National Assembly - 24 October 2006
TUESDAY, 24 OCTOBER 2006 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14:02.
Acting Speaker Mr G Q M Doidge took the Chair and requested members to observe a moment of silence for prayers or meditation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.
CONGRATULATIONS TO MINISTER FRASER-MOLEKETI ON BEING ELECTED PRESIDENT OF THE COMMONWEALTH ASSOCIATION FOR PUBLIC ADMINISTRATION AND MANAGEMENT
(Draft Resolution)
The CHIEF WHIP OF THE MAJORITY PARTY: Thank you very much, Chairperson. I move without notice:
That the House –
1) