The Chief Operating Officer, Mr Mabombo and programme managers presented the 2004/5 annual report and audited financial statements of the department. The main focus of the presentation was on 2004/5 targets and achievements related to programmes such as Administration, Farmer Support, Agricultural Trade, Economic Research, Agricultural Production, Sustainable Resources, Regulatory Services, Communications, and Programme planning.
The audit committee report, baseline over the MTEF period, budget allocation per programme and economic classification, actual expenditure in previous and current financial year, transfer payments, and HR matters were also highlighted. Major departmental activities were structured to correspond with the priority areas set in the Strategic Plan.
The period under review included: adjustment of operational plans because of 2004 general elections; the approval of the new departmental structure; the Departure of the Director-General, Ms Bongiwe Njobe on 28 February 2004; the outbreak of animal diseases; working relations between the Department of Agriculture and Department of Land Affairs; the alignment of the agricultural public entities and the Department of Agriculture; mandate given by the State of the Nation Address, such as, the Agricultural Credit Scheme, the AgriBEE and the Comprehensive Agricultural Support Programme (CASP).
The activities of the Department are organised in nine programmes:
Programme 1: Administration
The programme provides the department with political and strategic leadership as well as management and administration services. Actual spending for the period under review is R169 838 million that 12.2% of the total budget.
Programme 2: Farmer Support and Development
The programme promotes stability, competitiveness, growth and transformation in the agricultural sector by developing policies governing farmer settlement, food security, rural development, the registration of co- operatives and agricultural risk and disaster management. Actual spending for the period under review is R330 044 million that is 23.8% of the total budget.
Programme 3: Agricultural Trade and Business Development
The programme develops policies governing access to national and international markets and promotes black economic empowerment (BEE) in the sector. Actual spending for the period under review is R26 759 million that is 1.9% of the total budget.
Programme 4: Economic Research and Analysis
The programme provides the necessary information for developing and monitoring the agricultural sector. Provides timely, accurate agricultural economic and statistical information to relevant stakeholders and other interested parties to improve decision-making. Actual spending for the period under review is R16 108 million that is 1.2% of the total budget.
Programme 5: Agricultural Production
The programme promotes agricultural research, productivity and sustainability. Objective is to provide national leadership for increased sustainable agricultural productivity, genetic resources management, research, technology development and transfer. Actual spending for the period under review is R368 496 million that is 26.6% of the total budget.
Programme 6: Sustainable Resources Management and Use
The programme develops, implements and monitors policies for the management and use of land and water resources in agriculture. Actual spending is R143 219 million for the period under review, this is 10.3% of the total budget.
Programme 7: National Regulatory Services
The programme develops and monitors risk management strategies, policies and legislation for food safety and for the control of animal and plant diseases. For the period under review, actual spending is R246 666 million that is 17.8% of the total budget.
Programme 8: Communication and Information Management
The programme manages and co-ordinates communication, education and international relations. Provide effective internal and external communication and information management through the implementation of a proper strategy and a structured plan. Actual spending by the programme for the period under review is R83 405 million and 6.0% of the total budget.
Programme 9: Programme Planning, Monitoring and Evaluation
The programme consolidates and supports strategic and operational management in the department. Actual spending for 2004/5 is R2.306 million, which approximately 0.2% of the total budget.
The total allocation to Department for 2004/5 is R1 449 391 billion. The total actual spending for the same period is R1 386 841 billion that is 95.7% of the total budget. The report reflects under-spending of R63 million that is 4.3% of the total budget.
Audit opinion the financial statements fairly present, in all material respects, the financial position of the Department of Agriculture at 31 March 2005 and the results of its operations and cash flows for the year then ended, in accordance with prescribed accounting practice and in the manner required by the Public Finance Management Act, 1999 (Act No1 of 1999), as amended.
MATTER OF EMPHASIS:
Attention is drawn to the control over fixed assets, the audit reveals various cases where assets could not be physically verified or traced to the asset register at the national office and other regional offices.
COMMITTEE OBSERVATIONS
The committee CONSIDERED THE ANNUAL REPORT and expressed the following concerns:
a) The outbreak of animal diseases in Eastern Cape, Western Cape
Limpopo and KwaZulu-Natal.
b) The intergovernmental relations challenges.
c) Information flow and management between three spheres government.
d) Training and lack of support for emerging farmers.
e) The role of played by Extension Officers in some areas is not
visible.
f) Agricultural co-operatives and the registration process.
g) Implementation plans of Provincial departments and Districts
RECOMMENDED THAT the follow up meeting with the Department of Agriculture is necessary to discuss the Comprehensive Agricultural Support Programme (CASP) funding.
AND AGREED to accept the report.
2.2 LAND BANK
The Chief Executive Officer, Mr Alan Mukoki presented the annual and audited financial statements of the Land Bank. The main focus of the presentation was on vision, mission, evolution of the Bank since 1998, approach, external environment, operational review, loans to emerging farmers, AgriBEE support, financial review and turnaround points.
During 2004/5 the Bank has recorded successes in relation to:
a) Raising levels of investment in the natural environment through
agriculture and by adding value to the contributions of the rural,
provincial and local government agricultural stakeholders.
b) Raising rural awareness levels and empowering communities to create
new social business networks to facilitate productive partnerships
amongst small-scale farmers through the Step –Up product by
creating credit histories for the unbankable.
c) Effectively delivering on its undertakings, often in partnership
with other commercial and development finance institutions.
d) Fostering and strengthening a regional approach to delivery.
e) Achieving on the ground outcomes and promote sustainable
agriculture.
Apart from successes, Land Bank faces specific challenges relating to:
a) Improving access for various categories of agricultural
entrepreneur and meeting a variety of needs with the innovative
thinking required to meet the challenges of limited access to land
ownership and collateral.
b) Matching service capacity with outreach- the Bank must ensure that
it offers excellent and cost-effective service to all clients.
c) Maintaining sound financial performance and credit rating –
balancing outreach and quality service with imperatives of
sustainability.
d) The Bank has to continue to grow into the space created by the Land
and Agricultural Development Act (Act No. 15 of 2002) and make
creative use of the opportunities created by the Act.
Turnaround Strategy: since 1998, the Bank was accorded a development mandate, the focus of its activities have altered to embrace both the commercial farming enterprises and the emergent farming enterprises across agricultural value chain. For the Bank to deliver on the mandate it was obliged update and strengthen its financial controls. As a consequence, the Land Bank has developed a Turnaround Strategy embracing its core activities, including, but not limited to short –term, medium-term, and long-term outputs and outcomes.
The Audit opinion reflects that the financial statement fairly present, in all material respects, the financial position of the Land Bank and the Group at 31 March 2005 and the results of its operations and cash flows for the year ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Public Finance Management Act (Act No.1 of 1999).
MATTERS OF EMPHASIS:
Computer system: there are still deficiencies in the banking loan module, as well as certain inadequacies in either logical or manual mitigating controls, which remain unresolved.
Fruitless and wasteful expenditure: the Land Bank was assessed by the South African Revenue Services in 2004 financial year for PAYE of R10 million, penalties of R665 210 and interest of R2.9 million relating to employees tax that was incorrectly calculated and not deducted from employees earnings. The total PAYE not recovered from employees, penalties and interest amounting to R13 606 849 is regarded as fruitless and wasteful expenditure.
Submission of the financial statements: Section 55 of the Public Finance Management Act, 1999 (Act No. 1 of 1999) as amended by Act No. 29 of 1999) requires the financial statements to be submitted to the Auditor-General within two months after the financial year-end, by 31 March 2005. The financial statements were signed by the accounting authority and submitted for audit purposes on 31 May 2005.
COMMITTEE OBSERVATIONS
THE COMMITTEE DELIBERATED THE REPORT and expressed the following concerns:
a) Creation of an environment for the empowerment of the historically
disadvantaged.
b) Participation by previously disadvantaged South Africans within all
levels of the value chain in the agricultural sector.
c) Credibility of the Bank amongst the emerging farmers needs special
attention.
d) Borrowing and the ability to repay.
e) Lack of training and development to land reform beneficiaries.
f) Access to information and products of the Bank to rural villages.
The Committee accepted the report.
2.3 PRIMARY AGRICULTURE EDUCATION & TRAINING AUTHORITY (PAETA)
The Chief Executive Officer, Mr Michiel van Niekerk presented the 2004/5 annual report and audited financial statements. The primary objective of PAETA is t to create and promote opportunities for social, economic and employment growth for farming communities, in conjunction with other stakeholders in primary agriculture, through relevant, quality and accessible education, training and development.
The main focus of the presentation was on targets and key achievements such as Learnerships, Skills programmes, ABET, HIV / Aids, Quality Assurance, National Skills Fund Projects. Total revenue for 2004/5 amounted to R93 108 million. The amount is constituted by the Skills Development income, the Skills Development levy interest, the National Skills Fund income; donations for special projects; and investment income. Total expenditure amounted to R90 697 million, as a result of Employer grant and project expenses, Administration expenses, National Skills Fund expenses and Special project expenses.
Auditor-General’s note in terms of qualifications, matters of emphasis and significant matters was none.
Key challenges for AgriSETA for 2005/6 and beyond:
• Extensive support to the Agricultural Land reform processes in an
integrated manner via a large- scale strategic NSF project.
• With financial support roll-out ABET programmes to at least 10 000
per annum.
• To capacitate learning centres (especially Agricultural Colleges)
into Centres of Excellence.
• High quality, relevant and in-depth agricultural and agricultural
processing research.
• To create infra-structural linkages with the secondary component to
make down-stream activities more accessible to small farmer.
• The impact on Extension and Mentoring services.
COMMITTEE OBSERVATIONS
The committee interrogated the report and raised a concern that:
a) The location of Agricultural Colleges to the Department of
Education needs to be considered (by Agriculture and Education
Departments);
b) Transformation of the higher echelons of the entity.
The Committee accepted the report.
2.4 NATIONAL AGRICULTURALl MARKETING COUNCIL (NAMC)
The National Agricultural Marketing Council (NAMC) is a schedule 3 public entity established in terms of Marketing of Agricultural Products Act (Act No. 47 of 1996). The core mandate of the NAMC is to do investigations and advise the minister of Agriculture and Land Affairs on agricultural marketing policies and their application, and to co-ordinate agricultural marketing policy in relation to national economic, social and development policies and international trends and developments.
Funding to the council during the year under review amounted to R11 162 000 million. The budget was made up of transfer from the Department of Agriculture with R10 601 000 million and interest and other amounted to R561 000.
The actual expenditure amounted to R11.1 million that was made up of personnel expenditure, administration, professional services, provision for audit fees. There was a surplus of R1.7 million which has been approved.
Audit opinion
The financial statements fairly present, in all material respects, the financial position of the NAMC at 31 March 2005 and the results of its operations and cash flows for the year then ended, in a manner required by the Public Finance Management Act.
COMMITTEE OBSERVATIONS
The Committee considered the report and expressed the following concerns that:
a) The Council does not have a strategy to deal with enhancement of the first economy and responding effectively to the challenges of the second economy. b) Lack of proactive role by the council to ensure that South Africa is not a victim used as a dumping zone. c) The council should consider employing marketing officers, to deal with domestic and international marketing. d) It was not clear as to why it took so long for the council to disband the Wool Board. e) There is no strategy in place to for the council to be accessed by emerging farmers.
FURTHER REQUESTED THAT:
a) The council to provide a report in relation to the time taken to
disband the Wool Board.
b) The council provide a report on the breakdown of personnel
expenditure.
2.5 ONDERSTEPOORT BIOLOGICAL PRODUCTS (OBP)
Onderstepoort Biological Products Limited is a bio-technical company manufacturing vaccines and related products for global animal health care industry. The company was established in terms of the Ondertepoort Biological Products Incorporation Act (1999).
The company is entirely self-financing and derives its revenue from the sale of vaccines and related biological products. Since inception in 2000, the company has consistently shown a positive growth in sales. The contribution of export sales since then has risen, while the growth in profits has also increased.
The company reported a non-tax revenue of R69.7 million for 2003/4, and that was projected to grow over the MTEF period, which was largely attributable to the projected increase in sales of vaccines in the export market.
For the period under review the company reported net revenue of R77.4 million and increase of R7.7 million compared to previous year. The increase was due to operational cash flow, cash invested in three major banks, cash was retained for upgrade of facilities.
Audit opinion
The financial statements fairly present, in all material respects, the financial position of the Company at 31 March 2005 and the results of its operations and cash flows for the year then ended in accordance with the requirements of by the South African Companies Act of 1973, and other reporting requirements set out in the Public Finance Management Act of 1999.
COMMITTEE OBSERVATIONS The committee considered the report and expressed appreciation of the good work done and encouraged the company to:
a) Strengthen personal contacts with the emerging farmers;
b) Continue visiting provinces on regular basis to end the diseases;
c) Extend more services to the SADC region and the continent.
FURTHER RECOMMENDED:
That the Committee shall undertake an oversight visit in the new-year to the Head office of the company to oversee the renovated facility
2.6 PERISHABLE PRODUCTS EXPORT CONTROL BOARD (PPECB)
The Perishable Products Export Control Board was established in terms of the Perishable Products Export Control Board Act (Act No.9 of 1983). Its purpose is to ensure that perishable products intended for export from South Africa meets international quality standards. Activities include inspections and quality control, and providing technical, development, market intelligence and information services. The Board is funded by its own revenue and does not receive transfers from government.
For the period under review, the total amounted to R91 248 418 million which was derived from among others the volume, levy, customised, SA PIP and other related matters. The total expenditure amounted to R95 410 166 million which comprised of people, operations, technology, building and other matters. The statement reflects a shortfall of R4.1 million while in 2004 a surplus of R2.4 million was recorded.
Audit opinion
The financial statements fairly present, in all material respects, the financial position of the Board at 31 March 2005 and the result of its operations and cash flows for the year then ended in a manner required by the Public Finance Management Act of 1999, except a note in the director’s report which listed areas of non-compliance with the Public Finance Management Act (Act No. 1 of 1999).
COMMITTEE OBSERVATIONS
The Committee considered the report and expressed the following concerns:
a) The Employment Equity Plan of the Board must be fast-tracked;
b) The bulk (about 70%) of the budget is utilised for personnel
expenditure;
c) The Board needs to consider the possibility of labelling the
products in terms of branding in the second economy
AGREED to accept the report and the financial statements as presented;
AND RECOMMENDED THAT, the Board should provide the committee input on how institutions such as NAFU and AgriSA can be included as part of transformation process. 2.9 Agricultural Research Council (ARC)
The Agricultural Research Council (ARC) is a public entity listed in the Public Finance Management Act (Act No. 1 of 1999). The ARC renders multidisciplinary services addressing national agricultural priorities. It provides a scientific base and technology transfer capacity to national agricultural industry in South Africa. The ARC was established in terms of the Agricultural Research Act (Act No. 86 of 1990). It is one of the ten publicly funded science and technology institutions that constitute the National System of Innovation (NSI).
The mandate of the ARC includes conducting research, developing and transferring technology. In so doing it promotes the agricultural sector industry, thereby contributing to the quality of life of the people of South Africa. This mandate is funded through a Parliamentary Grant and allocated as part of the Science vote. The secondary mandate includes programmes or services required by the Department of Agriculture, Department of Science and Technology (DST), the Provincial Departments of Agriculture and other industry customers. The ARC, in its responsibility to conduct research, develops technologies in response to agricultural priorities as identified through national policy.
On Research and Development, the activities of the ARC have been aligned to address major government priorities such as integrated rural development, natural resource management, food security, and trade development and support.
On Sustainable Rural Livelihoods, in the past year the ARC has been involved in a wide range of activities – from production projects and research programmes, to equipment testing and trials. The extensive training it has conducted spanned from conservation and cotton farming to pest management and beekeeping.
The services provided by Corporate support services are operation transaction based and include finance, information technology, human resources, facilities management, legal, management of corporate public relation events and travel. The highlights for the year include the following: development of a service desk focusing on improving service delivery, the upgrading of the Information Technology which had a major impact on improving the communication infrastructure of the ARC.
On Human resource, the year was a period characterised by stable industrial relations and a 4.7% growth in the total workforce. The ARC maintained its target of investing 3% of its labour cost in human resource development and also claimed the skills grants due. Employment Equity, a subject of constant focus, still presents some challenges even though the ARC has succeeded in appointing candidates from designated groups.
In this period, employees benefited from a range of professional development and training programmes. To tackle the shortage of scientists in the research disciplines, the HR division has come up with some innovative knowledge-transfer and mentoring programmes. In the coming year, the focus is to be on succession planning, career-path planning, performance evaluation frameworks and aligning of policies with latest labour developments.
On Information and communication technology, the effective management of information is crucial to organization that generates such a volume of knowledge. In the year under review, the ARC developed a new ICT strategy and has established a number of new systems.
During the year under review, the ARC has committed a total amount of R45 million towards capital infrastructure and renewal, R25 million towards Information technology upgrade and R27 million towards human capacity development.
Revenue from external funding at R219.3 million increased by 3.3%. Total remuneration costs increased by 11.1% largely due to action taken to address the remuneration levels of staff in ARC which has lacked behind. The corrective action will improve the ability of the ARC to attract and retain core scientific. Capital expenditure totalled R22.7 million. During 2004/5 the ARC has committed a total budget of R44 million to address the infrastructure needs.
Audit opinion: The financial statements fairly present, in all material respects, the financial statements of the ARC at 31 March 2005 and the results of its operations and cash flows for the year then ended, in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) as amended.
MATTER OF EMPHASIS:
The report reflects non-compliance with the PFMA, with regards to internal controls and submission of financial statements.
COMMITTEE OBSERVATIONS
While the committee accepted the annual report, it also expressed the following concerns:
a) The ARC strategy in disseminating information especially to
emerging farmers (and in the rural areas).
b) The state of readiness by the institution to combat the developing
bird flu around the world, in the event it reaches the country.
c) The technology transfer of skills and development.
d) Participation by the institution in NEPAD activities.
e) The challenges posed by the Climate Change the readiness to
respond.
f) The non-repairing of the facilities belonging to the ARC.
IT WAS AGREED THAT the ARC must provide written responses other questions.
FURTHER REQUESTED THE ARC TO:
• Provide the committee with resource challenges that makes the
institution not being able to fulfil its mandate.
• The Committee indicated to do all it can to assist the institution;
and
• Strengthen networking with all Universities in South Africa.
- CONCLUSION AND RECOMMENDATIONS
Having considered the 2004/05 Annual Reports and Financial Statements of the Department of Agriculture and its Public Entities, the Portfolio Committee recommends that:
• A follow up meeting with the Department of Agriculture is required
to discuss the Comprehensive Agricultural Support Programme (CASP)
and MAFISA funding and the problems experienced at provincial
levels;
• While the Committee agrees that during the past year (2004/05) the
Department has made remarkable progress on various issues, such as
transformation of the sector at all levels, by ensuring that
agriculture is becoming inclusive, competitive and alleviate
poverty. Much, however, remains to be done to create an enabling
environment to achieve the country’s strategic goals; and
• The Committee extends special appreciation to the Department of
Agriculture and all associated entities for attending the annual
report hearings and hoping matters of concern would be attended.
-
Report of the Portfolio Committee on Agriculture and Land Affairs on the Annual Reports and Financial Statements for 2004/05 of the Department of Land Affairs and its Public Entities, dated 8 November 2005:
EXECUTIVE SUMMARY -
BACKGROUND
The Constitution of South Africa (Act No. 108 of 1996) recognises that the Legislative Authority has an important role in the processes of oversight function in overseeing the performance of Departments and public entities. Annual reporting is a mechanism by which department and associated entities account to Parliament on their activities.
Section 65 of the Public Finance Management Act requires that Ministers table the annual reports for the Departments and public entities for which they are responsible by 30th September each year.
On the 30th September, the Department of Land Affairs and associated entities namely, Commission on Restitution of Land Rights, Bala Farms (Pty) Limited, and KwaZulu-Natal Ingonyama Trust Board, Khula Land Reform Credit Facility, and Ncera Farms tabled their reports in terms of Section 65(1)(a) of the Public Finance Management Act (Act No.1 of 1999).
Upon the referral by the National Assembly, the Portfolio Committee on Agriculture and Land Affairs scheduled extended briefing sessions with the Department of Land Affairs and associated public entities to present their reports and financial statements including the report of the Auditor- General on Financial Statements for 2004/05.
- OVERVIEW OF ANNUAL REPORTS OF THE DEPARTMENT AND PUBLIC ENTITIES FOR 2004/05
The main purpose of the extended briefing sessions were to provide a platform to departmental officials to brief Members on the contents of 2004/05 annual reports submitted to Parliament in terms of Public Finance Management Act. The presentations focused on 2004/5 targets, achievements and challenges, and audited Financial Statements ending at 31 March 2005.
2.1 Department of Land Affairs
The Director-General, Mr Glen Thomas presented the annual report. The main focus of the presentation was on strategic objectives, performance review highlights in relation to Land Restitution, Land Redistribution, and Land Tenure, Land Planning and Information, improved governance of the Department, and financial review for 2004/05.
2.2 Commission on Restitution of Land Rights
The Chief Land Claims Commissioner, Mr Tozi Gwanya presented the commission report on the 7th June. The main focus was on the strategic objectives of the Commission which include: providing equitable redress to victims of racial land dispossession in terms of the restitution Act No. 22 of 1994 as amended; provide access to rights in land, including land ownership and sustainable development; to foster national reconciliation and stability; and improve household welfare, underpinning economic growth, and contributing to poverty alleviation.
2.3 Bala Farms (Pty) Limited
The Chief Finanacial Officer, Ms Sarah Choane presented the progress report on deregistration on the 5th April. Bala Farms is a state-owned company created by the former Bophuthatswana Administration to buy and administer farms outside the homeland territory. The company is being deregistered in line with the department’s land policy. A new deadline of 31 March 2005 was set. Properties which have not been disposed-off by that date will be transferred to the Department of Land Affairs for disposal.
The department does not provide any financial assistance to the company. The company generates its own revenue from interest earned on investments and on the leasing of properties, and from the sale of land. Total income in 2003/04 was R1.3 million, with a net profit of R0.5 million.
2.4 KwaZulu-Natal Ingonyama Trust Board
The Board member, Adv Robin Raubenheimer presented the report. The KwaZulu- Natal Ingonyama Trust Board was established in terms of the KwaZulu-Natal Ingonyama Trust Act (1994) as amended. The Board, Chaired by His Majesty the King (or his nominee) and eight other members appointed by the Minister of Agriculture and Land Affairs, came into operations in October 1998 to administer the affairs of Ingonyama Trust.
2.5 Khula Land Reform Credit Facility
The third annual report was of Khula. The General Manger, Mr George Mothoa presented the report. The focus of the presentation was on progress made since the last, prospects, challenges, inequitable Provincial spread Portfolio mix, capacity building and financial statements.
2.6 Ncera Farms (Pty) Ltd
The fourth annual report presented was of Ncera Farms. The Chairperson of the Board, Mr Tommy Marais presented the report. The main focus was on the establishment of the Service Centre, services to be rendered by the centre, progress made, the new Board appointed by the Minister, and audited financial statements.
- COMMITTEE OBSERVATIONS
Based on 2004/05 annual reports and audited financial statements presented, the Committee has generally observed that:
• The 2004/05 annual reports of the Department of Land Affairs and
associated entities have provided information on service delivery
and reported on financial statements, management and audit reports
against the performance targets and budgets as outlined in the
strategic plans / business plans and Estimates of National
Expenditure.
• In terms of Audit opinions, the financial statements fairly
present, in all material respects, the financial position of the
department and its entities at 31 March 2005 and the result of
their operations and cash flows for the year then ended, in
accordance with prescribed accounting practices and in a manner
required by the Public Finance Management Act, 1999 (Act No. 1 of
1999).
• Tabling of 2004/05 annual reports and financial statements of the
Department of Land Affairs and public entities to Parliament by the
Minister of Agriculture and Land Affairs has complied with the
requirements of the Public Finance Management Act.
- REPORT
The Portfolio Committee on Agriculture and Land Affairs, having considered the Annual Reports and Financial Statements for 2004/05 of the Department of Land Affairs and the public entities reporting to the Minister during the extended briefing sessions, reports as follows:
- ANNUAL REPORTS AND FINANCIAL STATEMENTS FOR 2004/05 OF DEPARTMENT OF LAND AFFAIRS AND PUBLIC ENTITIES
On the 1st of November 2005, the Committee completed its oversight work on the reports of the Department of Land Affairs and the associated entities, namely, the Commission on Restitution of Land Rights, Bala Farms (Pty) Limited, and the KwaZulu-Natal Ingonyama Trust Board.
2.1 DEPARTMENT OF LAND AFFAIRS
The Director-General, Mr Glen Thomas presented the annual report. The main focus of the presentation was on performance review highlights for the period 1 April 2004 and 31 March 2005 targets and achievements related to programmes such as Land Restitution, Land Redistribution, Land Tenure, and financial review per programme expenditure (that is, Administration, Surveys and Mapping, Cadastral Surveys, Restitution, Land Reform, Spatial Planning and Information, and Auxiliary and Associated Services.
First, the Department of Land Affairs derives its mandate from Section 25 of the Constitution of the Republic of South Africa Act, 1996 (Act 108 of 1996), which protects property rights while placing an obligation on the State to implement land reform. Therefore, the Department has the responsibility of providing access to land and extend rights in land, with particular emphasis on the previously disadvantaged communities.
Expenditure per programme for 2004/05
Programme 1: Administration
The programme provides strategic and logistical support in the form of executive and corporate services. For the period under review the expenditure of the programme amounted to R192 018 million that is 97% of the R198 447 million budget.
Programme 2: Surveys and Mapping
The objective of the programme is to enhance planning and monitoring of land reform, national infrastructure and sustainable development by providing accurate, up to date and accessible maps and other geo-spatial information. For the period under review the expenditure amounted to R65 597 million that is 95% of the R68 993 million budget.
Programme 3: Cadastral Surveys
Key objective of the programme is to develop and maintain a high quality cadastral survey system in order to support and facilitate all land development including land reform. For the period under review the programme expenditure amounted to R79 044 million that is 98% of the R80 336 million budget.
Programme 4: Restitution
Key objective of the programme is to have persons or communities dispossessed of property after 19 June 1913, as a result of past racial discriminatory laws and practices, restored to such property or receive just and equitable compensation.
The overall target of 74% has been achieved, 59 345 claims settled by the end of financial year, 20 351 claims outstanding. 6 536 settled claims are rural, while 52 809 are urban. There was a 68% increase in the number of claims settled in 2004/5 in relation to 2003/4. A total of 10 520 land claims were settled in the financial year. A total of 207 527 hectares were awarded in 2004/5 financial year. For the period under review the programme expenditure amounted to R1 182 780 billion that is 99.8% of the total budget.
Programme 5: Land Reform
Programme focus is to ensure that sustainable benefits of economic growth accrue to previously disadvantaged communities, groups and individuals through the provision of land rights to achieve increased income levels, productive land use and well-planned human settlements. For the period under the review, the programme expenditure amounted to R453 653 million that is 96% of the total budget of R472 753 million.
Programme 6: Spatial Planning and Information
The programme aims to establish an effective and efficient system of spatial planning, land use management and spatial information to support development and land reform in South Africa. For the period under review, the programme expenditure amounted to R15 180 million that is 86% of the total budget of R17 722 million.
Programme 7: Auxiliary and Associated Services
The programme provides auxiliary services and services associated with the departmental aims through its sub-programmes. For the period under review, the programme expenditure amounted to R2 624 million that is 32% of the total budget of R8 224 million.
The total allocation to the Department was R2 031 882 billion. The total actual spending for the same period was R1 990 899 billion that is 98% of the total budget. The report reflects under-spending by 2% of the budget.
Audit opinion
The financial statements fairly present, in all material respects, the financial position of the Department of Land Affairs at 31 March 2005 and the results of its operations and cash flows for the year then ended, in accordance with the Public Finance Management Act (Act No. 1 of 1999) as amended.
Matters of emphasis:
• Forensic investigation into the Regional Land Claim Commissions
(RLCCs); and
• Internal control weaknesses
COMMITTEE OBSERVATIONS
The Committee interrogated the report intensely and raised the following concerns:
a) The lack of sufficient capacity within the Department.
b) Relations between the spheres of government in relation to planning
and implementation of government programmes and projects.
c) The challenges imposed by implementation of Comprehensive
Agricultural Support Programme (CASP).
d) High land prices especially when the Government becomes a willing
buyer.
e) There is no mechanism and data in place to monitor farm evictions.
f) The non-application of the expropriation as a means to acquire
land.
g) Municipalities selling land to foreigners.
h) Amalgamation of Extension of Security of Tenure Act & Labour
Tenants Act have their own challenges;
i) People evicted in most cases do not have legal support.
j) Strategic partners in some projects have a major share holding.
WHILE THE COMMITTEE ACCEPTED the report, it also commended the Department on the expenditure patterns compared to the previous years.
AND FURTHER RECOMMENDED THAT the department must table the implementation plan of the Land Summit recommendations.
2.2 COMMISSION ON RESTITUTION OF LAND RIGHTS
The Chief Land Claims Commissioner and the Chief Financial Officer, presented the Annual Report:
a) Strategic Objective and Mandate of the Commission To provide equitable redress to victims of racial land dispossession in terms of the restitution Act No. 22 of 1994 as amended; To provide access to rights in land, including land ownership and sustainable development; Foster national reconciliation and stability; and Improve household welfare, underpinning economic growth, contributing to poverty alleviation
b) Financial Perspective: Details of Expenditure
Transfer Payments
- Land Acquisition R 489 554 million;
- Financial Compensation R 505 286 million; and
- Development Grants R 23 774 million
Compensation of Employees R79 617 million
Goods and Services R80 590 million
Capital Assets R3 405 million
TOTAL R 1.1 billion
c) Total Financial Commitments for all claims settled to date
Land Acquisition R1.7 billion Financial Compensation R 2.4 billion Restitution Grants R 0.316 billion Settlement Planning Grant R 0.142 billion
Total Transfer Payments R4.6 billion (Land Acquisition is linked to restitution grants for purposes of sustainable development. This amounted to R2.1 billion for claims settled to date).
d) Funding of Restitution Programme
The funding of restitution programme has demonstrated the political will to support land reform in general and restitution in particular. President, in the State of the Nation Address gave a three-year extension for finalization of the outstanding land claims. Minister of Finance in the Budget Speech of 22 February, announced R 6 billion increase on the restitution budget over the next three years.
e) Critical Issues: Customer Perspective
Financial Compensation as a form of redress
• Attractive to poor to address poverty related needs;
• Does not offer lasting solutions to poverty;
• Does not contribute to resolving the problem of skewed ownership;
• Leads to family disputes and fraud.
Land Restoration
• 887 093 hectares have been delivered by restitution to date;
• More than 172 769 households have benefited;
• Resettlement on restored land is problematic as the establishment
of human settlement is a long process involving bulk
infrastructuire (water, roads, electricity, housing etc);
• Re-skilling of restitution beneficiaries is a long process,
especially for highly commercial agriculture;
• Rely on Provincial Department of Agriculture for capacity building
and training of claimants;
• Meetings were held with AgriSA to discuss mentorship/development
programs, but not much has come out of the general agreement;
• More post-settlement support needed for claimants including
technical assistance, financial services, project management,
entrepreneurship, business training;
• Some traditional Leaders wrongfully believe that land restored to
the claimant community is their personal property. This matter
still needs to be addressed with the Leadership of Traditional
leaders;
• The Commission is speaking to NGOs about their support to
restitution beneficiaries so that they can make optimal use of the
restored land;
• There is an increasing number of people who would like the
Restitution Act to be amended to allow for re-opening so that new
land claims can be lodged. Minister has ruled re-opening out mainly
for the following reasons:
a) Most urban claimants want financial compensation, which defeats the
main aims of land redistribution;
b) Restitution was intended to be a symbolic apology by new democratic
government to the victims of racial land dispossession;
c) The cut-off dates were to ensure certainty and economic stability;
d) The claims lodged require R 17 billion to settle, re-opening would
attract too many new claims, which the state find it difficult to
afford; and
e) Those who still want land can be referred to other land reform
programmes of government.
Process MAP for Settlement of claims include the following stages:
• Lodgment and registration of claims;
• Validation (acceptance criteria)
• Claimant verification (ID books, family trees, affidavits etc)
• Valuation of land rights lost (use of independent Professional
Valuers);
• Negotiations (landowners, claimants and other stakeholders);
• Options assessment (financial compensation, restoration,
feasibility studies);
• Referral (Minister or Land Claims Court)
• Implementation of Restitution Award (land use plans, development
plans etc).
All the stages have different sub-processes. Rural claims take much longer to process than urban claims. Commission agreed to shorten the cycle by for rural claims from three years to one year. Procurement of goods and services still takes a long time and thus delaying for example the appointment of Service Providers for some of processes such as claimant verification or valuations. The introduction of Supply Chain Management by Department of Land Affairs will help to address procurement issues. The issue of determining just and equitable compensation, in line with Constitution, is still a challenge in some cases, given the collusion between Valuers and Landowners.
In Mpumalanga, the Commission has noticed the over-statement of land values in some of the Badplaas farms. Legal steps have been taken to correct this. Landowners still continue demanding high prices for land. The booming economy and Land reform may have contributed to the increase in demand for land which may influence the increase in land prices. Government intervention may be necessary for stabilizing land prices. This may include introducing:
• Ceiling on the size of land ownership;
• Ceiling on land prices;
• Land tax based on size of land owned; and
• Pursuit of expropriation
Packaging of settlement of claims with highly commercial agricultural projects, such as sugar cane, forestry, citrus, banana etc requires business modelling, hence the use of Strategic Partnerships. Commission is working closely with some Municipalities.
F) Corporate Governance Perspective: Balanced Scorecard
State is the shareholder hence the Commission is tabling the report to Parliament. The same report will be shared with Provincial Governments and Municipalities. Commission held its statutory (section 5 of Restitution) Commissioners meetings this year where discussion among others on:
• Implementation Plan (High drive 2008) which was presented to the
Committee on the 18 March 2005;
• Strategic Planning for settling outstanding claims;
• Review progress reports from each RLCC;
• Budget and expenditure review;
• Risk management (Risk register and Risk Management Committee);
• Staffing of the Commission.
g) Land Claims Court Cases
• Mashilane Community vs Minister (LCC No. 74/2003). Aventura
Blydepoort & Swadini, Court held that the Minister must take the
administrative decision to finalize the claim;
• Mhlangu N vs Minister (SCA No. 572/2003). SCA decided that the LCC
should adjudicate on the validity of the claim;
• Mandla C Khumalo vs Minister (LCC No. 109/99). Court decided to
give restitution award in favour of the claimant;
• Richtersveld Community vs Alexkor and Government (LCC No. 151/98).
Constitutional Court confirmed finding of SCA, awarding land plus
mineral rights and precious stones to the community;
• JMC Prinsloo and Botha Famity Trust vs Ndebele Ndzundza community
decided to accept the validity of the claim and confirmed the
decision of the Land Claims Commission.
COMMITTEE OBSERVATIONS
THE COMMITTEE CONSIDERED THE REPORT AND NOTED:
a) The progress made by the Commission despite the difficulties and
enormous challenges and problems;
b) The Committee will continue supporting the Commission when ever it
is possible;
c) On the other hand, the Commission must also avail information to
the committee in relation bottle necks;
d) The issue of Districts and Local Municipalities in relation to
sound financial management needs to be attended;
e) The role and contribution of Strategic partners in the restitution
process needs to be considered to ensure that beneficiaries do not
loose out in such relationships;
f) The non-utilization of the Expropriation by the Commission despite
being constitutional in terms of Section 25(2) of the Constitution
of the Republic;
g) The uncooperative role played by organised agriculture in the
restitution process; and
h) The role played by unscrupulous valuers in relation to land prices
in the country.
AND THEREFORE, THE COMMITTEE AGREED to adopt the Annual Report of the Commission.
FURTHER AGREED THAT:
a) In the provinces, there are still many practical challenges that
need to be addressed;
b) The people who missed the 31 December 1998 deadline, can in terms
of the Section 6(2)(b) of the Act, make use of other Government
programmes such as the Redistribution and Land Tenure.
2.3 BALA FARMS (PTY) LIMITED
Bala Farms (Pty) is a state-owned company created by the former Bophuthatswana administration to buy and administer farms outside the homeland territory. The company is being deregistered in line with the Department’s land reform policy. A new deadline of 31 March 2005 was set. Properties which have not been disposed-off by that date will be transferred to the Department of Land Affairs for disposal.
On progress on the properties remaining, the company reports that 4 farming units consisting of 7 farm portions had to be transferred to the identified beneficiaries. Portions 41, 64, 83 of farm Grootfontein 115 JO have been transferred to Department to complete the disposal process, as this was delaying de-registration. Portions 22 of farm Blaauwbank 127 JO has also been transferred.
On the remaining properties, the company reports that Portion 2 of farm Logaga 124 KP has been disposed of. Portion 14 of farm De Putten 56 JO has been transferred free of charge to beneficiary community.
Deregistration Process meant that first, all assets and liabilities had to be liquidated or ceded to the Department. All debts were settled including an amount of R1.5 million owed to the North West (Loan was originally provided by Agricor). The last payments by the company were made on 9 March 2005 and a cession of all existing claims in favour of or against the company had to be issued as a contigent. All outstanding lease rentals were collected and pro rata payments for remaining periods of the leases were paid over to beneficiaries.
Second, a Certificate of compliance has to be issued by South African Revenue (SARS). A dispute with SARS regarding the money owed to or by the company took longer to resolve than anticipated. Nevertheless, this was resolved in March 2005 after after excellent co-operation with SARS staff and in depth analysis of all matters relating to VAT and Income Tax. The final results have been incorporated into the financial statements of the company for 2004/5 financial year. The final certificate will be issued to the Registrar of Companies after the 2005 audit has been completed. SARS was requested to cancel the company’s registration for PAYE, SDL & VAT.
Third, relevant resolutions had to be taken by the Board, that is, the deregistration of the Company; the transfer of shareholding from Chairperson of Company to the Department; the payment of the pre- deregistration dividend of R 15.3 million declared and paid to the Department on 23 March 2005; and the application of deregistration was sent to the Registrar on 30 March 2005.
Finally, accounting, auditing and legal matters had to be satisfied. All bank accounts have been closed subsequent to the payment of the pre- deregistration dividend; the financial statements were compiled in March 2005; the Auditor-General has commenced with the final audit of financial statements. Once the audit is complete, the statements will be lodged with SARS. The Registrar of Companies will then in a position to deregister the company because the company will hold no further liabilities for Income Tax, VAT, PAYE or SDL.
The company has ceased its operations and the final deregistration is now in the hands of the Auditor-General, the South African Revenue Service and the Registrar of Companies.
Audit opinion
The financial statements fairly present, in all material respects, the financial position of Bala Farms (Pty) Ltd at 31 March 2005 and the results of its operations and cash flows for the year then ended, in the manner required by the Public Finance Management Act (Act No. 1 of 1999) as amended and the Companies Act, 1973 (Act No. 61 of 1973)
COMMITTEE OBSERVATIONS
The Committee considered AND ACCEPTED THE REPORT AND FURTHER APPRECIATED the work done by the Company and the Department for completing deregistration process within stipulated time and for complying the instruction. 2.4 KWAZULU-NATAL INGONYAMA TRUST BOARD
The KwaZulu-Natal Ingonyama Trust Board was established in terms of the KwaZulu-Natal Ingonyama Trust Act (1994) as amended. The Board, Chaired by His Majesty the King (or his nominee) and eight other members appointed by the Minister of Land Affairs, came into operation in October 1998 to administer the affairs of the Ingonyama Trust.
The core business of the trust is to manage its 2.7 million hectares of land, spread throughout KwaZulu-Natal, for the material benefit and social well-being of individual tribe members. Activities undertaken by the board include: transferring townships to local authorities; granting permissions to occupy (PTOs); granting servitudes; issuing leases; identifying and transferring land for state domestic purposes; registering assets; minerals administration; restructuring state forests; compiling asset registers; and developing a land tenure information system.
The Board has granted 130 leases covering 10 000 hectares, which generates revenue of about R600 000 a year. A further 12 leases are being processed, covering 1 684 hectares with an estimated revenue of R145 000 per year. The leases cover land for diverse uses, such as shopping centers, game parks, residential developments, lodges, petrol filling stations, telecommunication base stations, sugar cane farming, grazing and aquaculture projects.
A total income of R12.5 million was earned for 2004/5, through rental income, royalty income other incomes derived from investment, grant in aid receipts. Expenses amounted to R12.5 million as a result of administration and other expenses including provisions. The net income for the year amounted to R3.7 million.
The following programmes will be implemented over the medium term:
• Finalizing the transfer of KwaZulu-Natal townships to local
authorities, establishing township registers and upgrading
tenure rights;
• Extending the security of tenure on trust land and providing
rental income to communities living on trust land;
• Concluding the registration of all vested assets in the name of
the trust, which involves the consolidation and registration of
titles for each traditional authority area (the trust currently
holds 1 478 titles); and
• Finalizing the transfer of land used for state purposes to
relevant government Departments and municipalities.
Audit opinion:
The Auditor-General did not express an opinion on the financial statements because of the significance of the matters.
EMPHASIS OF MATTER: without further qualifying the audit opinion, attention is drawn to the following matters:
• Contingent liability arrear rates – Municipalities
• Internal audit and audit committee
• Weaknesses in internal control; and
• Non-compliance to the PFMA
COMMITTEE OBSERVATIONS
While the committee accepted the report, it was concerned about the issues raised by the Auditor-General.
AND RECOMMENDED THAT:
• The issues be referred to Standing Committee on Public Accounts
(SCOPA) for further interrogation;
• The Department of Land Affairs must also provide responses on
the issues.
2.5 KHULA LAND REFORM CREDIT FACILITY
Khula Land Reform Empowerment Facility is a Section 21 Company that was formed by Khula Enterprise Finance Limited in 2003 as mandated by the Department of Land Affairs, to advance monies received from donors for the establishment of commercially viable projects on redistributed land. Khula Enterprise Finance established in 2003. Since it is a Section 21 Company, Khula enterprise Finance Limited cannot benefit from the company in terms of the Companies Act, and therefore Khula Land Reform Empowerment Facility is not considered to be a subsidiary of its founding company.
Khula Land Reform Empowerment Facility earns its revenue from loan funding advanced and through grants received mainly from the Department of Land Affairs, Department of Environmental Affairs and the European Union.
Audit opinion: The financial statements fairly present, in all material respects, the financial position of the company at 31 March 2005, the results of its operations, changes in equity and cash flows for the year then ended, in accordance with South African Statements of Generally Accepted Accounting Practice, and in manner required by the Public Finance Management Act of 1999, as amended.
COMMITTEE OBSERVATIONS
THE COMMITTEE CONSIDERED the report and expressed the following concerns:
a) The funds are channelled through commercial Banks, and there is no
mechanism to monitor whether rates charged are not exorbitant.
b) The projects funded by the Entity are not visible in other
provinces.
c) The relationship between Khula and Land Bank is not clear although
the goal is one.
d) The relationship with Sector Education and Training Authority
(Agriculture SETA) is not clear.
The Committee accepted the report. 2.6 NCERA FARMS (PTY) LTD
Ncera farms (Pty) Limited is a public company listed under schedule 3B in terms of the PFMA as amended, with the Department as the sole shareholder. It is situated in the Eastern Cape on state-owned land of approximately 4 000 hectares, and is dedicated to assisting small and emerging farmers through providing various services to the surrounding rural communities in the form of advice, extension services, training and so on.
Government transfers to the company over the MTEF period are projected at R2.4 million, R2.5 million and R2.7 million.
Budget allocation for 2004/5 is constituted of Transfer from the Department of Agriculture of R2 240 million, plus own revenue raise of R1 016 million. Total funds available R3 256 million. The actual expenditure for 2004/5 was R2 831 million. The expenditure relates to personnel, administrative, veterinary and medicine cost, maintenance, transport, water and electricity, and security services.
Internal Audit Report
The report of the Internal Audit and Financial Statements was reviewed and revealed no problems with regard to internal control or cases of non- compliance to the requirements of the Public Finance Management Act, 1999.
COMMITTEE OBSERVATIONS
The Portfolio Committee interrogated the report intensely and raised the following concerns: a) Management fees were too high for example, personnel expenditure is 19.9 %, administrative 10.8% and management fees 36% of the total budget. b) Sustainability of the farms where the Department is withdrawing; c) The welfare of workers in the project; d) The optimum utilization of the Service Centre by surrounding communities; and e) Effective transfer of skills to beneficiaries.
The COMMITTEE accepted the annual report;
AND REQUESTED TO BE provided with a full report on the profitability and activities to take place in the Enterprises.
- CONCLUSION AND RECOMMENDATIONS
Having considered the 2004/05 annual reports and financial statements of the Department of Land Affairs and its public entities, the Portfolio Committee recommends that:
• While the committee accepted the reports presented, the Department of
Land Affairs makes transfer payments to Provincial Governments, Local
Authorities and community based legal entities on the basis of Agency
Agreements. The purpose of such transfers is to facilitate the
implementation of projects such as infrastructure, tenure, and
agricultural support arising from the restitution and redistribution
of land to beneficiaries.
• The Department of Land Affairs must remain accountable for the
expenditure of such transfer funds. Compliance in terms of the
Division of Revenue Act needs to be examined to assess whether that
the nature of these transactions does not fall within the ambit of the
law so that those institutions who do not comply, necessary mechanisms
could be taken to rectify the situation.
• The Committee extends special appreciation to Department of Land
Affairs and all associated entities for attending the annual report
hearing sessions and requesting all matters of concern would be
attended.
-
Report of the Portfolio Committee on Foreign Affairs on the Annual Report of the Department of Foreign Affairs 2004/05, dated 9 November 2005:
The Portfolio Committee on Foreign Affairs having considered the Annual Report of the Department of Foreign Affairs 2004/05, referred to it, reports that it has completed its deliberations thereon.
-
Report of the Standing Committee on Public Accounts on Study Tour to Mozambique, dated 8 November 2005:
The Standing Committee on Public Accounts, having undertaken a study tour to Mozambique from 31 July – 03 August 2005, reports as follows:
- Introduction
The Standing Committee on Public Accounts undertook a study tour to the Mozambican Parliament. The purpose of the study tour was to obtain insight into the procedural operations of the Public Accounts committee and the Finance committee in the execution of their oversight of public finance management.
It was also the Committees intention to gain an understanding of the audit process followed in Mozambique. In the Committees interaction the Committee sought to determine the style, approach and methodology of their engagement with the executive, their system of dealing with and prioritization of audit reports and their progress in performance auditing.
The interaction allowed the delegation to gain first hand knowledge of the management and conduct of the Public Accounts Committee in the handling of their general state of accounts and its interaction with other relevant committees and stakeholders such as the Administrative Tribunal, assigned with auditing functions.
Furthermore, the committee sought to establish links with Mozambican public representatives and institutions at national level.
- Delegation
The Delegation consisted of the following members:
African National Congress
Dr G Koornhof Mr D Gumede Ms L Mabe Mr R Mofokeng Ms L Mashiane
Democratic Alliance
Ms A Dreyer
United Democratic Movement
Mr G Madikiza
United Christian Democratic Movement
Mr B Pule
Committee Secretary accompanying the Delegation
Mr G Dixon
Office of the Auditor-General
Ms N Hlasa Ms Z Keto
- Courtesy visit to the SA High Commission in Mozambique
The delegation paid a courtesy visit to the South African High Commissioner, Ms Thandi Lujabe Rankoe, who briefed the Committee on South African / Mozambican relations and Bi-lateral Agreements between the two countries. The report, attached as Annexure A, is included for the record.
The First Secretary Consular, Ms NC Nyamande, briefed the committee on labour movements between the two countries, including visa control and border post detention centres.
Amongst the issues highlighted were:
A. Deportation problems such as the unavailability of funds to assist
people awaiting deportation. (e.g accommodation, food, medication)
B. Difficulty with regard to the verification of SA Citizens, due to
the fact that they enter Mozambique without the proper
documentation.
(Please see the attached report for further information)
- Meeting with the Planning and Budget Committee Chairperson in the Mozambique Parliament
The Mozambican Parliament was in recess at the time of the visit and the Chairperson, Mrs Virginia Verdeia, kindly took time out of her constituency work to assist the delegation. The Mozambican Parliament sits for 90 days per year. The 1st Semester is from 01 March to 10 May. The recess is until 15 October. The second semester is from mid-October to the first week in December.
The Mozambican Parliament is composed of eight specialized commissions. They are:
i. Planning and Budget
ii. Social Affairs, Gender and Environment iii. Economic Activities and Services
iv. Defence and Public Order
v. Agriculture, Regional Development, Public Administration
and Local Government
vi. Internal Relations vii. Legal Affairs and Human Rights viii. Petitions
The Planning and Budget Committee was the closest committee that fit the description of a public accounts committee in Mozambique.
The majority party, FRELIMO, chairs the Planning and Budget Committee. Ten FRELIMO members and five members of the RENAMO Electoral Union proportionally represent the Committees membership.
The oversight role of the Planning and Budget Committee is more in line with South Africa’s Joint Budget Committee, than the South African system of SCOPA and Auditor-General. The Mozambican system uses the Planning and Budget committee to oversee the approval of the Budget and the Judiciary body known as the Administrative Tribunal to investigate the financial statements submitted by government departments.
- Planning and Budget Committee’s Oversight Role
The Ministry of Finance prepares a budget proposal known as the Plano Economico e Social (PES), the English translation is the “Economic and Social Plan”, by the end of September of each year and tables this state budget to Parliament. This budget proposal is debated and approved by Parliament during its second session from October to December.
During the budget drafting process, before September, the Planning and Budgeting Committee conducts oversight visits of the various Provinces during the constituency period. Their focus is to evaluate the execution of the first semester’s budget. Provinces discuss with the Planning and Budget Committee proposals they have for the new budget, problems that they have experienced and issues that need addressing. This preparatory work allows this committee to analyse the budget proposal submitted by the Ministry of Finance at the end of September. During this period of oversight visits, the other committees in Parliament conduct similar visits in order to address the budget proposals in their areas of competence.
During the second semester deliberations, from October to December, the Planning and Budget Committee can call Ministers to discuss the proposals made. Each Committee, including the Planning and Budget Committee, will revise the proposal in its respective area. The reports on the budget proposal are tabled and discussed in the plenary session of Parliament.
It must be noted that the Planning and Budget Committee does not interrogate each department’s audited financial statements or accounts. According to law, a court of law known as the Administrative Tribunal performs this function. The Planning and Budgeting Committees main focus is the global picture of the general state of the accounts, produced by the Ministry of Finance.
- The Administrative Tribunal and the Oversight of Financial Management
The Administrative Tribunal is a judicial body that has the responsibility of auditing the financial institutions. Its function is equivalent to that of the Auditor-General of South Africa but it plays a further multi-functionary role in the oversight of public finances.
The Administrative Tribunal inter alia focuses on the following issues with regard to public finances:
- It performs the audits of the financial statements
- It interrogates the audited financial statements
-
It administers government contracts
5.1 Auditing of financial statements
There are three types of audits:
- Prior inspections
- Audits of departments
-
General account
5.2 Prior inspections
The Administrative Tribunal reviews the governments contract proposals for a specific activity. Procurement contracts are assessed according to legislation and compliance with regulations. The Administrative Tribunal also expresses an opinion on the necessity of the specific activity.
5.3 Audits of departments
Each state institution prepares its financial statements, which are accounts on the execution of the budget. These financial statements are sent to the Administrative Tribunal which interrogates the statements and expresses an opinion on them.
The Administrative Tribunal possesses the required skills level to assess the accounts and is tasked with this process by law. After the review, the Administrative Tribunal has the power to investigate and report financial misconduct and can impose sanctions and mete out punishment to offending officials. The legal experts follow up on the legal and financial sanctions that should be taken. There are three sanctions applicable: - Disciplinary procedures - Criminal procedures - Financial procedures
The ability to impose criminal and financial sanctions is considered a strength of the system. The Administrative Tribunal works hand in hand with other judiciary bodies to investigate the person/s responsible for mismanagement and to determine the applicable charge. Disciplinary procedures are left to the Ministry of Finance to implement.
5.4 General Account
The General Account is prepared by the Minister of Finance and is sent to the Administrative Tribunal. The Administrative Tribunal prepares a report or opinion on the General Account. The Administrative Tribunal has no decision-making powers in regard to the General Account but expresses an opinion and tables it to Parliament.
The National Treasury Directorate in the Ministry of Finance assesses the review. The Ministry of Finance uses the information in preparation for the tabling of the report to Parliament.
The Administrative Tribunal’s involvement in this process is similar to the Auditor-General of South Africa’s external audit of accounts. The Ministry of Finance’s report is referee to the Planning and Budget Committee. The Administrative Tribunal strongly criticizes the administration of the state accounts and the Planning and Budget committee often has to call both the Administrative Tribunal and Ministry of Finance to investigate the difference of opinion. The Planning and Budget committee has the final opinion with regard to the general account.
- Ministry of State Administration
The Ministry of State Administration was established in 1995. Its function is to control the activities of the Ministries particularly in terms of local municipalities. Initially it did not have enough staff to carry out its functions effectively. The Ministry of State Administration was re-organized and in 2004 its complement was increased to effectively carry out its mandate.
Its investigations reveal that there was a relaxed attitude to the adherence to rules and regulations pertaining to the budget and human resources. In several instances the departments and institutions did not follow rules or know that these rules existed.
The Ministry of State Administration now has inspectorate teams carrying out inspections on two provinces per month. In addition each Ministry carries out sector specific inspections such as in labour, health, education, etc.
The Ministry of State Administration is presently revising the concept of inspections. The issue is whether to specialize on specific portfolios or do inspections on a global scale with regard to the legal framework applicable for financial management, human resources and implementation of ministerial policy
- Portfolio Committee on Agriculture, Administration and Local Government
The Committee is composed of 15 MPs proportionally represented by ten FRELIMO and five RENAMO Electoral Union members. The committee is divided into three sub-groups composed of:
- Agriculture
- Regional development
- Public administration and local government The committee’s involvement in the budget process is to conduct visits to institutions and investigate their plans for the budget. The committee conducts oversight visits to determine the extent of work already carried out. The committee reports and expresses an opinion on those observations.
- Ministry of Finance
Organization of the Ministry
The Permanent Secretary is a recent appointment. The Prime Minister based on the Minister’s proposals appoints the Permanent Secretary. The appointee fulfills the role of technical and administrative functions and works with the Minister.
8.1 National Directorates
Planning and Budgeting: Preparation of budget Public Accounts: Follow-up execution of budget and prepares a quarterly report. At the end of the year the Permanent Secretary prepares the General Account.
National Treasury:
i. Financial planning
ii. Make payments
iii. 3 months financial report
iv. Management of debt
v. Responsible for international relations
vi. Oversee Public Enterprises
vii. Central Bank
The Ministry also has a General Directorate of finances that acts as the internal audit body.
- Conclusion
The Administrative Tribunal’s role has a number of advantages in terms of oversight. It is equipped with the legal framework to assess the financial statements, investigate maladministration and prosecute offenders. It gives the exercise of overseeing the expenditure of public finances the power to enforce its findings and resolutions.
The Auditor-General system and the court system have strengths and weaknesses that should be discussed. The major shortcoming of the court system is that there is a distance between the interaction of the Planning and Budget committee and the Administrative Tribunal. The Planning and Budget Committee proposed further interaction with SCOPA at the Southern African Development Community Organisation of Public Accounts Committees (SADCOPAC) level. It is in favour of brainstorming the most suitable system for oversight of public finances in Southern Africa.
Thanks and appreciation
In most instances the Committee achieved the purpose of the tour by obtaining comparative insight into the operations, procedure and methodology of the Public Accounts, Audit and Finance Committees in the execution of the oversight and monitoring of public finance management. The interaction with the Planning and Budget committee was fruitful and we established favourable links with the members of the committee.
One of the challenges the delegation had to face related to the apparent differences between the Portuguese system and the Westminster system of government. The interaction was often disjointed and common ground had to be established before a fruitful discussion could commence. The language barrier posed another challenge, however, the translator provided by the South African High Commission was of tremendous help in regard to understanding the concepts used in Mozambique.
The Committee extends its thanks and appreciation to the Mozambique Chairpersons of the Planning and Budget committee, the Portfolio Committee on Agriculture, Administration and Local power, the National Treasury, the Ministry of Public Administration for affording the Committee the time out of its busy schedules. The Committee further acknowledges the invaluable assistance rendered by the High Commission to the success of the tour. The initial study tour proposal included a visit to the Kenyan Government. Due to the Kenyan Parliamentary recess, this leg is postponed until further notice.
[SEE ANNEXURE - scan hardcopies From pages 2733 – 2754]
Report to be considered.
TUESDAY, 15 NOVEMBER 2005
ANNOUNCEMENTS:
National Assembly and National Council of Provinces
The Speaker and the Chairperson
- Bills passed by Houses – to be submitted to President for assent
(1) Bill passed by National Council of Provinces on 15 November
2005:
i) Patents Amendment Bill [B 17B – 2005] (National Assembly – sec
75) National Assembly:
The Speaker
-
Messages from National Council of Provinces to National Assembly in respect of Bills passed by Council and transmitted to Assembly
1) Message from National Council of Provinces to National AssemblyBill, as amended, passed by National Council of Provinces on 15 November 2005 and transmitted for consideration of Council’s amendments:
i) Repeal of Black Administration Act and Amendment of Certain Laws Bill [B 25D – 2005] (National Assembly – sec 76) -
Referrals to committees of papers tabled
(1) The following paper is referred to the Portfolio Committee on
Housing for consideration and report. The Report of the Independent
Auditors on the Financial Statements is referred to the Standing
Committee on Public Accounts for consideration:
a) Report and Financial Statements of the National Housing
Finance Corporation Limited for 2004-2005, including the
Report of the Independent Auditors on the Financial Statements
for 2004-2005. (2) The following paper is referred to the Portfolio Committee on Labour
for consideration and report. The Report of the Auditor-General
on the Financial Statements of Vote 17 is referred to the
Standing Committee on Public Accounts for consideration:
a) Report and Financial Statements of Vote 17 – Department of
Labour for 2004-2005, including the Report of the Auditor-
General on the Financial Statements of Vote 17 for 2004-2005
[RP 113-2005].
(3) The following papers are referred to the Portfolio Committee on
Water Affairs and Forestry for consideration:
a) Government Notice No 763 published in Government Gazette No
27846 dated 05 August 2005: Correction Notice to amend
Government Notice No 533 published in Government Gazette No
27641 dated 10 June 2005 to substitute the word “Calitzdorp”
for “Ladysmith”.
b) Government Notice No 767 published in Government Gazette No
27846 dated 05 August 2005: Notice of List of Protected Tree
Species, made in terms of section 15(3) of the National
Forests Act, 1998 (Act No 84 of 1998).
c) Government Notice No 780 published in Government Gazette No
27859 dated 01 August 2005: Rates and charges, made in terms
of section 11 of the Water Research Act, 1971 (Act No 34 of
1971).
d) General Notice No 1391 published in Government Gazette No
27877 dated 05 August 2005: Publication of draft Forestry Laws
Amendment Bill for comment.
(4) The following paper is referred to the Portfolio Committee on
Agriculture and Land Affairs for consideration. The Report of the
Independent Auditors on the Financial Statements is referred to the
Standing Committee on Public Accounts for consideration:
a) Report and Financial Statements of the South African
Veterinary Council for 2004-2005, including the Report of the
Independent Auditors on the Financial Statements for 2004-
2005.
(5) The following paper is referred to the Portfolio Committee on
Trade and Industry and the Joint Monitoring Committee on the
Improvement of Quality of Life and Status of Women for
consideration and report:
a) Special Report from the South African Women Entrepreneurs – A
burgeoning force in our economy for 2005.
(6) The following paper is referred to the Portfolio Committee on
Defence for consideration and report. The Report of the Auditor-
General on the Financial Statements of Vote 22 is referred to the
Standing Committee on Public Accounts for consideration:
a) Report and Financial Statements of Vote 22 – Department of
Defence for 2004-2005, including the Report of the Auditor-
General on the Financial Statements of Vote 22 for 2004-2005
[RP 159-2005].
(7) The following paper is referred to the Portfolio Committee on
Labour and the Joint Monitoring Committee on the Improvement of
Quality of Life and Status of Children, Youth and Disabled Persons
for consideration and report. The Report of the Auditor-General on
the Financial Statements is referred to the Standing Committee on
Public Accounts for consideration:
a) Report and Financial Statements of the Umsobomvu Youth Fund
(UYF) for 2004-2005, including the Report of the Independent
Auditors on the Financial Statements for 2004-2005.
(8) The following papers are referred to the Portfolio Committee on
Trade and Industry. The Report of the Independent Auditors on the
Financial Statements is referred to the Standing Committee on
Public Accounts for consideration:
a) Group Annual Financial Statements of the National Empowerment
Fund for 2004-2005, including the Report of the Independent
Auditors on the Financial Statements for 2004-2005.
b) Report and Financial Statements of the Micro Finance
Regulatory Council (MFRC) for the year ended 31 December 2004.
(9) The following paper is referred to the Portfolio Committee on
Education and the Standing Committee on Public Accounts for
consideration:
a) Letter from the Minister of Education dated 25 October 2005 to
the Speaker of the National Assembly, in terms of section
65(2)(a) of the Public Finance Management Act, 1999 (Act No 1
of 1999), explaining the delay in the tabling of the Annual
Report of the Education Labour Relations Council for 2004-
2005.
(10) The following paper is referred to the Portfolio Committee on
Provincial and Local Government and the Standing Committee on
Public Accounts for consideration:
a) Report of the Auditor-General on the Submission of Financial
Statements by Municipalities for the financial year ended 30
June 2005 [RP 221-2005].
(11) The following paper is referred to the Portfolio Committee on
Finance. The Reports of the Auditor-General and the Independent
Auditor on the Financial Statements are referred to the Standing
Committee on Public Accounts for consideration:
a) National Treasury Consolidated Financial Information for the
year ended 31 March 2005, including:
(i) Report of the Auditor-General on the Consolidated
Financial Information of National Departments, National
Revenue Fund, State Debt and Tax and Loan Accounts of the
National Treasury (“Department”) for the year ended 31
March 2005;
(ii) Report of the Auditor-General on the Consolidated
Financial Information of Constitutional Institutions,
Schedule 2, 3A and 3B Public Entities and Trading Accounts
(“Entities”) for the year ended 31 March 2005.
(12) The following paper is referred to the Portfolio Committee on
Labour for consideration and report. The Report of the Auditor-
General on the Financial Statements is referred to the Standing
Committee on Public Accounts for consideration:
a) Report and Financial Statements of the Unemployment Insurance
Fund (UIF) for 2004-2005, including the Report of the Auditor-
General on the Financial Statements for 2004-2005.
(13) The following papers are referred to the Portfolio Committee on
Justice and Constitutional Development and the Standing Committee
on Public Accounts for consideration:
a) Letter from the Minister for Justice and Constitutional
Development dated 26 October 2005 to the Speaker of the
National Assembly, in terms of section 65(2)(a) of the Public
Finance Management Act, 1999 (Act No 1 of 1999), explaining
the delay in the tabling of the Annual Report of the Legal Aid
Board for 2004-2005.
b) Letter from the Minister for Justice and Constitutional
Development dated 26 October 2005 to the Speaker of the
National Assembly, in terms of section 65(2)(a) of the Public
Finance Management Act, 1999 (Act No 1 of 1999), explaining
the delay in the tabling of the Annual Report of the South
African Law Reform Commission for 2004-2005.
(14) The following paper is referred to the Portfolio Committee on
Agriculture and Land Affairs and the Standing Committee on Public
Accounts for consideration:
a) Letter from the Minister for Agriculture and Land Affairs
dated 27 October 2005 to the Speaker of the National Assembly,
in terms of section 65(2)(a) of the Public Finance Management
Act, 1999 (Act No 1 of 1999), explaining the delay in the
tabling of the Annual Report of Inala Farms for 2004-2005.
(15) The following paper is referred to the Portfolio Committee on
Sport and Recreation and the Standing Committee on Public Accounts
for consideration:
a) Letter from the Minister of Sport and Recreation dated 28
October 2005 to the Speaker of the National Assembly, in terms
of section 65(2)(a) of the Public Finance Management Act, 1999
(Act No 1 of 1999), explaining the delay in the tabling of the
Annual Report of Boxing South Africa for 2004-2005.
TABLINGS:
National Assembly and National Council of Provinces
-
The Minister of Labour
a) Report and Financial Statements of the Forest Industries Sector Education and Training Authority (FIETA) for 2004-2005, including the Report of the Auditor-General on the Financial Statements for 2004-2005 [RP 90-2005].
-
The Minister of Minerals and Energy
a) Report and Financial Statements of the Mine Health and Safety Inspectorate for 2004-2005 [RP 125-2005].
COMMITTEE REPORTS:
National Assembly and National Council of Provinces
-
The Speaker of the National Assembly and the Chairperson of the National Council of Provinces, as joint co-chairpersons, present the First Report of the Joint Coordinating Committee on the African Peer Review Mechanism dated 15 November 2005 as follows:
- Introduction
President Mbeki formally submitted South Africa to a peer review process under the African Peer Review Mechanism (APRM) on 28 September 2005.
The APRM is an African-owned and driven initiative that seeks to improve governance and national management. It is voluntarily acceded to by the Member States of the African Union as an African self-monitoring mechanism. The main purpose of the APRM is to encourage participating Member States to ensure that their policies and practices conform to the agreed political, economic and corporate governance values, codes and standards. It further seeks to ensure that the mutually agreed objectives in socio- economic development elaborated in the New Partnership for Africa’s Development (NEPAD) are achieved.
The process of self-assessment and review would take approximately nine months to complete (October 2005 to July 2006) and is divided into five stages:
- Stage One: A review of the country in terms of the four areas of the questionnaire. The Draft Self-Assessment Report and Draft Programme of Action on key issues identified during the self-assessment is developed for submission to the APR Secretariat. The Draft Self- Assessment Report and Draft Programme of Action are sent to Parliament for comment (December 2005), before finalisation (February 2006). The Secretariat develops an Issue Paper based on the country’s self- assessment report and programme of action and background paper prepared independently by the APR Secretariat. (October 2005 - February 2006). The Issue Paper will highlight the key issues in the country for the furtherance of democracy, good governance and socio- economic development.
- Stage Two: Visit by the APR Team for extensive consultations with all stakeholders. The country also consults widely to build consensus on how to respond to the Issue Paper. These consultations include Parliamentarians. Parliament may also have an opportunity to submit comments on the Issue paper to the APR Secretariat and the Focal Point. (February 2006 - April 2006).
-
Stage Three: The APR Team develops its report based on the consultations conducted with Government, Parliament, civil society, business sector community groups etc., country self-assessment report, and programme of action, Issue Paper and responses thereto. (April 2006 - May 2006).
-
Stage Four: The APR Team submits its report to the APRM Secretariat and the APR Panel. After deliberation by the Panel, the report is submitted to the APR Forum for consideration and formulation of actions. (May 2006 – June 2006).
- Stage Five: Public tabling of the report and related actions. This occurs six months after consideration of the report by the APR Forum. (June 2006 – December 2006).
The Country Self-Assessment for the African Peer Review Mechanism Questionnaire forms the basis of South Africa’s self-assessment. The questionnaire is divided into four sections containing specific objectives, questions and indicators. The Sections of the questionnaire are Democracy & Good Political Governance, Economic Governance and Management, Corporate Governance and Socio-economic Development.
- Background
In South Africa, the Minister of Public Service and Administration has been appointed as South Africa’s Focal Point for the process. The Minister will be responsible for the overall management of the process and will chair a National Peer review Governing Council comprising five Ministers of the South African government and ten civil society representatives.
On 16 August 2005 the Acting Minister for Public Service and Administration, Hon. Dr. EG Pahad invited Parliament to participate in South Africa’s self assessment and peer review process.
After extensive discussions to determine the most suitable location of Parliament within the country process, the Presiding Officers concluded that it is imperative that the role of Parliament reflects and upholds the democratic principles of separation of powers and independence of the legislature. Furthermore the Constitutional mandate of Parliament to maintain oversight of Executive authority and to facilitate public involvement in its processes must be respected.
Parliament is playing an active and independent role in the country self- assessment and review. This includes proactive responses to the questionnaire to be submitted to the Focal Point. Parliament will also comment on the final self-assessment report and the programme of action and make contributions to the country response to the Issues Paper prepared by the APRM Secretariat. Parliament should also have an opportunity to comment on the Country Report issued by the APR Team. The Parliamentary processes will be underpinned by a robust public involvement campaign and public debate on issues and reports to be reviewed.
One of the primary objectives of Parliament’s involvement in South Africa’s Peer Review process is to facilitate public awareness and ensure effective public participation.
- Structure
Given the short timeframe for the completion of the review process, the Speaker of the National Assembly and the Chairperson of the National Council of Provinces established joint committees in order to streamline the Parliamentary processes. With due consideration to the expertise required to further the work for Parliament’s APRM process, the Presiding Officers appointed Members of Parliament to the following joint committees:
- Joint Coordinating Committee on the African Peer Review Mechanism
❑ Speaker of the National Assembly (Joint Chairperson) ❑ Chairperson of the National Council of Provinces (Joint Chairperson) ❑ Mr O Bapela ❑ Ms F Hajaig ❑ Mr DJ Sithole ❑ Mr TS Setona ❑ Mr J Seremane ❑ Ms S Vos ❑ The Chairperson of each of the Joint Ad-hoc Committees
The following Joint Ad-hoc Committees based on the four sections of the questionnaire:
a) Joint Ad-hoc Committee on Democracy & Good Political Governance
❑ Mr R Baloyi (Chairperson) ❑ Ms H Mgabadeli ❑ Ms S Camerer ❑ Mr P Nefolovhodwe ❑ Dr P Mulder ❑ Ms Nkabinde ❑ Mr J Sibiya
b) Joint Ad-hoc Committee on Economic Governance & Management
❑ Mr V Smith (Chairperson) ❑ Mr Nkem Abonta ❑ Mr M Lowe ❑ Mr L Greyling ❑ Ms F Mahomed ❑ Ms J Semple ❑ Ms H Lamoela[1]
c) Joint Ad-hoc Committee on Corporate Governance
❑ Ms B Hogan (Chairperson) ❑ Ms S Seaton ❑ Mr L Labuschagne ❑ Mr V Gore ❑ Mr I S Mfundisi ❑ Ms H Bogopane Zulu ❑ Mr MA Sulliman
d) Joint Ad-hoc Committee on Socio-economic Development ❑ Mr R Mohlaloga (Chairperson) ❑ Ms L M Mashiane ❑ Mr SJ Njikelana ❑ Ms C Dudley ❑ Ms S Kalyan ❑ Ms U Roopnarain[2] ❑ Ms NF Mazibuko
Dedicated administrative, research and committee support staff assist each joint committee.
5. Mandate of Joint Committees
The Joint Coordinating Committee was established to inter alia:
❑ Develop a broad programme for the Joint Ad-hoc Committees that parallels the roadmap for the review process emanating from the broader country process. This includes Parliament’s response to the APR Questionnaire during the Self-Assessment process, Parliament’s comment on the Draft Self-Assessment Report and Programme of Action submitted to Parliament by the Focal Point, Parliament’s Comment on the Issues Paper prepared by the APR Secretariat, Parliament’s comment on the Country Report prepared by the APR Team. ❑ Liaise with the Peer Review Governing Council and the Focal Point as required. ❑ Oversee, coordinate and provide direction to the work of the Joint Ad- hoc Committees. ❑ Present reports to Parliament. ❑ Submit Parliamentary reports to the Focal Point as necessary.
The Joint ad hoc Committees were established to inter alia: ❑ Identify key strategic issues for a Parliamentary response to the specific sections of the peer review questionnaire. ❑ Develop detailed work programmes including public participation activities. ❑ Draft a Parliamentary response under the thematic section of the peer review questionnaire for which the committee was established. ❑ Comment on the Draft Country Assessment Report and Draft Programme of Action. ❑ Comment on the Issues Paper developed by the APRM Secretariat. ❑ Submit reports to the Coordinating Committee.
6. Process & Progress
The Joint Coordinating Committee and the Joint ad hoc Committees have held regular meetings to discuss Parliament’s approach to the peer review questionnaire and to develop work programmes. The Joint Coordinating Committee will continue to meet weekly. The Joint ad hoc Committees will meet at least once or twice a week. Hearings and Committee meetings may be conducted away from the seat of Parliament. A draft Parliamentary Report is expected by mid-February 2006.
Parliament’s APRM process is supported by a comprehensive media and communications strategy. This includes print and electronic media incorporating community radio broadcasts in all official South African languages, radio and television talk shows and interviews and popular information materials.
The following progress is noted:
❑ The Joint ad hoc Committees are involved in independent research and networking activities and the collection of secondary data.
❑ The Joint ad hoc Committee on Socio-economic Development held public hearings from 7-9 November 2005. Other Joint ad hoc Committees plan to hold public hearings between November 2005 and January 2006.
❑ The Minister for Public Service and Administration made a statement in the National Assembly on 13 October 2005. This was followed by a debate in the National Assembly.
❑ The Presiding Officers addressed letters to the Speakers of Provincial legislatures informing them of the APRM process, Parliament’s role in South Africa’s self assessment and peer review and encouraging the support and participation of the provinces.
❑ The Presiding Officers addressed letters to the Speakers of 18 municipalities (two in each province) informing them of the APRM process including Parliament’s role in the process. Municipal Speakers were encouraged to identify suitable municipal structures to facilitate Parliament’s engagement with local communities on the issues to be reviewed.
❑ The Joint Coordinating Committee met with the Focal Point and the APRM Country Support Mission led by Professor A Adedeji at Parliament on 9 November 2005. The meeting exchanged views on the implementation of the APRM, particularly focusing on the approach that the South African parliament had adopted and the Parliamentary process envisaged. It was agreed that future coordination between the Parliamentary APRM structures and the National Peer Review Governing Council be encouraged to ensure exchange of perspectives and heightening a quality country process and outcomes.
7. Recommendations 1) To ensure the success of Parliament’s involvement in the peer review
process, members of the Joint Coordinating Committee and Joint ad hoc
Committees should, as far as possible, be temporarily relieved of
their other Parliamentary duties.
2) Chief Whips, leaders of political parties, Portfolio and Select Committee Chairpersons should, as far as possible, relieve members of the Joint Coordinating Committee and Joint ad hoc Committees from their political and other tasks in order for them to advance their APRM programmes as much as possible before the festive season.
Where necessary, the Joint Coordinating Committee and the Joint ad hoc Committee members should be allowed to attend relevant meetings during Parliamentary recess. Only such an approach will enable Parliament to fulfil the APRM mandate within the limited timeframe we have.
National Assembly
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Report of the Portfolio Committee on Labour on the Annual Reports and Financial Statements 2004/2005 of the Department of Labour and Entities, dated 15 November 2005:
The Portfolio Committee on Labour, having considered and examined the Annual Reports of the Department of Labour (DOL), the National Economic Development and Labour Council (NEDLAC), National Productivity Institute (NPI), Commission for Conciliation, Mediation & Arbitration (CCMA), Unemployment Insurance Fund (UIF), Compensation Fund, Umsobomvu Youth Fund, Health & Welfare Sector Education & Training Authority (SETA), Insurance SETA, Transport SETA, Secondary Agriculture SETA, Primary Agriculture SETA, Diplomacy, Intelligence, Defence and Trade SETA (DIDTETA), Bank SETA, Tourism & Hospitality SETA (THETA), Finance and Accounting Services SETA (FASSET), Wholesale & Retail (W&R) SETA, Energy SETA (ESETA), Construction SETA, Local Government & Water SETA (LG&W), Mining Qualifications Authority (MQA), Chemical Industries SETA (CHIETA), Media, Advertising, Publishing, Packaging SETA (MAPPP), Services SETA and Information Systems, Electronics and Telecommunications Technology SETA (ISETT), reports that it has concluded its deliberations thereon.
-
Report of the Portfolio Committee on Justice and Constitutional Development on the Provisional Suspension from Office of Mr I W O M Morake, a Magistrate at Lichtenburg Magistrate Court, dated 14 November 2005:
The Portfolio Committee for Justice and Constitutional Development, having considered the report on the provisional suspension from office of Magistrate Mr I W O M Morake, tabled by the Minister for Justice and Constitutional Development in terms of section 13 (3) (b) of the Magistrates Act, 1993 (Act 90 of 1993), reports as follows:
1. The Portfolio Committee noted from the report that the Minister provisionally suspended Mr Morake from office on 16 September 2005 in terms of the section 13 (3) (a) of the Magistrates Act, 1993. The report of the Minister which indicates reasons for the provisional suspension was tabled in Parliament on 16 September 2005, in compliance with section 13 (3) (b) of the Magistrates Act, 1993. 2. The Portfolio Committee invited Mr Morake on the 3 October 2005 to submit written representations to the Committee regarding the recommendation of the Magistrate Commission. The Committee received a response from Mr. Morake. In his presentation, Mr Morake denied the allegations and requested the committee hold in abeyance a decision to confirm or not to confirm his provisional suspension, pending the outcome of an application in terms of Section 174 of the Criminal Procedure Act, which was to be head on the 27 October 2005. 3. The Committee was informed that the Section 174 Application was unsuccessful. 4. The Portfolio Committee noted that Mr Morake is accused of stealing monies which were handed to him in his official capacity on two occasions at the office by members of the public. These monies were to be paid over to other members of the public during the period between 27 June 2003 and 1 July 2003 and again between 23 April 2004 and 14 March 2005. The amounts involved are R500.00 and R5 000.00. 5. In terms of section 13(4)(c) of Magistrates Act, 1993, Parliament must, as soon as reasonably possible pass a resolution as to whether or not the provisional suspension of the magistrate is confirmed. The Portfolio Committee considered the allegation to be of a serious nature as to make it inappropriate for Mr Morake to perform the functions while the inquiry referred to in section 13 (3) (e) of the Magistrates Act, 1993 is being held and therefore recommends that the National Assembly resolve to confirm the provisional suspension of Mr. Morake in terms of section 13 (3) (c) of the Magistrates Act, 1993. 6. The Committee further recommends that a progress report in respect of the inquiry of the Magistrates Commission be tabled in accordance with the provisions of section 13 (3) (f) of the Magistrates Act, 1993. Report to be considered. -
Report of the Portfolio Committee on Justice and Constitutional Development on the Provisional Suspension from Office of Mr K Suliman, an Additional Magistrate at Durban Magistrate Court, dated 14 November 2005:
The Portfolio Committee for Justice and Constitutional Development, having considered the report on the provisional suspension from office of Magistrate Mr K Suliman, tabled by the Minister for Justice and Constitutional Development in terms of section 13 (3) (b) of the Magistrates Act, 1993 (Act 90 of 1993), reports as follows:
-
The Portfolio Committee noted from the report that the Minister provisionally suspended Mr Suliman from office on 22 August 2005 in terms of the section 13 (3) (a) of the Magistrates Act, 1993. The report of the Minister which indicates reasons for the provisional suspension was tabled in Parliament on 23 August 2005, in compliance with section 13 (3) (b) of the Magistrates Act, 1993.
-
The Portfolio Committee invited Mr Suliman on the 29 August 2005 to submit written representations to the Committee regarding the recommendation of the Magistrate Commission. The Committee did not receive a response to the invitation.
- The Portfolio Committee noted that Mr Suliman is accused of indecent assault/crimen injuria in that he allegedly sexually assaulted his colleague, Ms N V Khumalo.
-
In terms of section 13(4)(c) of Magistrates Act, 1993, Parliament must, as soon as reasonably possible pass a resolution as to whether or not the provisional suspension of the magistrate is confirmed. The Portfolio Committee considered the allegation to be of a serious nature as to make it inappropriate for Mr Suliman to perform the functions while the inquiry referred to in section 13 (3) (e) of the Magistrates Act, 1993 is being held and therefore recommends that the National Assembly resolve to confirm the provisional suspension of Mr. Suliman in terms of section 13 (3) (c) of the Magistrates Act, 1993.
- The Committee further recommends that a progress report in respect of the inquiry of the Magistrates Commission be tabled in accordance with the provisions of section 13 (3) (f) of the Magistrates Act, 1993.
Report to be considered.
-
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The Portfolio Committeee on Environmental Affairs and Tourism on using 2004/05 Annual Reports of the Department of Environmental Affairs and Tourism and its Public Entities’ as Oversight Mechanism, dated 15 November 2005:
EXECUTIVE SUMMARY -
BACKGROUND
The constitution of South Africa (Act 108 0f 1996) recognises that Legislatures have important role to play in overseeing the performance of Departments and Public Entities. Section 65 of the Public Finance Management Act requires that Ministers table the annual reports for the Department and Public Entities for which they are responsible by 30 September each year.
On the 6th September 2005, the Department of Environmental Affairs and Tourism and its Statutory Bodies namely, South African National Biodiversity Institute, Greater St Lucia Wetlands Authority, South African National Parks, South African Tourism and South African Weather Services tabled their 2004/05 Annual Reports and Financial Statements to Parliament in terms of the of Sections 65(1)(a) of the Public Finance Management Act, 1999 (Act No 1 of 1999).
Upon the referral by the National Assembly on 30 September 2005, the Portfolio Committee on Environmental Affairs and Tourism scheduled extended briefing session on the 11th of October 2005 with the Department of Environmental Affairs and Tourism and its Public Entities to present their annual reports and Financial Statements including the Report of the Auditor- General on the Financial Statements for 2004-2005.
2.OVERVIEW OF THE PRESENTATION ON DEPARTMENTAL AND PUBLIC ENTITIES 2004/05 ANNUAL REPORTS
After welcoming and according a platform to officials from the Department and Public Entities to introduce themselves, the Chairperson, Mr Langa Zita, then indicated in his introduction that the main purpose of the meeting was to provide platform to the officials from the Department and Public Entities to brief members of the contents of 2004/05 annual reports submitted to Parliament in terms of Public Finance Management Act. The presentations generally focused on 2004/05 targets, achievements and, audited Financial Statements ending at 31 March 2005.
The first 2004/05 annual report presented was of Department of Environmental Affairs and Tourism. The Acting Director General, Ms J Yawitch presented the report The main focus of the presentation was on 2004/05 targets and achievements related to programmes such as Administration, Environmental Quality and Protection, Marine and Coastal Management, Tourism, Biodiversity and Conservation, Auxiliary and Associated Services, audit committee report, baseline over the MTEF period, budget allocation per programme and economic classification, actual expenditure in previous and current financial year, transfer payments and, HR matters.
The second 2004/05 annual report presented was of South African National Parks. The Chief Executive Officer, Dr David Mabunda presented the report. The presentation focused on vision and mission statements, business architecture, conservation, Tran frontier conservation, tourism business, people and conservation, operations and management, expanded public works programme, staff and employment equity statistics, black economic empowerment and financial report.
The third 2004/05 annual report presented was of the South African Weather Service. The Acting Chief Executive Officer, Mr JN Nphepya presented the report. The presentation focused on vision, mission, key focus areas, long term goals, implementation of recap plan, achievements in terms of services improvement, total staff complement, management and professional staff, commercial income and revenue highlights and, audit report comments.
The fourth 2004/05 report presented was of South African Tourism. The Chief Executive Officer, Mr Moeketsi Mosola presented the report. The presentation focused on 2004 overview, foreign tourists arrival in South Africa, growth of tourist arrival, arrival from Africa and Europe, global tourism growth, comparison between South Africa and Australia and, tourism sector GDP growth.
The fifth 2004/05 annual report presented was of South African National Biodiversity Institute. The presentation focused on vision and mission, 2004/05 key achievements, targets for 2005/06 and 07 and 2004/05 highlights related to education programme, learners visitor statistics, audit committee report and, income and expenditure
The final 2004/05 annual report presented was of the Greater St Lucia Wetland Park. The Chief Executive Officer, Mr Andrew Zaloumis presented the report. The presentation focused on vision and mission of the authority, strategy, and achievements related to socio economic environmental development, tourism development, park management and conservation, research, regulatory matters and audited financial statement
- COMMITTEE OBSEVATIONS AND IMPRESSIONS
Based on the presentation of 2004/05 annual reports and audited financial statements; the committee has generally observed that:
❑ The 2004/05 annual reports of the Department and Public Entities have
clearly provided information on service delivery and have reported the
financial statements, management and audit reports against the
performance targets and budgets as outlined in their strategic plans
and Estimate of National Expenditure
❑ In terms of the audit committee opinions, the financial statements
fairly present, in all material respects, the financial positions of
the Department and its Public Entities at 31 March 2005 and the result
of their operations and cash flows for the year then ended, in
accordance with prescribed accounting practice and in the manner
required by the Public Finance Management Act, 1999 (Act No.1 of
1999).
- CONCLUSIONS AND RECOMMENDATIONS
Having considered the 2004/05 Annual Reports and Financial Statements of the Department of Environmental Affairs and Tourism and its Public Entities, the Portfolio Committee recommends that; during the 2006 Parliamentary Committee period:
4.1.The Department of Environmental Affairs and Tourism should come and brief members on the findings of draft Asbestos study report and approved regulation by the cabinet, 2006/07 Strategic Plans and Budget Allocation, mechanisms to be put in place to ensure that BEE and, programs related to Genetically Modified Organism and Mari Culture
4.2. South African National Parks should come and brief members on elephant management strategy; implementation of transfrontier conservation programme and, mechanisms put in place to ensure the management of the park in accordance with the Protected Areas Act (57 of 2003)
4.3. South African Weather Service should come and brief members of its re- capitalisation plan, strategies to reduce the impact of adverse weather conditions on vulnerable communities and,
4.4. South African Tourism should come and brief members on Evaluation Report on Short Left Campaign, Eco Tourism, Action Plans and preparations for 2010, Strategic Plans and 2006/07 Budget Allocation
4.5. South African National Biodiversity Institute should come and brief members on 2006/07 Business Case, Strategic Plans and Budget Allocation, progress made in respect of the Greening of the Nation Project, Succulent Karoo Ecosystem Program and its success in meeting the socio -economic goals of the country
4.6. Greater St Lucia Wetland Park should come and brief members on action to be taken ensure the promotion of broad –based black economic empowerment in new tourism industry in the park, status of all the existing poverty alleviation projects and their impact on poverty alleviation and sustainable job creation.
- REPORTING
The Portfolio Committee on Environmental Affairs and Tourism having used 2004/05 Annual Reports of the Department of Environmental Affairs and Tourism and its Public Entities as Oversight Mechanism during the Extended Briefing Session, dated 11 October 2005, Reports to Parliament as Follows:
- PRESENTATION ON 2004/05 ANNUAL REPORTS AND FINACIAL STATEMENTS OF THE DEPARTMENT AND ITS PUBLIC ENTITIES
On the 11 October 2005 the Department of Environmental Affairs and Tourism and its Public Entities namely, South African National Parks, South African Weather Service, South African Tourism, South African National Biodiversity Institute and, Greater St Lucia Wetland Park presented their 2004/05 annual reports and financial statements to the Portfolio Committee as tabled to Parliament in terms of Sections 65(1)(a) of the Public Finance Management Act, 1999 (Act No 1 of 1999), as amended (PFMA)
- DEPARTMENT OF ENVIRONMENTAL AFFAIRS AND TOURISM
The Deputy Director General, Ms J Yawitch presented the 2004/05 annual report and audited financial statement of the department. The main focus of the presentation was on 2004/05 targets and achievements related to programmes such as Administration, Environmental Quality and Protection, Marine and Coastal Management, Tourism, Biodiversity and Conservation, Auxiliary and Associated Services, audit committee report, baseline over the MTEF period, budget allocation per programme and economic classification, actual expenditure in previous and current financial year, transfer payments and, HR matters. Some of the major departmental achievements reported during the period under review included:
❑ Drafting of Uniform National and Provincial Budget Structure
❑ Establishment of National Environmental Advisory Forum,
❑ Finalisation of Environmental Management Cooperation Agreement
Guidelines and Environmental Impact Assessment Register and Database
❑ Completion of Thor Chemical Environmental Impact Assessment and
coasting
❑ Finalization of Climate Change Response Strategy and development of
draft asbestos regulations
❑ Completion of draft report on proposal for rehabilitation of fishing
harbours
❑ Drafting of new policy framework for the white shark cage diving and
boat based whale watching industry
❑ Revision and amendment of the 4x4 regulations and promulgation of 2
new Marine Protected Areas.[3]
3.SOUTH AFRICAN NATIONAL PARKS
The Chief Executive Officer, Dr David Mabunda presented the report. The presentation focused on vision and mission statements, business architecture, conservation, Tran frontier conservation, tourism business, people and conservation, operations and management, expanded public works programme, staff and employment equity statistics, black economic empowerment and financial report. The main 2004/05 achievements reported by the Chief executive officer relate to progress made in respect of:
❑ Completion of Giriyondo border post
❑ Opening of 28 bed rest camp in March 2005 at Sendilingsdrif
❑ Completion of planned tourism infrastructure in Mapungubwe
❑ Pre-grading of all Kruger accommodations and camps sites in Addo and
Storms River Mouth
❑ Launching of public-private partnership between South African
national parks, the department of environmental affairs and tourism,
the Department of Education and Pick ‘n Pay for the implementation of
kids in the parks programme
- SOUTH AFRICAN WEATHER SERVICE
The Acting Chief Executive Officer, Mr JN Nphepya presented the report. The presentation focused on vision, mission, key focus areas, long term goals, implementation of recap plan, achievements in terms of services improvement, total staff complement, management and professional staff, commercial income and revenue highlights and, audit report comments. In the opinion of the Acting Chief Executive Officer, the main achievement of the South African Weather Services during the 2004/05 financial periods included:
❑ Deployment of the Umtata Weather Radar
❑ Establishment of 5 automatic Weather Stations in the Eastern Cape
❑ Implementation of Weather Data Capturing Programme
❑ Improvement of longer term forecasting ability
❑ Completed the air borne monitoring campaign
❑ Received an international award for rainfall enhancement
❑ Filled all time scales with new forecasting suite of products –
addressing all timescales
❑ Reduced the impact of adverse weather conditions on vulnerable
communities
❑ Used new high resolution weather satellite
❑ Introduction of an aviation display system[4]
- SOUTH AFRICAN TOURISM
The Chief Executive Officer, Mr Moeketsi Mosola presented the 2004/05 annual report of the South African Tourism. The presentation focused on 2004 overview, foreign tourists arrival in South Africa, growth of tourist arrival, arrival from Africa and Europe, global tourism growth, comparison between South Africa and Australia and, tourism sector GDP growth. Some of the major achievement of the South African Tourism reported during the 2004/05 financial period included:
❑ Recording of highest number of foreign tourism arrivals
❑ Growth of foreign tourism arrival across all the regional portfolio
except Europe
❑ Growth of South African Tourism as compared to Australia
❑ Successful roll out of short left campaign with the aim of persuading
more South African to travel within their own country
❑ Development of a comprehensive guide to graded products as well as
aggressive business tourism strategy and action plan
❑ Negotiated a three-year sponsorship contract for the emerging tourism
entrepreneur of the year award with ABSA.
❑ Successfully gained market share in France while lost significantly
in Netherlands and Germany
❑ The tourism GDP figures have been modelled using WTO figures and
foreign direct spend in South Africa[5]
- SOUTH AFRICAN NATIONAL BIODIVERSITY INSTITUTE
The Director of Biodiversity Policy and Program, Ms Kristal Maze presented the 2004/05 annual report of the Institute. The presentation focused on vision and mission, 2004/05 key achievements, targets for 2005- 07 and 2004/05 highlights related to education programme, learners visitor statistics, audit committee report and, income and expenditure The key achievements and programme highlights presented to the committee included:
❑ Transfer of key management posts to Pretoria
❑ Opening of a new biodiversity centre in Pretoria
❑ Opening of visitor facilities in lowveld, Walter sisulu and Pretoria
national botanical garden
❑ Initiation of greening of the nation project
❑ Initiation of municipal capacity program in eastern cape
❑ Establishment of succulent karoo ecosystem programme coordination
unit
❑ Initiation of one-stop biodiversity information system
❑ Launching of grasslands bioregional programme.
❑ Rehabilitated 65 wetlands and created 1749 jobs
❑ Managed the working for programme on behalf of Department of
Environmental Affairs and Tourism[6]
❑ Facilitated garden based environmental education programme.[7]
- GREATER ST LUCIA WETLAND PARK
The final 2004/05 annual report presented was of the Greater St Lucia Wetland Park. The Chief Executive Officer, Mr Andrew Zaloumis presented the report. The presentation focused on vision and mission of the authority, strategy, and achievements related to socio economic environmental development, tourism development, park management and conservation, research, regulatory matters, audit committee report and summary of financial performance, income statement and employment equity. According to the Chief Executive Officer, the main achievements of the park during the period under review included:
❑ Spending of R17. 9 M on Park Development and Implementation of Alien
Clearing Plan
❑ Creation of 330 jobs in tourism and related industries and
Establishment of 7 Agricultural Gardens
❑ Implementation of Communication strategy
❑ Appointment of branding team and completion of brand architecture
❑ Translocation of 700 units of warthog, oribi, giraffe, white and
black rhino, buffalo and wild dog
❑ Initiated Lubombo tourism and reached agreement on location and
process for the development of Bhangazi heritage site
❑ Development of drama into a training tool for broader community and
park employees. [8]
- COMMITTEE OBSERVATIONS
Based on 2004/05 annual reports and audited financial statements presented; the committee has generally observed that:
❑ The 2004/05 annual reports of the Department and Public Entities have
clearly provided information on service delivery and have reported the
financial statements, management and audit reports against the
performance targets and budgets as outlined in their strategic plans
and Estimate of National Expenditure
❑ In terms of the audit committee opinions, the financial statements
fairly present, in all material respects, the financial positions of
the Department and its Public Entities at 31 March 2005 and the result
of their operations and cash flows for the year then ended, in
accordance with prescribed accounting practice and in the manner
required by the Public Finance Management Act, 1999 (Act No.1 of
1999).
❑ The tabling of 2004/05 annual reports and financial statements of the
Department and Public Entities to Parliament on the 6 September 2005
by Minister of Environmental Affairs and Tourism has complied with the
requirements of Public Finance Management Act.[9]
- CONCLUSION AND RECOMMENDATIONS
Having considered the 2004/05 Annual Reports and Financial Statements of the Department of Environmental Affairs and Tourism and its Public Entities, the Portfolio Committee recommends that; during the 2006 Parliamentary Committee period:
9.1.The Department of Environmental Affairs and Tourism should come and brief members on the findings of draft Asbestos study report and approved regulation by the cabinet, 2006/07 Strategic Plans and Budget Allocation, mechanisms to be put in place to ensure that BEE and, programs related to Genetically Modified Organism and Mari Culture.
9.2. South African National Parks should come and brief members on elephant management strategy; implementation of trans-frontier conservation programme and, mechanisms put in place to ensure the management of the park in accordance with the Protected Areas Act (57 of 2003)
9.3. South African Weather Service should come and brief members of its re- capitalisation plan, strategies to reduce the impact of adverse weather conditions on vulnerable communities and,
9.4. South African Tourism should come and brief members on Evaluation Report on Short Left Campaign, Eco Tourism, Action Plans and preparations for 2010, Strategic Plans and 2006/07 Budget Allocation
9.5. South African National Biodiversity Institute should come and brief members on 2006/07 Business Case, Strategic Plans and Budget Allocation, progress made in respect of the Greening of the Nation Project, Succulent Karoo Ecosystem Program and its success in meeting the socio -economic goals of the country
9.6.Greater St Lucia Wetland Park should come and brief members on action to be taken ensure the promotion of broad –based black economic empowerment in new tourism industry in the park, status of all the existing poverty alleviation projects and their impact on poverty alleviation and sustainable job creation.
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Report of the Portfolio Committee on Environmental Affairs and Tourism on the Proposed Exclusion of Portion 89 (a portion of portion 63 of the farm Groenkloof 358 J.R, in extent 4484m2 from the Groenkloof National Parks situated in the Administrative District of Pretoria, Gauteng Province, dated 11 November 2005:
The Portfolio Committee on Environmental Affairs and Tourism, having considered request for approval by Parliament of the Proposed Exclusion of Portion 89 (a portion of portion 63 of the farm Groenkloof 358 J.R, in extent 4484m2 from the Groenkloof National Parks situated in the Administrative District of Pretoria, Gauteng Province, tabled in terms of section 2(3) of the National Parks Act,
- (Act No 57 1976), referred to it, recommends that the house, in terms of section 2(3) of the National Parks Act, 1976, approves the said request.
Request to be considered.
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Report of the Portfolio Committee on Environmental Affairs and Tourism on Oversight Visits conducted in KwaZulu-Natal, Pondoland and Coega Development Corporation, dated 8 November 2005:
EXECUTIVE SUMMARY -
BACKGROUND
As part of conducting its oversight functions, a multiparty delegation of the Portfolio Committee on Environmental Affairs and Tourism conducted oversight visits to Kwa-Zulu Natal, Pondolond and, Coega Development Corporation from the 30TH of January to the 3rd of February 2005. The overall objectives of the oversight visits were to: assess the economic impact in Kwazulu-Natal of the banning of 4x4 vehicles on the beaches; monitor the implementation in Pondoland of Eco-tourism strategies, nature conservation, job creation and, assess the long-term impact of the Coega development projects on the environment, industrial development, rail-road, shipping transport and poverty alleviation. A multiparty delegation of the Committee under the leadership of an Acting-Chairperson Mr. M I Moss (ANC), included; Ms MM Ntuli (ANC), Ms R Ndzanga (ANC), Ms J Chalmers (ANC) Mr. A Mokoena (ANC), Mr. J Combrink (ANC), Ms. J Semple (DA) Ms C Johnson (NNP) Ms C Zikalala (IFP), Mr. LW Greylling (ID), and committee secretary, Mr. TM Manele.
- FINDINGS
During the visit the delegation of the committee received briefing sessions from the KZN MEC of Arts, Culture and Tourism, the Chief Executive Officer of the South African Association for Marine and Biological Research, the Chief Executive Officer of Ezemvelo KZN Wildlife, the Pondoland Chief Director and Acting Head of the Department of Economic Affairs and Tourism, the Executive Mayor of OR Tambo District Municipality, the Manager of the Coega Development Corporation, and the Traditional Leaders and Eco-Tourism Operators.
During the meeting the KZN MEC of Arts, Culture and Tourism, the Chief Executive Officer of the South African Association for Marine and Biological Research, and the Chief Executive Office of Ezemvelo KZN Wildlife the delegation was briefed on the progress made in respect of the banning of 4x4 vehicles on the Durban beaches.
The achievements reported included promulgation of new regulations controlling and prohibiting recreational use of off–road vehicles in the coastal zone under specific circumstances, permission of recreational use of off-road vehicles in designated recreational use areas and the commissioning of a scientific study to consider management implications for successful implementation of a provincial strategy for recreational use –areas in the coastal zone of Kwazulu Natal.
Some of the beach access and management considerations recommended in the study included: consideration for vehicular traffic of existing and appropriate beach access ramps; the availability of safe vehicle parking, along with associated pedestrian access and facilities to be taken into account when determining the need for ORV parking and recreational travel on the beach; provision of adequate vehicular access for shore patrols; law enforcement; search and rescue issues; property protection, and control of litter and sanitation.
During the meeting with the Chief Director and the Head of the Department of Economic Affairs and Tourism in Pondoland, the delegation was briefed on the challenges and barriers impacting on eco-tourism development. The barriers mentioned include lack of institutional capacity and budget to deal with lands claims, the need to educate local communities on government legislation, the need to incorporate local knowledge, skills transfer in developing poverty alleviation projects, streamlining legislation in terms of the Wild Coast, and the developing risk management strategies and coordination of Wild Cost. Besides challenges reported, the delegation of the committee was also briefed about the status of European Union poverty alleviation projects such as community owned and operated tour operations, and the development of tourism accommodation facilities.
Some of the opportunities reported included community consultation, workshops and support on the construction of the proposed N2 Toll road. The eco-tourism challenges mentioned related to the need to link poverty alleviation projects with intergraded development planning and ensuring that local knowledge and skills transfer are facilitated in the development of community based poverty alleviation projects, a review of the status of land demarcation and the role of land claims commission. There is a need to ensure that consultants who are contracted to develop poverty alleviation projects facilitate knowledge transfer and training for the communities whose projects are intended to benefit. During the meeting with officials of the Coega Development Corporation, the delegation of the committee was briefed on business activities of the corporation, including the industrial development zone, investment incentives, and skills development, have contributed to job creation and the alleviation of poverty,
- CONCLUSIONS AND RECOMMENDATIONS ❑ The Department of Environmental Affairs and Tourism must brief the committee on the mechanisms that will be used to ensure compliance on the banning of 4x4 vehicles on the KZN beaches. ❑ The OR Tambo District Municipality must ensure that all poverty alleviation projects funded by the European Union and Department of Environmental Affairs and Tourism are linked with the Integrated Development Planning (IDP).
- REPORTING
As part of conducting its oversight functions, A multi party delegation of the Portfolio Committee on Environmental Affairs and Tourism conducted an oversight visit from 30th January to 3rd February 2005 to Kwa-Zulu Natal, Pondolond, and the Coega Development Corporation.
- OBJECTIVES
The overall objectives of the oversight visits were to: assess the economic impact in Kwazulu-Natal of the banning of 4x4 vehicles on the beaches; monitor the implementation in Pondoland of the eco-tourism strategy, nature conservation, job creation, and assess the long-term impact of the Coega development projects on the environment, industrial development, rail-road, shipping transport and poverty alleviation
- DELEGATION
A Multiparty delegation of the Committee under the leadership of an Acting- Chairperson Mr. M I Moss (ANC), included; Ms MM Ntuli (ANC), Ms R Ndzanga (ANC), Ms J Chalmers (ANC) Mr. A Mokoena (ANC), Mr. J Combrinck (ANC), Ms. J Semple (DA) Ms C Johnson (NNP) Ms C Zikalala (IFP), Mr. LW Greylling (ID), Mr. J Durand, Parliamentary Liaison Officer, Department of Environmental Affairs and Tourism and, Committee Secretary, Mr. TM Manele.
- REPORTING
Having conducted an oversight visits in Kwa-Zulu Natal, Pondolond and, Coega development corporation, from the 30TH of January to the 3rd of February 2005, the Portfolio Committee on Environmental Affairs and Tourism, reports to Parliament as follows:
- OVERSIGHT VISIT IN KZN
On the 30th of January 2005, the delegation of the committee had briefing sessions with the KZN MEC of Arts, Culture and Tourism, the Chief Executive Officer of the South African Association for Marine and Biological Research and, the Chief Executive Office of Ezenvelo KZN Wildlife. The delegation of the committee was briefed on the progress made in respect of banning of 4x4 vehicles on the Durban beaches. The achievements reported included promulgation of new regulations controlling and prohibiting recreational use of off –road vehicles in the coastal zone under specific circumstances, permission of recreational use of off-road vehicles in designated recreational use areas and the commissioning of scientific study to consider management implications for successful implementation of a provincial strategy for recreational use –areas in the coastal zone of Kwazulu Natal.
The MEC of the Department of Arts, Culture and Tourism, the Hon. Narend Singh, welcomed the delegation. In his opening statement, the MEC indicated that in January 2002, the Minister of Environmental Affairs and Tourism promulgated new regulations controlling the use of off-road vehicles in the coastal zone of South Africa. The new regulations according to the MEC provided for a general prohibition on the recreational use of off-road vehicles (ORV) in the coastal zone under specific circumstances. The regulations specify that recreational use of ORVs can only take place in designated recreational use areas (RUA)
The MEC further emphasized that the legislation pertaining to the restriction on the use of recreational vehicles on South African beaches was published in December 2001 and subsequent amendments were promulgated to the extent that no vehicles at all were allowed in South Africa’s coastal zone. Possibilities existed, however, for the granting of licenses in certain instances. Amendments to the legislation were proposed and circulated for comment in 2004. Most notable in these amendments were the proposed removal of the sections that allow for the designation by the Director General of recreational use areas, which in Kwazulu Natal had largely been identified.
Initially legislation had allowed for the recognition and designation of certain areas of the coastal zone for recreational use including the use of vehicles, provided that it would not result in significant harm to the environment and would not seriously affect the rights of the general public to enjoy the coastal zone. The original act made provision for the identification of recreational use areas and KZN has gone a long way to providing a methodology. This methodology has the support of the scientific community and was, in fact, developed by members of the community deeply involved in coastal and marine research. The delegation of the committee was then briefed on the strategic assessment of recreational use areas for off-road vehicles in the coastal zone of KZN and the position of Ezemvelo KZN Wildlife.
- STRATEGIC ASSESSMENT STUDY
The Chief Executive Officer of the South African Association for Marine and Biological Research, Dr Mark Penning, briefed the delegation on a strategic assessment of recreation use areas for off-road vehicles in the coastal zone of Kwazulu Natal. According to the Chief Executive Officer, the main objectives of the study were to collate and map information relevant to the designation of ORV recreational use areas in the coastal zone of the KZN as specified by the new regulation, and to justify, both scientifically and socially, the sitting of ORV recreational use areas to be defined in terms of size, locations and usage and formed part of a provincial strategy for the management of ORV in the coastal zone of KZN.
The study identified seven coastal attributes or characteristics with spatial dimensions that immediately disqualified an area from being considered for a RUA. The seven attributes identified include any area outside the hard sand of the intertidal zone; fragile, rare, relic vanishing vegetation; wildlife sanctuaries and reserves; unsuitable physical attributes of beaches or natural barriers; areas of fragile natural features or scientific interest; areas of potential beach user conflict, and unidentified or unexplored key ecological processes.
The study made recommendations on scientific, access and management considerations on effective implementation of provincial strategy on the management of ORV in the coastal zone of KZN. Some of the scientific considerations proposed included; no new ORV access points to the beach should be considered; areas where erosion or other soil or resource damage will occur as a result of ORV accessing the beach should not be considered for RUA; the availability convenience, conservation logic and safety of existing vehicle parking and pedestrian access and facilities must be taken into consideration when determining the need for ORV parking and recreational travel on the beach itself only existing, appropriate beach access ramps should be considered for vehicular traffic.
The beach access consideration proposed; RUA should not be established where enforcement and monitoring of ORV use on the beaches are inadequate; the public services involved in the management of beaches must be considered but service access onto the beach should not necessarily be opened for public vehicle access; adequate vehicular access for shore patrols, law enforcement, search and rescue, property protection and control of litter and sanitation will be required at beaches; equitable access to all user groups must be considered when proposing a RUA and its management
The management consideration proposed included; Only areas that were subjected to significant historical ORV usage at the time of the implementation of 2002 regulation should be considered for RUA; Where sensitive areas or sites exist within a designated RUA, a buffer protection zone should be declared. This buffer zone must be between the normal high water mark and the edge of the sea or 20 m from the nearest dune vegetation, and 100m from the nearest bank of an estuary; Beach areas with hazardous conditions for ORV use should not be considered for RUA. Environmental impact assessments should comment on beach slope, grain size beach width and length, and beach access point.
- POSITION OF BEACH DIVERS
The Chief Executive Office of Ezemvelo KZN Wildlife, Mr. Cedric Coetzee, briefed the delegation on the position of beach driving. The presentation focused on the recognition of the value of beaches in providing ecosystem services that are unique and diversified, biological filters and nutrient recycling. According to beach drivers the principles of disallowing the driving on the Durban beaches should include areas where driving is necessary outside of the vanishing vegetation, wildlife sanctuaries, unsuitable physical attributes, areas of scientific interest and key ecological processes. The management consideration proposed in the scientific beach assessment study should include case-by- case evaluation, effective enforcement and compliance, regular environmental monitoring and provision of adequate resources.
- OVERSIGHT VISIT IN PONDOLAND
During the meeting with the Chief Director and Head of the Department of Economic Affairs and Tourism in Pondoland, the delegation was briefed on the challenges and barriers impacting on eco-tourism development. The barriers mentioned include lack of institutional capacity and budget to deal with lands claims, the need to educate local communities on government legislation, the need to incorporate local knowledge, skills transfer in developing poverty alleviation projects, streamlining legislation in terms of the Wild Coast and developing risk management strategies and coordination of Wild Coast. Besides challenges reported, the delegation of the committee was also briefed about the status of European Union poverty alleviation projects such as community owned and operated tour businesses, and the development of tourism accommodation facilities.
3.1. POVERTY ALLEVIATION AND CAPACITY BUILDING PROJECTS
The Acting Head of the Department of Economic Affairs, Environment and Tourism, Prof Jeff Peires, briefed the delegation of the committee on a joint European Union and Department of Environmental Affairs and Tourism programme to support to the Wild Coast. The briefing focused on development planning, project development and investor mobilization, transaction advisors, operational support to programme tourism assets, and training.
3.1.1 INTERGRATED CONSERVATION AND DEVELOPMENT PLANNING
This programme is supporting two local municipal coastal planning exercises in the Mbizana and Quakeni local municipalities. These pilot initiatives combine EIA’s tourism plans land-use plans and tourism project identification. These products are being successfully integrated into the IDP’s and SDF of these local municipalities. These initiatives are also being carefully coordinated with the broader wild coast and supported by ABSA and government. It is intended that this level of planning will be extended to the Port ST Johns area in the remaining period of implementation. The integrated conservation and development planning is also supporting two local planning initiatives at Msikaba and Mbotyi, designed to demonstrate more detail land use planning in coastal Nodes.
3.1.2. PROJECT DEVELOPMENT AND INVESTOR MOBILIZATION
The core business of this programme is tourism enterprise development and the facilitation of communities into the tourism sector. The programme is supporting the development of community owned tourism enterprise with a high level of private sector participation.
3.1.3. TRANSACTION ADVISORS
The core objective of this programme is to assist in the implementation of project development, investor mobilization, integrated conservation and development planning, and support of communities entering into joint ventures with the private sector. The programme is busy with the appointment of transaction advisors who will support communities’ financial, tourism business and legal requirements.
3.1.4. OPERATIONAL SUPPORT TO PROGRAMME TOURISM ASSET
This programme is directly supporting the development of 10 coastal lodges and a number of village-based tourism facilities. The programme has a specific support activity tom the enterprise which includes supporting some of the direct coasts associated with insurances, public liability and security and working with community trusts and tourism businesses to set up the management systems and to build the skills necessary for the community’s participation in sustainable tourism enterprise.
3.1.5. SKILLS DEVELOPMENT AND TRAINING
This programme has trained 21 700 youth in various life skills, 2 646 adults in hard skills relating to tourism enterprise, 328 adults in natural resource management, and 3 364 adults in environmental and tourism awareness. In addition, 150 learners have successfully graduated from two hospitality and conservation learnerships.
3.1.6. TRAINING AND STRATEGIC CONSIDERATION
In support of all the stated programmes, a work-based training programme has been developed to provide building skills to the community owned tourism enterprise, camp managers, front office staff, catering staff housekeepers and security. In his concluding remarks, the acting head indicated there have a considerable number of planning and development initiatives in the wild coast area over the past 20 years, largely ad hoc in nature. These have happened against a background of absence of an integrated conservation and tourism, a weak legislative base, a lack of coordination between departments of government and across levels of government, the relatively high risk profile of the Wild Coast for private sector investment, and a shortage of hard skills in various areas of governance.
7. EU WILD COAST TOURISM PROJECT
Some of the poverty alleviation projects presented to the delegation of the committee include: ➢ Mzamba Tours – an existing community owned and operated tour business in Mzamba. This programme is currently providing mentorship support to the business and facilitating linkages of the business to other similar private sector enterprise in the KZN South coast area. ➢ Mzamba Trust – this programme is providing legal and developmental technical assistance to the trust in their deliberations with sun international on the land claim over the wild coast casino development area. ➢ Mzamba Craft Center- This project works closely with OR Tambo District Municipality and local municipalities in planning and unfolding gateway development, including review of the current booking office and facility for the horse and hiking trail and the possible development of tourism accommodation facilities. ➢ Amadiba Adventures- This project involves a decision taken by ACCODA trust to continue with AA as a community owned and operated tourism venture. A private sector mentorship support to AA is being negotiated as part of the Mtentu concession process. The programme will now be investigating, facilitating and supporting implementation of a new campsite up the Mtentu gorge to add to the current facilities at Kwanyana for the trail operation. ➢ Mzamba to Mkambti – through this project, an integrated conservation and development planning has been done together with Mbizana local municipality the Provincial Department of Economic Affairs, Environment and Tourism. The planning and project identification processes are currently being incorporated into the Integrated Development Planning and Skills Development Forum.
According to the Acting Head of the Department of Economic Affairs and Tourism, some of the problems affecting the successful implementation of the above-mentioned poverty alleviation projects is the under-development of economic activity in an area of extreme poverty, difficulty in securing optimal development in the right places, significantly high levels of unauthorized/ illegal development, high level of degradation of the critical natural resource base, and difficulty in implementing strategic national government policy in areas such as environmental management and economic empowerment. The delegation of the committee was then informed that the European Union programme is currently developing clarity in the areas of land rights, land use rights, project development, local municipal planning, development responsibility and the participation of empowered communities in tourism enterprise.
- MEETING WITH EXECUTIVE MAYOR OF OR TAMBO MUNICIPALITY
On the 2nd of February 2005, the delegation of the committee met the Executive Mayor of OR Tambo Municipality, Ms Zoleka Capa. In her interaction with the delegation of the committee, the Executive Major indicated that local municipalities are often left behind with regard to policy implementation such as the proposed N2 toll road, the proposed Xolobeni mining and nature conservation. She further emphasized a need for national government to consult district municipalities when visiting local communities. She further dispelled the complaints that the community of Pondoland was not consulted about the proposed construction of N2 toll road.
The delegation of the committee was informed by the Executive Mayor that in order to ensure sufficient public consultationm the Department of Environmental Affairs and Tourism conducted workshops among the members of the community and that during these workshops no member from the communities was against the construction of the N2 toll road. While acknowledging the socio-economic benefits of the construction of N2 Toll road, the Executive Mayor stated that the challenge facing eco-tourism in Pondoland related to the need to use local knowledge of the people in the community projects, the need to design and implement poverty alleviation projects such as crafting project for women, linking community development projects with integrated development planning (IDP) at local government level, reviewing the status of land demarcation and the role of land claims commission. The other challenge the Executive Mayor mentioned related to the use of consultants in developing community related poverty alleviation projects and the lack of knowledge transfer and training for the communities which the projects are intended to benefit.
- COEGA DEVELOPMENT CORPORATION
On the 3 February 2005, the delegation of the committee visited the Coega Development Corporation. The Acting Manager, Mr. M Mopoma, briefed the delegation of the Committee on the Coega development projects. The main focus of the presentation was on services related to the industrial development zone, investment incentives, people and skills development, metals and metallurgical issues, automotive issues, textile issues, and information technology and logistics.
5.1. BRIEFING ON CORPORATION BUSINESS SERVICES
The Coega Development Corporation offers services to the community. The services offered provide assistance on one stop service to investors, environmental impact assessments, drawing up business plans, obtaining finance, fast-tracking of applications through the administrative process, technical support for construction, recruitment and training of construction team and workers for factory, and support for the relocation of key personnel, including work permits, finding accommodation and settling in.
5.2. INDUSTRIAL DEVELOPMENT ZONE SKILLS DEVELOPMENT
The Coega Development Corporation’s Industrial Development Zone offers services such as integrated deep- water harbour with container and bulk terminals, high- tech communication infrastructure, customised employee- training program, low electricity costs. During the period under review, it was reported that the Coega Development Corporation has developed a comprehensive skills database for the Nelson Mandela Metro, which provides Labour for the Coega Industrial Development Zone.
The investors coming into the zone draw labour from a screened pool of people, which reduces the amount of time and resources spent on recruitment. Using this database, the Coega Development Corporation can identify any skills gap well ahead of construction or of a new factory coming on line. The skills gaps identified are then filled through comprehensive training programmes which are funded through the Department of Labour.
3. SPECIALIZED TRANNING There are number of training institutions, including the University in the Nelson Mandela Metro, that provide education and training for investors in the Coega Industrial Development Zone. There is also specialized training for the Automotive Industry being managed by the Eastern Cape Automotive Industry Development Council. It has established agreements with several tertiary-educational institutions in the Eastern Cape to run approved courses and learnerships to develop skills required by the automotive industry.
5.4. METAL AND METALURGICAL CLUSTER
The metal and metallurgical cluster provides direct rail links to South Africa’s mineral wealth, deep water harbours, road transport to container terminals for export, low energy costs, competitive land prices and access to south Africa’s metallurgical processing skills related to manganese, chromium, platinum, gold, vanadium, aluminosilicates and vermiculite.
5.5. AUTOMOTIVE CLUSTER
The automotive cluster provides best cost solution for component manufacturers, assemblers, original equipment suppliers and auto logistics specialists wanting to invest in the southern Hemisphere. The cluster also provides project benefits such as a skilled and highly productive workforce, logistic infrastructure, customized employee training programmes and support systems including a training college, service providers, machine shops, electronics and robotics specialists 5.6 INFORMATION TECHNOLOGY
In order to meet the challenges of information technology, the Coega Development Corporation has installed an Information Communication Technology System that integrates all processes and activities within the Coega Industrial Development Zone. A customer management solution has been improved through the creation of a contact center.
- MEETING WITH TRADITIONAL LEADERS AND ECOTOURISM OPERATORS
The operators raised concerns over the funding from the European Union, which was meant to assist in the development of eco-tourism operators and tourism in general in the area. It is alleged that consultants spent all these funds. . Added to that was also the situation of no protocol being followed in dealing with community activities in the areas, a situation that resulted in no consultation at all with the communities affected in those areas.
- CONCLUSION AND RECOMMENDATIONS
Having conducted on oversight visit to Kwa-Zulu Natal, Pondolond, and the Coega Development Corporation from the 30TH of January to the 3rd of February 2005, the Portfolio Committee on Environmental Affairs and Tourism concludes and recommends as follows:
• That the Portfolio Committee must call the Department of
Environmental Affairs before it to provide a briefing on the
latest eco-tourism and conservation plans for the Wild Coast;
Report to be considered.
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Report of the Portfolio Committee on Finance on the Medium Term Budget Policy StatementAppr 2005, dated 15 November 2005:
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INTRODUCTION The Minister of Finance tabled the Medium Budget Policy Statement 2005 (MTBPS 2005) on 25 October 2005 before Parliament.
On 26 October, the Committee in a joint sitting with the Select Committee of Finance was briefed on the MTBPS 2005 and the MTEF forecasts by the Minister of Finance, the Deputy Minister of Finance and the Director General of the National Treasury. On 28 October, the Committee received further submissions from invited economists, as well as organized labour. These submissions dealt with a range of issues raised in the MTBPS 2005, as well as certain other related issues.
The Portfolio Committee on Finance considered and deliberated on the Medium Term Budget Policy Statements 2005, during several meetings. The Committee also used the opportunity to review the specific recommendations it made in relation to Budget 2005/06, on the extent to which Government and specifically the National Treasury has addressed the issues.
- Thrust of Medium Term Budget Policy Statement
Infrastructural development is the major instrument, which will be used to grow the economy, which National Treasury seeks to shift to a steeper trajectory. The MTBPS also reflects the continued commitment of government to the development of a more robust industrial strategy and a fresh focus on redistribution. However capacity constraints continue to impact on expenditure. The shifting emphasis in this three-year policy statement prepares the way for government’s “shared growth initiative, under the leadership of the Deputy President Phumzile Mlambo-Ngcuka.
The reduction in the deficit enables much more creative policy and outlook to be adopted while the tax to the Gross Domestic Profit ratio reflects continued awareness of the delicate balance between economic growth and tax range. The commitment to social security expenditure is underpinned by the proposed allocation of nearly 20 percent of the total expenditure excluding debt service costs. Capital expenditure is set to increase from R18, 9- billion to R39, 5-billion over the next three years. The critical role- played by provincial and local governments in service delivery are also addressed with continued emphasis on education, health and social development.
- ACCELERATED AND SHARED GROWTH
The Committee supports the Government’s continued focus on the objectives it set out in its medium term strategic framework. In particular it commends the Government for the progress it has made over the last year in realizing these objectives. The Committee looks forward to engaging with the outputs of the Deputy President’s accelerated and shared growth initiative.
In this regard, the Committee explored the issues constraining economic growth in South Africa, which it had also pursued during its hearings on Budget 2005/06. The Committee notes that in the current hearings, the shortage of appropriate skills again emerged as the key constraint to raising the rate of economic growth.
The continued emphasis on education as one of the critical instruments to address skills shortages, poverty and unemployment is reflected in the increased allocations to improve resources for schools and support education reforms generally. The importance of raising the number of learners achieving higher-grade mathematics significantly above 5 percent was underpinned by the Minister of Finance. The Committee agrees that this would impact positively on increasing many of the technical skills such as engineering, which are key to South Africa’s growing economy.
The Committee appreciates that a range of short, medium and long-term strategies are required to address the issue of skills, and therefore urges Government to pursue the priority of strengthening and improving the quality and allocative efficiency of education spending.
- ECONOMIC POLICY AND OUTLOOK
There was general agreement with the National Treasury’s economic outlook for the MTEF period. Over this medium term it is expected that improved service delivery and major public sector investments will be supported by further policy adjustments informed by accelerated growth measures.
The Committee notes the surge of continued growth in the property market and demand for mortgages reflected in the growth in installment sales of 28.1 percent, which is partly the result of subdued inflation and the low interest rate prevailing. However the Committee would like to express a note of caution with regard to poorer households, which may have tied themselves into bonds that they will not be able to afford should the interest rate increase.
- Performance relative to emerging market peers
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It is clear from the information presented in Table 2.1 of the MTBPS 2005 (p15) that the South African economy is benefiting from rapid growth in the world economy. The Committee also notes that the balance of payments positions of the larger economies remains mixed. Thus if there is a sharp and sudden change in this position globally, then this could pose a risk to the sustainability of capital flows and exchange rates. The capital inflows are primarily portfolio investments and thus highly volatile. Should there be any shock to emerging markets, these portfolio investments could exit the country very rapidly. In this context the Committee was of the opinion that the improved export performance in the first half of 2005 is encouraging. In relation to emerging economies, particularly those in Africa, South Africa is likely to move ahead positively in the second and third year of the medium term.
- Growth led by consumer spending
The MTBPS 2005 highlights the persistence of the exceptionally high levels of household consumption expenditure, which in the first half of 2005 grew by 6.3 percent and is likely to remain in that range. It also noted the vigorous investment in private residential buildings in the first half of
- Clearly, consumer-led spending is one of the principal drivers of the current higher economic growth rate.
Two of the economists suggested that this is a significant weakness of the current growth trend, and was likely to pose an obstacle to efforts to drive growth to the 6 percent level. The Committee notes that growth in manufacturing continues to be muted, and consequently imports continue to rise rapidly. As observed in the Committee’s report on Budget 2005/06, this implies that South African manufacturers are not capturing a significant portion of the benefit of the consumption boom: instead the benefit is being exported via the growth in consumer imports, particularly of vehicles, electronic goods and textiles. However in the Committee’s opinion various indicators including new car sales at 27.3 percent and cements sales by 10.2 percent in volume in the MTBPS point to economic growth.
- Accelerated growth employment and labour participation
Increased employment opportunities created by the burgeoning economy will accelerate the reduction in unemployment. The Minister of Finance disagreed with the view that the current economy was fuelling jobless growth and referred to the labour force survey data. It was noted that the ILO confirms the methodology adopted in the current computations of employment.
The average wage settlements anticipated for 2005 are expected to range from 6-6.5 percent and this would indicate lower inflation expectations than those prevailing in 2004, which stood at 6,8 percent. The Committee agrees that the data presented in the MTBPS 2005 shows a growth in formal sector jobs. However, the Committee notes that the decline in the unemployment rate needs to be viewed with caution given the rapid increase in the number of workers that are ‘not economically active’. The Committee is of the view that the challenge of accelerating employment among the youth is one, which an accelerated shared growth policy will address.
- Administered Price Index
The Committee welcomes the release of the Administered Prices Index. However, the Committee is of the view that the inclusion of petrol in the index detracts from the usefulness of the index as a measure of the direct impact that Government price setting has on inflation.
Although the price of petrol is administered by the Department of Minerals and Energy, in the Committee’s opinion the price setting methodology used by the department does not fall within the definition of administered prices as defined by Statistics SA, namely:
An administered price can be defined as the price of a product, which is set consciously by an individual producer or group of producers and/or any price, which can be determined or influenced by government, either directly, or through one or other government agencies/institutions without reference to market forces.
The Committee would like to engage National Treasury and Statistics SA on how changes in the fuel levy, RAF levy, the various excise taxes, the NER levy and similar taxes and levies impact upon inflation. It is not clear to the Committee why vehicle license fees (which are essentially a provincial tax) are included in the Index, while other taxes and levies are excluded.
- FISCAL POLICY
Unplanned savings reflect weaknesses in the capacity of government to spend all of the available resources, which also contributes to the deficit reduction. However as acknowledged by the Minister of Finance this reveals one of the critical vulnerabilities of government. This is the need for the state to strengthen its capacity so that the increasing revenues can be used to reduce poverty and increase quality services.
In the 2005-2006 budget tax revenue was kept well below 25 percent of GDP however in the 2005 MTBPS the main budget revenue is expected to rise above this figure and approaches 26 percent towards the end of the period. The increasing emphasis on accelerated growth and the continued performance of SARS to produce significant increase in revenue collections beyond projections may well account for this revision. However the economic growth is also performing better than expected.
The following two tables compare the baseline MTEF projections presented in the main budget framework for Budget 2005/06, and the MTEF projections in the main budget framework of the MTBPS 2005.
Table 1: Comparing Budget 2005/06 baseline to MTBPS 2005 [pic]
Table 2: Actual and percentage change between Budget 2005/06 baseline and MTBPS 2005
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- Significance of the deficit reduction
Table 2 shows that in 2005/06 the Government expects total revenue to increase by some R30 billion over the baseline figure projected in Budget 2005/06. The government has decided to allocate the R30 billion in extra revenue to the reducing the deficit. None of the extra revenue collected in 2005/06 is being used to finance extra expenditure. Consequently the deficit declines from 3.1 percent project in Budget 2005/06 to 1 percent in the MTBPS 2005.
In 2006/07 and 2007/08, the Government expects total revenue to increase by some R31.6 billion and R34.4 billion respectively over the baseline figure projected in Budget 2005/06. In these years, R14 billion and R11 billion of the extra revenue is used to reduce the deficit, while the balance of R17.6 billion and R23.4 billion goes towards funding extra expenditure. The consequence is real growth in total expenditure, and more moderate deficits than projected in Budget 2005/06.
The Committee agrees with Government that if the extra funds cannot be utilized effectively, they should be used to reduce borrowing. This approach is also consistent with the fiscal management principle that suggests governments should seek to reduce deficits during the upswing phase of the business cycle so as to create space for borrowing when the business cycle enters the downswing phase.
In the Committee’s opinion the significant reduction in the deficit and the projected balanced budget underpins the urgency in developing strategic and additional capacitation in government to ensure efficiency, effective and equitable expenditure of revenue on prioritized service commitments. It was noted that the Minister was not averse to borrowing if this could be justified by increased expenditure and even allow the budget deficit to rise to 3.5 percent, which is not unusual in other sound economies.
- Growth in non-interest expenditure
The Committee notes that despite the tremendous social needs, Government is clearly unable to spend the extra revenues on meeting those needs and hence in 2005/06 has decided to use all the extra revenues to reduce debt.
However, the Committee notes that the rate of growth in expenditure could have been far stronger if departments had had the capacity and plans to manage extra spending. This highlights the lack of skills within departments, and consequently the critical importance of developing management, and specifically project management skills within departments. In the Committee’s view it is a serious matter that departments seem unable to utilize the funds available to reduce poverty.
- Growth in infrastructure spending The Committee supports the Government in its efforts to increase spending on infrastructure. The Committee, however, urges Government to pay special attention to allocative efficiency, use labour intensive methods to maximize job creation and support the development of SMEs as primary contractors, sub-contractors or suppliers.
In the Committee’s opinion BBBEE principles and objectives should inform the allocation of all tenders, and that Public private partnerships (PPPs) are used where appropriate to leverage investment from the private sector. The Committee welcomed the monitoring measures National Treasury had put in place on PPPs and also the training for provinces. Operational costs and maintenance should not be overlooked in the planning and development of infrastructure.
- Surpluses savings and debt service costs
The Committee notes the growing surpluses on the social security funds, and calls on the National Treasury to establish actuarially acceptable levels of cover with a view to possibly reducing the levies that fund these funds.
The Committee welcomes the news that general government saving is expected to become positive by the end of the MTEF period. As a result of Government’s decision to use the extra revenues to reduce the deficit, the projected debt service costs in the MTBPS 2005 have fallen relative to the baseline projected in Budget 2005/06. The consequence is that instead of debt service costs as a percentage of GDP remaining constant at about 3.4 percent they now show a strong downward trend. In the Committee’s opinion this could pave the way for increased expenditure on measures, to increase and upgrade skills required by the economy.
- Borrowing requirement of public enterprises
The following table compares the borrowing requirements of non-financial public enterprises projected in Budget 2005/06 and those projected in the MTBPS 2005.
Table 3: Borrowing by non-financial public enterprises
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The Committee notes that the MTBPS 2005 projects a sharp reduction in public enterprises’ borrowing requirements in 2005/06. This would seem to suggest that certain very significant projects have had to be delayed, or that the public enterprises are able to pay for these projects from the cash they are generating.
The Committee also notes that by reducing the main budget deficit in 2006/07 and 2007/08, the Government has created additional space for public enterprises to increase their borrowing without placing undue pressure on capital markets. The Committee calls on Government to monitor the public enterprises ’ borrowing activities closely to ensure the debt is used productively, and it remains at sustainable levels. Also to ensure that it is structured so as to minimize risk, and Government’s exposure to contingent liabilities.
- TAXATION
The Committee commends the South African Revenue Services (SARS) for its continued good performance as reflected by the fact that the Minister of Finance revised the main budget revenue for 2005/06 upwards by R30.2 billion to R400.1 billion. In the Committee’s opinion progress has been rapid particularly the implementation the administrative measures aimed at supporting small businesses. The Committee looks forward to the publication of the Anti-avoidance discussion document by SARS, and proposes that the issue be the subject of public hearings.
- Medical Scheme membership
The Committee supports the proposed reforms to the treatment of medical scheme contributions and other medical expenses. However it recommends that the Government annually revise the caps placed on the tax-free amounts that taxpayers can claim in respect of their monthly contributions to medical schemes. This is to ensure that the benefit is not eroded by increases in the cost of medical scheme contributions.
- Tax policy considerations for the 2006 Budget
The continued expected growth of the economy and strong revenue performance SARS offers scope to consider the significant reduction of taxes while maintain the policy target of keeping main budget revenue at 25 percent of GDP. The Committee looks forward to the release of the discussion paper on the Tax Reform of Retirement Savings, and proposes that the issue be the subject of public hearings.
- Scope to offer tax incentives to promote SMEs and skills development
In the committee’s opinion this offers National Treasury the opportunity to explore the possibility of making above inflation adjustments to the monetary thresholds and income tax brackets; increasing the incentives given to small businesses; and offering incentives to businesses that provide “learnerships”. The Committee supports the position of the Minister of Finance that in this developmental economy there is a need for business, workers and the government to jointly confront the challenges of expanding SMEs and ensuring their sustainability.
- Reducing the rate of company income tax to stimulate growth
The committee considered the calls on government, by the presenting economists too further reduce the rate of company income tax in order to further stimulate investment and job creation. The committee also considered the Ministers position that a discussion in plans in this regard may encourage companies to arbitrage their income across years so as to take advantage of future lower tax rates.
In the Committee’s opinion a competitive tax regime is only one of the factors that companies consider when deciding on investments, and in this regard support the comments made by the Minister of Finance regarding efforts to stabilize economies in Africa so as to expand the potential market size of the South African economy.
Nevertheless the Committee is of the view that a further moderate reduction in the rate of company income tax would contribute meaningfully to sustaining and fostering the positive investment climate that exists, as well as positioning South Africa more favourably relative to other emerging markets. The Committee continues to support the Government’s position on the secondary tax on companies. However it urges National Treasury to continue to deal decisively with the misconceptions and misrepresentations that exist; and to disseminate information more widely regarding the real effective tax on company profits in South Africa.
- Replacement of the RSC levies
The Committee is of the view that any replacement for the RSC levies must comply with the following principles:
▪ It must promote local level fiscal accountability, in terms of linking responsibility for setting rates, raising revenue and spending; ▪ It must provide municipalities with a stable source of revenue, not one that is unduly dependent on cyclical movements in economic performance or the performance of particular markets (such as the property market); ▪ It must have a broad base, but must not be regressive; ▪ It must be equitable across municipalities, especially taking historical patterns of development into account; ▪ It must be transparent, in the sense that tax-payers be able to understand the tax, must know when they are paying it and how much they are paying; ▪ It must not impose an administrative burden on the individuals or entities required to pay the tax; ▪ It must not undermine the Government’s efforts to promote small businesses; and ▪ It must promote economic unity.
Taking the above principles into account, the Committee’s preliminary assessment is that in addition to the preferred options, namely zero-rating of property taxes and allocating municipalities a share of the general fuel levy, it also supports the use of a municipal electricity levy, particularly if it is structured so as to tax higher levels of domestic consumption.
- RESOLUTIONS ON THE MTBPS 2005
The Deputy President’s shared growth initiative is a robust platform from which to implement a number of the resolutions arising from the committee’s deliberations on the MTBPS.
The Committee therefore urges:
- Government to give the highest priority to the issue of resolving the shortage of skills required to drive economic growth and the delivery of government services. The Committee recommends that the Government develop a range of short, medium and long term policies in conjunction with other role-players in the economy.
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The Department of Labour to take decisive action to ensure that all the SETAs have the necessary management capacity to fulfill there mandate to support the development of skills required in the economy.
- A review of all government’s initiatives aimed at promoting the role of youth in the economy as part of the Deputy President’s ‘accelerated and shared growth initiative’ to make recommendations as to how these initiatives can be made more effective.
The Committee also requests:
- A written response from National Treasury to the issues it has raised in relation to the Administered Prices Index in section 3.5 above.
- A written explanation from the National Treasury as to whether the upward trend in main budget revenue as a percent of GDP to nearly 26% towards the end of the MTEF, reflects a change in the Government’s current policy in this regard.
- A written explanation from the National Treasury to clarify the causes of the sharp reduction in non-financial public enterprises borrowing requirement in 2005/06.
- That when the Income Tax Act is amended to accommodate the new treatment of contributions to medical schemes, that National Treasury consider legislating adjustments of these deductions annually to accommodate the effects of inflation.
- ORAL SUBMISSIONS
The following people made oral submissions before the Committee, some in their personal capacity. Mr T Manuel, Minister of Finance, Mr J Moleketi, Deputy Minister of Finance Mr L Kganyago, Director-General: National Treasury, Ms Noelani King Conradie, NKC Independent Economists, Ms Nazmeera Moola, Merril Lynch (South Africa), Ms Riefdah Ajam, Federation of Unions of South Africa (FEDUSA), Mr Cyril Mlatsheni, Southern Africa Labour and Development Research Unit (UCT).
Report to be considered.
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Report of the Portfolio Committee on Sport and Recreation on Tourism, Hospitality and Sport Education and Training Authority (THETA), dated 15 November 2005:
The Portfolio Committee on Sport and Recreation, having considered and examined the Annual Report of the Tourism, Hospitality & Sport Education & Training Authority for 2004/2005 including the Report of the Auditor-General on the financial statements for 2004/2005 referred to it, reports that it has concluded its deliberations thereon.
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Report of the Portfolio Committee on Defence on a fact-finding visit to Wallmannstahl, dated 11 November 2005.
The Portfolio Committee on Defence, having undertaken a fact-finding visit to Wallmannstahl on 20 August 2005, reports as follows. A. EXECUTIVE SUMMARY
The Portfolio Committee on Defence visited Wallmannstahl on Wednesday, 24 August 2005 to ascertain the size and scope of the land claim of the Wallmannstahl community. The land claims, in general, against the Department of Defence amounts to 311 270 hectares, whilst the claims of the Wallmannstahl community amounts to 1 628 hectares.
The Wallmannstahl land claim concerns four areas: Buffelsdrift, Wallmannstahl West (also called ‘Avenues’), Wallmannstahl East (also called Jericho) and Wallmannstahl Central. A portion of Buffelsdrift is used as grazing land for game by the Bewarea hunting club. Three portions of land in Wallmannstahl West were handed-over to the community, i.e. Avenues one, Avenues two and Avenues three. Wallmannstahl East is in the process of being completed, while the central area is used by the South African National Defence Force (SANDF).
B. TERMS OF REFERENCE
The land claim of the Wallmannstahl community was registered in 1994, however it has not been resolved since then. The Portfolio Committee on Defence received numerous requests for intervention from the claimants and decided to send a three-member team [Appendix A] to do an on-site visit of Wallmannstahl.
C. MAIN FINDINGS
The following findings were made:
- There is a communication gap between the Department of Public Works (DPW), Department of Land Affairs (DLA), the Department of Defence (DoD) and the community, which was a major reason for the claims process not being finalised.
- The DoD’s motivation of ‘strategic purposes’ to retain the contested land was viewed as a smokescreen by the community.
D. BUFFELSDRIFT
The Bewarea club built a fence that cuts across the land that was at the centre of the claim. The chairperson of this club is Mr George Meiring, the former Chief of the SANDF. There was also an electricity sub-station and electrical pylons on the land. According to the claimants, Escom wanted the area under the electric wires to be a no-go area, but the community is convinced that it could be used for grazing. They agreed, however, that the area should not be used for housing.
Mr Schalkwyk of the Department of Land affairs (Appendix C) confirmed that the fence was erected to protect the power line and that the servitude was registered. He added that there should be no interference with the power station. This was acceptable to the claimants. Mr Schalkwyk also stated that Buffelsdrift was handed-over to the claimants and that the Bewarea club will be requested to remove its fence, which was used to control the movements of the game.
E. WALLMANNSTAHL WEST
This area was not contested, because three portions were handed over to the community.
F. WALLMANNSTAHL EAST The DoD agreed to hand this area to the claimants. The claimants are however waiting for the DLA to remove the white squatters from the land, before they occupy the land. The size of the area is about 400 hectares and it included the Pienaars River, which is the main source of water for the farming community.
G. WALLMANNSTAHL CENTRAL STRIP
The DoD used the strip of land (approximately 400 hectares) to connect the Wallmannstahl Main Ordnance sub-depot with its training area, i.e. the Piet Joubert military base. The fence that was erected by the DoD forced the claimants to redirect their cattle approximately 11,5 km to reach the Pienaars River for drinking water. The claimants stated that this strip of land was published in the government gazette as a land claim, however the DoD has not yet released the land, which the DoD argued is of ‘strategic importance’, i.e. as training and storage of equipment.
The claimants and the DoD were in the process of concluding an agreement, but the dispute was that the DoD wanted to fence the 400 hectares in. The claimants were prepared to allow the DoD to use the current road as a corridor, but not the whole 400 hectares, so that the two military areas could be linked. This corridor should not be fenced in, so that the claimants could have access to the river for their cattle.
H. RECOMMENDATIONS
- The DoD should make an assessment to determine whether they really need the strip of 400 hectares for strategic purposes or whether the access road would be sufficient to link the different military areas.
- The remaining snags (e.g. squatters and fences) should be addressed by the department of Land Affairs, so that the Wallmannstahl community can return to the land.
Report to be considered.
APPENDIX A - DELEGATION
PC Defence Delegation
- Mr SB Ntuli - ANC (Delegation leader)
- Mr OE Monareng - ANC
- Mr VB Ndlovu - IFP
- Mr G Campher - Committee Secretary
APPENDIX B – ABBREVIATIONS
ANC - African national Congress DLA - Department of Land Affairs DoD - Department of Defence DPW - Department of Public Works IFP - Inkatha Freedom Party SANDF - South African National Defence Force
APPENDIX C - PARTICIPANTS
Wallmannstahl Representatives
- Mr S Maponya - Treasurer : Wallmannstahl Claims Committee
- Mr BP Motswenyame - Chair : Wallmannstahl Claims Committee
- Mr KW Mmoledi - Member : Wallmannstahl Claims Committee
Department of Defence Representatives
- Brig. Gen BJ Moerane - Director : Facilities Support Management
- Brig.Gen E Navratil - Director : Facilities
- Col JP van Heerden - Defence Fixed Assets
- Lt-Col SB Ramokgadi - Acting Officer Commanding : JSB Wonderboom
Department of Public Works Representative
- Mr FX Mbuli - Deputy Director : Land Reform
Department of Land Affairs Representatives
- Mr CJ Schalkwyk - Director : State Land Management
- Ms N Khuswayo - Land Commission
- Ms J Molefe - Land Commission
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Mr B Mphela - Regional Land Commissioner (North West & Gauteng)
- Report of the Portfolio Committee on Defence on the Public Hearings on the Wallmannstahl Land Claim, dated 25 October 2005.
The Portfolio Committee on Defence, having held Public Hearings on the Wallmannstahl Land Claim on 06 September, reports as follows. A. EXECUTIVE SUMMARY
The Wallmannstahl Community’s land claim was in different settlement phases. The main disputed claim was the strip of 400 hectares of state land [1] that linked two military units [2]. When the claim for the 400 hectares was lodged and published in the government gazette, the Department of Defence did not lodge any objection. The community is currently cut-off from the Pienaars River, which is used for livestock and human consumption, as well as agricultural purposes. The community currently uses a detour of 11,5 km to access the river.
The Portfolio Committee on Defence was briefed on 05 April 2005 by the Department of Defence (DoD) and the Department of Land Affairs (DLA) on the state of land reform and the land utilisation by the DoD. The briefing was uncoordinated and at certain instances contradictory. The Committee made certain recommendations and was impressed that the two departments, as well as the Department of Public Works (DPW) moved swiftly to establish the Land Management Forum, which would enhance the coordination of the three departments to accelerate land reform.
Even though the Department of Defence and the community have moved closer to finalise the Wallmannstahl Land claim, the Committee stated that the desire of the community to return to their land, has to be balanced with the training needs of the South African National Defence Force (SANDF). The committee is of the opinion that a court case, which is expensive and adversarial, would be unnecessary, because the two parties are close to an agreement.
B. BACKGROUND TO THE HEARINGS
The DoD and the DLA briefed the Portfolio Committee on Defence on 05 April 2005 on the status of the land claims against the DoD. The separate briefings of the two departments were characterised by a lack of coordination, confusion on the amount of land that was being claimed and the land that was owned by the two departments. It was also clear that the lack of coordination between the two departments was an impediment to the President’s wishes to accelerate the National Land Reform Programme.
The Portfolio Committee on Defence made certain recommendations, on the basis of the briefing of 05 April 2005, to remedy the situation. The recommendations were: a. The establishment of a structure between the Department of Defence, Department of Land Affairs and the Department of Public Works. b. The surveying of the land used by the Department of Defence. c. The Department of Land Affairs should complete the land audit process. d. The Department of Defence and Department of Land Affairs should finalise the Wallmannstahl land claim by the end of May 2005.
The three departments made a follow-up briefing to the Committee on Tuesday, 06 September 2005 as part of the Public Hearings on the Wallmannstahl Land claim. The three departments made a joint briefing in which they reported that a joint structure or forum, i.e. the Land Management Forum, was established on 20 April 2005, which consisted of senior departmental officials. The forum included the Land Commission, which has to implement the land reform programme. The forum would report to the three directors-general on a bi-monthly basis on: a. The surveying and registration of state land used by the Department of Defence. b. The utilisation of land by the Department of Defence. c. Measures to ensure that the acquisition and disposal of land by the Department of Defence was transparent and in line with the land reform programme.
It was however reported that the Wallmannstahl Land claim remained unresolved. An agreement was being negotiated and the hope was expressed that a signing ceremony would be held for the land that was restored to the community.
The Land Management Forum was in the process of (1) compiling a priority list on land claims against the Department of Defence and (2) to establish target dates for the completion of the identified land projects.
The Department of Defence has returned 109 221,70 ha to the Department of Public Works since 1994. The department currently occupies 414 913 ha of the total 24 253 640 ha of state land, which represented 1,7 % of state land and 0,34 % of land in general. Land claims for 227 333 ha had been lodged against the Department of Defence in terms of the Restitution of Land Rights Act (Act 22 of 1994). The department has agreed that 1628 ha could be returned to the Wallmannstahl community.
C. MAIN FINDINGS
- The three departments (the DoD, DLA and DPW) were committed to the land reform programme, in general and the Wallmannstahl Land claim, in particular, which was initiated in 1994.
- There was a general agreement between the community and the DoD on most of the claims lodged by the community.
- The community wanted to settle all the claims before holding a handing- over ceremony.
- The only area in dispute was the 400 ha strip of land that linked the Wallmannstahl Main Ordnance sub-depot and the Piet Joubert training area.
D. SUBMISSIONS RECEIVED
I. Submission of the Land Commission & the Department of Land Affairs
a. The Land Claim Process Land claims were lodged with the Land Commission in terms of the Restitution of Land Rights Act (Act 22 of 1994). The Commission then researched and validated the claim, whereafter it was published in the government gazette.
A land claim could be resolved in one of three ways; i.e. through:
- an agreement,
- a court decision, if there is disagreement or
- expropriation. The DLA could not apply expropriation, because the land was used by a state department (i.e. the DoD) and it belonged to the Department of Public Works.
It was stated by the Land Commission that the settling of a land claim was a protracted process, due to several reasons:
- There was more than one community that had to be dealt with, as in the case of the Lohatla military base, where three communities submitted claims.
- There were no certificates of ownership or title deed and the land was not registered or surveyed.
- Disagreements between the claimants and the Department of Land Affairs (DLA).
- The current user, e.g. the Department of Defence does not clarify its need or usage of the contested land.
The Commission indicated that the claim could be processed, if mapping was done at least, even though surveying was necessary to register the claim.
b. Alternative land Alternative land was identified, when claimants did not want financial compensation or cannot move to their original land, as it would lead to economic disorder. It was a difficult process, because the location, size and quality of the alternative land might not be to the satisfaction of the claimants. The value of land also differed from municipality to municipality, which was exacerbated by the collusion between private land valuers and public officials.
c. Context Communities were forced off the land by the pre-1994 regime from the community in the 1970s. The land was arable and had sufficient water for livestock and agricultural purposes. The claimed land might be the hub of economic activity today, which necessitates the identification of alternative land, so as not to cause economic disruptions. The question was whether the community would receive land similar in size and quality or bigger to compensate them for the unjust treatment of the past. The DLA stated that it made additional land available to the land that was claimed by the community. The department added that the aim of the legislation was to bring about land reform, but to prevent disorder.
II. Wallmannstahl Community Submission
The community is still in negotiations with the DoD, which wanted to release the land in phases. There is currently a 400 ha portion of land that was in dispute. The community representatives stated that they were officially informed that the DoD used the land for training for the military police agency, the South African Military Health Service and the Special Forces. However, they were informally informed that the land was used by the DoD for animal breeding. The community is currently separated from the Pienaars River, which is used for livestock and agricultural purposes. It was also established that the DoD did not use the land regularly for training, but sporadically.
The official view of the DoD at the public hearings was that it did not yet decide whether to release the 400 ha. The community representatives stated that the claim for the 400 ha was published in the government gazette, but it took longer to settle, due to the attitude of the DoD.
The chairperson stated, in conclusion, that the land in question belonged to the community and that it should be returned to the community, so that the courts, which are expensive and adversarial, could be avoided.
E. RECOMMENDATIONS
- The Minister of Defence should meet with the Wallmannstahl community to bring the process to completion by (hopefully) 24 December 2005 so that an official hand-over of the land to the community can take place in April 2006.
- The Committee believes that the Department of Defence should use the current dirt road, that should not be fenced in, as a strategic corridor to link the Ordnance sub-depot and the training area, so that the community could have access to the Pienaars River. A court case, which is expensive and adversarial should be prevented.
- The committee will monitor the situation so that the parties can finalise the matter by December 2005. If the matter was not settled by 24 December 2005, then the Portfolio Committee on Defence will recommend that the relevant Ministries (Public Works, Land Affairs, Defence) account to Parliament.
Report to be considered.
NOTES
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Public land refers to state land, municipal land and parastatal land, while state land refers to land that national and provincial departments are in possession of.
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Wallmannstahl Main Ordnance sub-depot and the Piet Joubert military training area.
APPENDIX A - ABBREVIATIONS
Brig.Gen : Brigadier-General DG : Director-General DDG : Deputy Director-General SANDF : South African National Defence Force DoD : Department of Defence DLA : Department of Land Affairs DPW : Department of Public Works
APPENDIX B - PARTICIPANTS In attendance: Wallmannstahl Land Claims Committee Mr BP Motsuenyana : Chairperson Mr K Mmoledi : Treasurer Mr S Maponya : Member
Department of Defence Mr January Masilela : Secretary for Defence (DG) Mr Bruce Ramfolo : Chief of Acquisition and procurement (DDG) Mr SD Dlala : Director – Facilities Mr Barney Engelbrecht : Director – Budget Control Brig Gen Ernest Navratil : Director – Defence Facilities (SANDF)
Department of Land Affairs Mr Glen Thomas : Director-General Mr Tozi Gwanya : Chief Land Claims Commissioner Mr Blessing Mphela : Land Commissioner (Gauteng & North West) Mr Danie Pretorius : Deputy Director – Public Land Support Services Mr Chris J Schalkwyk : Director – Public Land Support Mr Deon Theron : Chief Planner - Regional Land Claims (Gauteng & North West)
Department of Public Works Mr James Maseko : Director-General Mr Andre Meyering : Director – Property Policy
INSERT APPENDIX C: From pages 2807 - 2717
- Report of the Portfolio Committee on Defence on an oversight visit to Thaba Tshwane, dated 11 November 2005.
The Portfolio Committee on Defence, having undertaken an oversight visit to Thaba Tshwane on 18 and 19 Aug 2005, reports as follows.
A. EXECUTIVE SUMMARY
The Portfolio Committee on Defence visited different military units in the Thaba Tshwane area from 18 to 19 August 2005 to ascertain the state of the facilities and the maintenance thereof. The delegation was accompanied by military officers and officials of the Department of Defence (DoD) and Department of Public Works (DPW). The military units visited were:
- The South African Military Health Services’ Training Formation.
- 1 Military Hospital
- Special Forces School
- Joint Support Base Garrison (A Mess)
- Defence Intelligence Headquarters
- South African National Defence College
- South African National War College
- South African Air Force College
- South African Air Force Gymnasium
The buildings and land that the units occupy are managed and maintained by the DPW, which is the custodian of state land and facilities and therefore responsible for the maintenance and repair of these facilities. The DPW is responsible for the maintenance and repair of DoD facilities when the costs are above the R5000 threshold, whilst the DoD is responsible for maintenance and repair below the R5000 threshold, i.e. day-to-day maintenance and repair. The DPW provides 80% of the total funding for maintenance and repair and the DoD the remaining 20%.
The approval of the DPW is however also necessary for cases that would cost below R5000, because the DPW has the technical know-how to advise the user, i.e. the DoD on the best course of action. Each military unit has a budget for day-to-day maintenance, but it is insufficient and only used for emergency cases. In most cases it is insufficient to deal with emergencies, which often cannot be covered due to the fast deterioration of state of facilities, coupled with the maintenance backlogs. Spending is prioritised on the core business of the units, which includes training, accommodation and service delivery so that the output is maximized.
The situation with regard to the Defence Intelligence Headquarters and the South African National War College are different, because they are renting their accommodation from private institutions. The maintenance and repair routine is determined by the owner, who is mindful of over-investment in old buildings. The owner addresses the maintenance requirements of these two units, but very gradually. The only units that do not have critical maintenance problems are the South African National Defence College, except for the living quarters of the learners, as well as the Special Forces School, which uses its own capabilities (labour and materials) to improve and maintain its facilities.
The maintenance challenges of the different units are of a generic nature. These challenges includes the continual structural repairs, paint work and piping (water and sewer) maintenance tasks to address the occupational health and safety risks, which are impediments to training, accommodation and the provisioning of proper medical care to patients in the case of 1 Military Hospital. During the tour of the facilities it was found that the facilities were in a general state of disrepair.
B. TERMS OF REFERENCE
The Portfolio Committee on Defence was inundated with reports from the public and the Department of Defence (DoD) that defence facilities were in a bad state. These military facilities included hospitals, buildings used for education and training, living quarters and office buildings. The DoD has been downscaling its day-to-day maintenance and repair programme, due to budgetary constraints and the prioritisation of other defence commitments. This is complicated by the fact that the Department of Defence used the facilities, but major maintenance and repair projects are performed by the Department of Public Works, which is the custodian of state property.
C. MAIN FINDINGS
The main findings by the Portfolio Committee include the following:
- The accommodation of nurses at the Military health Training formation is appalling and needs urgent attention.
- 1 Military Hospital shows signs of structural and mechanical neglect and needs an urgent revamp.
- The decision on the Military Intelligence headquarters location has not been finalised.
- Thaba Tshwane was built on dolomite land and with virtually no upgrade or renovations during the last two to three decades, poses serious structural and maintenance problems for the DoD and DPW.
- There is a communication gap between the DPW and the DoD. At one of the units the DPW stated that the R5000 maintenance threshold was raised to R20 000 per case, but the DoD was not aware of it.
- The units use non-public (or private) funds to a large extend to improve their living and working conditions. They also do weekly inspections and let the vandals pay for damages.
- The Special Forces School is an example of what can be done with own initiative and budget constraints.
- Foreign learners are accommodated in private guesthouses due to the bad state of living quarters and to save the image of the SANDF.
- The living conditions of the learners in some units are not fit for human occupation and severely impede the education and training of learners.
- Some of the facilities have to be upgraded to allow usage by the physically disabled, as well as for women, especially the facilities that catered for operational troops.
D. SA MILITARY HEALTH TRAINING FORMATION
Function and Facilities This training formation provides training to members of the South African Military Health Service (SAMHS). This training is realised as:
- Medical support during military operations and exercises
- Support to other departments (esp. disasters)
- Physical, mental and social welfare of the SANDF
The Formation has the following facilities:
- 34 residential buildings
- 20 special buildings (library, lecture halls, training centres, etc)
- 7 recreational buildings
- 34 office buildings
- 3 workshop and storage buildings
The unit has a two-pronged approach to maintenance and repair. Firstly, the lecture rooms and accommodation receive priority, because training is the core business of the formation. Secondly, the unit commander and personnel do daily and weekly inspections to identify maintenance and repair needs, because the emphasis is on preventative maintenance.
Maintenance and Repair Programme Approximately R1 million is spent per year on day-to-day maintenance. The most expensive and continual maintenance tasks are structural, paint work and piping (water and sewer). This excludes maintenance of roads, fences, ceilings, floors and walls. During the tour of the accommodation facilities for nurses, it was found that the ceilings and window panes were missing, bathrooms had missing tiles and taps and the sleeping quarters did not have curtains, cupboards, chairs or tables. There was also no warm water, no curtains, no storage space and the bathrooms were in general disrepair.
The poor state of the accommodation facilities presents an occupational health and safety risk, which is not conducive to training. This is a big concern for students and their parents. It impacts negatively on morale and therefore performance and the level of patient care. Sometimes international students and facilitators are housed in guesthouses due to the poor facilities.
E. 1 MILITARY HOSPITAL
The Function of the Hospital The hospital provides a comprehensive and self-supporting multi- disciplinary tertiary military health service to: o SANDF members (employed & retired) and their families. o Members of other defence forces o The President and Deputy President of the Republic, former Presidents, former Deputy Presidents and foreign dignitaries.
The following services are rendered: o Medical and Specialist service o Nursing care service o Ancilliary health service o Psychological service o Social work service o Pharmaceutical service o Support service
The hospital’s service delivery is stretched as it has been identified as a Presidential health support unit and a frail care centre or ‘hospice’. It is also identified as a United Nations (UN) static level 4 hospital, which means that UN personnel (e.g. peacekeepers) are treated at this hospital.
The Facilities The hospital complex consists of several buildings: the main building, which houses the patients has eleven floors, other buildings provide accommodation for single nurses, single doctors and married personnel. There are also 4 hangers (for storage), ten operating theatres, two casualty theatres, an intensive care unit, a dialysis unit, a paediatric intensive care unit, a 24-hour laboratory service, a rehabilitation wing, a 24-hour information system network, wards, clinics, offices and stores.
Major challenges
- Maintenance of infrastructure
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Structural deficiencies i. The general maintenance and repair is insufficient, which is evident from the cracks in the walls and floors, loose or missing ceiling panels. ii. There is a lack of plumbing maintenance in the hospital and accommodation blocks, with the result that burst water pipes cause damage to ceilings and equipment. The cisterns are also outdated. iii. There are no shower facilities in the Biokinetic department. iv. There is no access for the disabled to the toilets on the 2nd floor. v. Emergency escape doors are damaged, due to the structural deficiencies of the building.
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Non-compliance to Legal imperatives i. The pharmacy needs sufficient floor space, plumbing & private booths so that patients could receive private counseling. The renovation will cost R237 617, which excluded the structural changes. ii. There is a lack of designated smoking areas. iii. The orthopaedic laboratory needs a new floor and air flow.
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Technical i. There is a conflict between the use of advanced technology and the old design of the building. ii. The power supply system needs continuous attention to minimise interruption so that the life support systems can be supported.
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Mechanical i. The air conditioning needs attention, because the unstable temperatures are uncomfortable for surgical teams and patients, even dangerous for operating patients. ii. The medical air supply also needs attention, because a malfunction led to supply interruption to the high care and intensive care unit. iii. The central vacuum system needs an upgrade, because a malfunction caused non-release of scavenging air. iv. The central heating system was shut down after the warm water pipes burst to prevent occupational safety and health risks. This resulted in extreme cold temperatures and general discomfort. v. The waste collection area is insufficient, because of the increase in waste. vi. The storage space is also insufficient, with the current area being geologically unstable and earmarked for closure.
vii. The roads and fences are in a poor state.
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- Fire safety regulations
- Additional fire escape routes are needed in certain areas. It was indicated that the DPW started a project to address this shortcoming.
- Work started in the paediatric ward to address the shortcomings, but patients were moved to other hospitals, at additional cost to the hospital.
- Well-being in the workplace
- There are insufficient rest and dining facilities, as well as office space.
- There are also insufficient changing rooms for health and cleaning personnel.
- Vandalism Vandalism occurs, because fences are damaged and drains are purposefully blocked.
Achievements The hospital achieved the following: 1. The compressors were repaired. 2. The medical air system was serviced and replaced. 3. Pipes were replaced to activate the temperature control. 4. All lifts are in the process of being replaced. 5. Power saving lighting was installed, which will bring about a saving of R400 000/year. 6. All emergency escape routes in paediatric unit are functioning. 7. New gates were installed at the personnel parking. 8. Two smoking room were completed. 9. Most of the heavy theatre doors were replaced with aluminium doors. 10. Plans for a Presidential medical suite was submitted to Chief- SANDF at a cost of R11 million. 11. It is estimated that the hospital saves the state R20 million per year, because it provides cheaper treatment, taking into account that R4 million was spent on referring patients to other hospitals due to malfunctions in air-conditioning and heating systems.
F. DEFENCE INTELLIGENCE HEADQUARTERS
The Defence Intelligence Division has three buildings, namely the headquarters and two colleges, in Radcliff and Fontana. The Defence Intelligence headquarters is located in the Pretoria central business district (CBD), which raises certain challenges.
The physical location of the headquarters The physical location represents a security risk, because:
- It makes the building vulnerable to reconnaissance and bomb threats.
- It complicates the access control.
- It limits the control over public road users.
- It compromises the safety of military personnel and their property due to the high crime levels.
- It necessitates additional facilities to conduct sensitive operations, because it is located in a depression, which affects communications adversely.
The physical features The physical features of the building limit the installation of special equipment, relevant to military intelligence work. There is also no boardroom and parking facilities for personnel.
Occupational Health and Safety (OHS) The physical location of the building also represents an occupational health and safety risk and the Department of Labour considered the closing of the building on two occasions. The risks for the division include the following:
- A limited fire hazard, because the water pressure is sometimes not sufficient.
- The lifts and escalators are old and sometimes out of order.
- Difficult access for the physically disabled.
- High levels of traffic noise, exhaust fumes and dust from the streets.
- High temperature, especially during the summer and regular fumigation impacts negatively on productivity.
The Defence Intelligence College, Radcliff It is located on the periphery of town at Fort Klapperkop, at a high altitude, because it was an observatory. Its location is conducive to effective communication and sensitive operations and with its good road and air access; it is excellent for an intelligence headquarters. It also has additional adjacent land to meet the needs of the military intelligence division. However, it currently has mostly pre-fabricated structures for classrooms and the instructors’ offices, resulting in high maintenance costs. The Defence Intelligence College, Fontana The college provides intelligence to the SANDF and the region to create a fusion of defence intelligence in the region. It is situated 35 km to the north of the Pretoria CBD. The college has a good location for training in general, however it has makeshift facilities for training purposes.
Future of the Headquarters The DoD has to decide on the future of the Defence Intelligence headquarters: whether to continue renting, to erect its own building or to use current military facilities. The division is of the opinion that the headquarters could relocate to Radcliff, which has excellent facilities and the geographical location that will enhance military intelligence work.
G. SPECIAL FORCES SCHOOL
Function and facilities
The School conducts all basic and specialised common training within Special Forces formation in order to ensure a sound feeding source of qualified Special Forces operators. The School spent R700 000 in 2001 to improve the facilities, before it moving into its current location in 2002. It included the sickbay, mess, duty and guard rooms, toilets (headquarters) and training facilities.
After occupation the unit made the following improvements: upgrade of the sickbay (R20 683), civilian workers’ recreation and ablution facilities (R94 896), training control centre (R36 212), training headquarters (R314 455), briefing room (R43 420), computer training centre (R9 695), vehicle parking area (R33 004), quartermaster stores (R30 188), HQ paving & toilets (R48 349), auditorium (R26 730), kitchen (R67 354) married quarters (R240 947), bridge (R12 357), quartermaster fridges (R200 000), swimming pool (R870 000), which is used for water training of operators.
The expenditure on maintenance and repair from unit’s budget from 2002 to 2005/06 was R3 462 088, i.e. an average of R865 521 per year. The Department of Public Works, however, spent R193 000 over the same four year period.
In addition, the unit spend the following amounts on general repair and maintenance: electrical (R46 597), plumbing (R69 555), sewerage (R48 140) and miscellaneous (R62 284). The unit has two projects in progress, i.e. an outdoor exit trainer (R200 000) and a specialist training unit (R200 000).
Interaction with the Department of Public Works The unit requested seven major capital work programmes from the Department of Public Works. The urban training facility was approved for the 2006/07 and 2007/08 financial years, while feedback is outstanding on (1) a new sewerage system, (2) a new mess building, (3) a training centre, (4) upgrade of the access road, (5) upgrade of the training blocks at the Specialist Training Unit and (6) upgrade of the electrical reticulation system. The unit wants to use their own funds for the security fence around the perimeter, but they await feedback from the Department of Public Works, which has to advise on the tendering process and registered contractors.
The unit experiences the following Occupational, Health and Safety (OHS) problems: exposed electrical wiring, no fire extinguishers, a broken bridge, missing drain covers and blocked or broken sewerage pipes.
The unit used the case study of the swimming training pool to illustrate the modus operandi of the Department of Public Works to maintain the facilities.
The swimming training pool project started in 2003, with a budget of R670
- The funding was forfeited due to the long bureaucratic process. In 2004 the Department of Public Works allocated R870 000 for the construction of the swimming pool. The funding was however forfeited again, due to poor delivery by the preferred contractor. The contractor had no construction experience, did not have a mentor and did not comply with the time schedules. R820 000 was needed in the current budget to fund the project, but a snag list was still unresolved, two months after completion of the project. The snag list included amongst other things: the removal of building rubble and soil, unfinished paving, incomplete water connections, incomplete fencing and the incomplete installation of the sub-soil drain. This procurement process, which resulted in an incompetent contractor being chosen for the project, leaves much to be desired and requires attention from the Department of Public Works.
H. JOINT SUPPORT BASE GARRISON (A MESS)
General Support Bases (GSB) are responsible for maintenance and logistical support to military bases in their sphere of responsibility. However, in most cases the maintenance needs exceed the capabilities of the general support base. The Joint Support Base Garrison provides town management services for infrastructure maintenance, offices and the living quarters.
The Infrastructure The Department of Public Works and not the local municipality is responsible for maintenance in Thaba Tshwane, which is an open military area. The Support Base is then responsible for first line emergency maintenance, i.e. under R5000, while the Department of Public Works is responsible for larger projects. The DPW stated that the R5000 maintenance threshold was increased to R20 000, but the DoD was not aware of it.
Roads, streetlights and security fence The sewerage and reticulation were partially upgraded in 2005, but certain areas still need urgent attention. Thaba Tshwane has major challenges, including the following needs: o The roads need urgent attention, because the roads’ surfaces and drainage system are damaged, while sagging is evident in certain areas. The roads carry a larger volume of civilian traffic through the area in all directions. o Street lighting is unreliable, because of the outdated lighting system, theft of electrical wiring and breakages, resulting in poor visibility. o The security fence is not secure anymore due to pedestrians and criminals using the facility as a short cut or target for criminal activities, such as theft. Security patrols and repairs are not successful to address the matter.
The unit was not complying with the road safety standards due to the prevalence of potholes. The result was that two claims were recently registered against the Department of Defence. Criminals used the nearby township as a safe haven, from which criminal activities are directed at the base, because the fence is in disrepair.
Offices Most of the offices were erected in the 1950/60s and the increased power usage led to overloads and power failures due to outdated electrical systems. The increase in personnel places pressure on the sewerage system, so that stoppages and overflows are the norm. In addition, many roofs are leaking. This has a negative effect on service delivery, because water damage to office equipment leads to interruptions in production. No major upgrading for offices was done for the last twenty years in the area.
The living quarters The Department of Public Works did not implement major upgrades or maintenance for the last 20 years in the married and single quarters. It resulted in:
- Outdated electrical, water and sewerage systems. Water seeps into the walls and floors, because the old plumbing is leaking and old geysers are bursting.
- Leaking roofs, which damage the wooden beams and therefore the structure of the building. It also causes electrical damage and potential fires.
- Blocked drains due to the limited number of toilets leads to hygiene problems.
The living quarters are in need of upgrading. Firstly, it was built for men, but more women are now in the SANDF, due to the changed gender profile. Whilst up to 30 men shared a common living area, the women preferred to stay alone or with a roommate. Secondly, it was built for operational troops, i.e. it did not cater for handicapped individuals.
Challenges Thaba Tshwane is no longer a restricted military area, because the main road is used by the public, as such it is impossible to keep non-military individuals out of the base. The Support Base receives R3,4 million per year for day-to-day maintenance, but it is mostly spent on emergency tasks, like blocked drains, electrical faults and minor works of under R5 000 per case.
The Support Base endeavours to have sound living conditions in the A Mess by:
- Allocating maintenance responsibilities per unit.
- Conducting weekly inspections.
- Holding guilty members responsible for damages.
The Officer Commanding of the Support Base stated that funding was not sufficient for day-to-day maintenance, with the result that patchwork instead of substantial maintenance and repair was done. No major renovation plan is evident in Thaba Tshwane, besides the Repair and Maintenance Project (RAMP). Buildings and infrastructure are deteriorating rapidly. Hygiene and fire hazards are also serious problems. The hope of the base is on the RAMP project, which is planned by the Department of Public Works.
I. SA NATIONAL DEFENCE COLLEGE
The Defence College prepares selected military officers and civilian officials for top-level appointments in the Department of Defence and other state departments. They deliver two training programmes per year (36 members per programme). The duration of courses is 19-20 weeks and there is a diverse profile of students. They also offer seminars.
The facilities are in good condition, except the living quarters of the students. The entertainment area is housed in a grass roofed building, which was build by DoD personnel. The DPW refused to take ownership of the building, because it is difficult to maintain, in addition to being fire hazard.
J. SA AIR FORCE COLLEGE
The South African Air Force College is the only provider of developmental training for all junior and senior officers, warrant officers and non- commissioned officers (NCOs) of the South African Air Force (SAAF). Members of other arms-of-service of the SANDF and foreign students also attend courses at the college. The college is also used to host high profile VIP conferences, meetings and functions.
The college has 201 staff members and 654 learners per year, of which 20 stay in the mess. The NCOs are accommodated in 72 rooms, while the officers are accommodated in 65 chalets. Some of the chalets are however in a state of disrepair. The damaged facilities include:
- Damaged ceilings and defective ceiling lights due to leaking roofs.
- Unsafe paved walkways and erosion of the parade grounds.
- Damaged lapa and chalet roofs.
- Damaged perimeter fence.
- Peeling paint from ceilings and walls.
- Damaged ventilation system and air conditioning units due to water leakages.
- Damaged storm water drain and open sewerage manholes.
- Water leaks due to burst water pipes.
- Cracks in building walls and tennis court surface
- Non-secure and unsafe vehicle parking areas.
Maintenance from the Unit’s Budget The unit spent R200 000 over the last 18 months on day-to-day maintenance. However, it addressed less than 10% of the unit’s requirements. The lack of maintenance and repair has a negative effect on the learning and working environment, as well as the morale and productivity of the staff and learners. The poor state of the facilities also hampers the attainment of South African Qualifications Authority (SAQA) accreditation with the result that the courses of the college will not be included in the National Qualifications Framework (NQF) database.
The Consequences of Limited Maintenance Unhygienic conditions can lead to the outbreak of illnesses, while in some cases the damage to the buildings’ structure is life threatening. The learners had to travel to other units, because of the lack of a mess facility for learners, which affected the available time for classes negatively.
K. SA AIR FORCE GYMNASIUM
The South African Air Force Gymnasium provides basic military training to members of the Air Force and local and foreign interested groups. It currently has six Pakistani learners on a ‘very important person (VIP) protection’ course. The Gymnasium also supports the training of the Protection Services, Fire Department and the School of Cookery.
Maintenance by the Unit
The unit is doing limited maintenance from its own budget. It includes: o The upgrading of the VIP lecture rooms. o The purchase of plants to improve the learning environment from ‘learner improvement funds’. o The painting of parking lanes, as well as the interior of learners’ bungalows. o The building of a fence from scrap metal. o The upgrade of the warrant officer’s mess and the living in quarters of learners and staff. o The upgrade of the learners’ mess with air conditioning and paving.
The Consequences of Limited Maintenance The kitchen equipment exceeds the life expectancy of the manufacturer and has to be replaced to enhance safety. The lack of protective clothing is also a health and safety risk for personnel. The swimming pool is out of order and no funding has been allocated for sport equipment and facilities. The hygiene at the mess is a health risk to learners.
If the lack of maintenance is not addressed urgently, then the facilities will become irreparable and the gymnasium will not be able to perform its core function, i.e. training. As such the required output as determined by the Department of Education will not be achieved. The poor state of the facilities do not provide an enabling environment for training, the accommodation is not suitable for learners and staff, while the messes do not provide a professional service to staff and learners. It was stated that the Thaba Tshwane area is dolomite area, which negates a long term maintenance programme for the military facilities in the area. There are a number of sinkholes, which cause structural damage to the buildings and facilities in general.
L. SA WAR COLLEGE
Function The War College provides defence related education, training and development services as required by the SANDF. These services include war simulation, peacekeeping training, research and development.
The Boulevard building The college is housed in the Boulevard building, which was a hotel previously, in the Pretoria CBD. The building was configured to the tune of R9,4 million, by the landlord, to the requirements of the college. The information and technology requirements of R5 million were met by the state. The current lease, which is renewed annually, will expire in March 2006, but the Military Council approved occupation until December 2006. Different options are explored with regard to the future of the college at the Boulevard, with permanent occupation of the Boulevard to be decided upon. There are advantages and disadvantages by using the Boulevard building.
The advantages are: o The good education, training and development facilities, as well as the information and technology infrastructure. o The college has its own mess and good learner accommodation.
The disadvantages include: o The high monthly costs of leasing, i.e. R254 000 o The personnel structure is approved, but there are many unstaffed posts. o The space is limited, with no sporting facilities and some sections, like the War Simulation Center, are at the Army College, in Thaba Tshwane, 9km away. o The location in the CBD is not conducive to learning, because of the traffic noise and pollution. o The Boulevard is not registered as a pay point with the result that members do not receive payouts at the Boulevard and this poses a danger to their safety.
M. RECOMMENDATIONS
1. Communications between the DPW and the DOD should improve
dramatically with regard to the state of facilities in the DOD and
the maintenance and repair of such facilities.
2. The DPW and the DOD should jointly agree to move away from reactive
maintenance approach towards DOD facilities, to a “preventative
maintenance programme”, as well as an agreed upon action plan to
move facilities from a state of “very poor” to “acceptable”.
3. Many of the facilities in the DOD no longer conform to the minimum
requirements of the Occupational, Health and Safety Act and urgent
attention should be given to co-ordinate efforts between
responsible departments, including the Department of Labour, DPW
and the DOD, to improve this situation.
4. The maintenance threshold of R5000 per case should be increased and
the DoD should be informed officially.
5. The DoD should make an assessment of its required facilities, so
that redundant facilities could be done away with and alleviate
budgetary constraints.
6. Units, like 1 Military Hospital, that provide services beyond the
SANDF, should receive the necessary maintenance and repair budget
to maintain its image and output as an international service
provider.
7. The accommodation of nurses the Military Health Training Formation
should receive priority attention.
8. The defence intelligence headquarters should relocate to Radcliff,
for geographical, technical and financial reasons.
9. The dolomite problem in Thaba Tshwane should be discussed wit the
relevant stakeholder departments, so that a plan of action can be
developed as a matter of urgency.
10. The procurement and tender process of the DPW should ensure that
contractors are competent to execute the requested work.
Report to be considered.
APPENDIX A – DELEGATION
- Mr SB Ntuli - ANC Delegation leaders
- Dr GW Koornhof - ANC
- Mr MS Booi - ANC
- Mr GP Mngomezulu - ANC
- Mr S Dodovu - ANC
- Ms XC Makasi - ANC
- Mr MR Shah - DA
- Mr VB Ndlovu - IFP
- Mr G Campher - Committee Secretary
- Ms M van Niekerk - Researcher
APPENDIX B – ABBREVIATIONS
ANC - African National Congress CBD - central business district DA - Democratic Alliance DLA - Department of Land Affairs DoD - Department of Defence DPW - Department of Public Works GSB - General Support Base IFP - Inkatha Freedom Party NCO - non-commissioned officer NQF - National Qualifications Framework SAAF - South African Air Force SANDF - South African National Defence Force SAQA - South African Qualifications Authority UN - United Nations VIP - very important person
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Report of the Portfolio Committee on Sport and Recreation on Sport and Recreation South Africa (SRSA), South African Institute of Drug-free Sport (SAIDS), and South African Sport Commission (SASC) for 2004/2005 including the Report of the Auditor-General on the financial statements for 2004/2005, dated 15 November 2005:
The Portfolio Committee on Sport and Recreation, having considered and examined the Annual Reports of the Sport and Recreation South Africa (SRSA), South African Institute of Drug-free Sport (SAIDS), and South African Sport Commission (SASC accountable to it, reports that it has concluded its deliberations thereon.
[1] Withdrawn and replaced by Hon Ms D Robinson by Chief Whip of the Democratic Alliance, Hon D Gibson at Joint Rules Committee on 26 October 2005. [2] Withdrawn and Hon Prince NE Zulu nominated by Chief Whip of the Inkatha Freedom Party, Hon JH Van Der Merwe on 27 October 2005. [3] For additional information on vision, mission and financial statement, refer to 2004/05 annual report of the Department of Environmental Affairs and Tourism and the presentation document presented to the committee on 11 October 2005 [4] For additional information on the vision, mission and HR and financial matters related to management and professional staff complement, commercial income, commercial revenue highlights, and audit report comment, refer to 2004/05 annual report of the South African Weather Service and the presentation document presented to the committee on 11 October 2005 [5] For additional information on overview of 2004, vision, mission and financial statement for the year ended 31 march 2005, refer to 2004/05 annual report of the South African Tourism and presentation made to the committee on the 11 October 2005 [6] The purpose of the Working for Wetland Program is to champion the protection, rehabilitation and sustainable use of South Africa’s Wetlands through co-operative governance and partnerships. This program is an interdepartmental initiative between DEAT, Water Affairs and forestry and agriculture and, is funded through DEAT’s Social Responsibility Directorate. [7] For information related to vision, mission, audit committee report and, income and expenditure, refer presentation document on 2004/05 annual report of South African National Biodiversity Institute presented to the committee on 11 October 2005. [8] For additional information related to vision, mission and audit committee report on effectiveness of internal control, monthly reports, evaluation of financial statements refer, to 2004/05 annual report of Greater St Lucia Wetland Park tabled in Parliament on 6 September 2005 and, the presentation document presented to the Committee on 11 October 2005.
[9] Section 65 of the Public Finance Management Act requires that Ministers table the annual reports for the Departments and Public Entities for which they are responsible by 30 September each year.
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MTBPS, p15, 2005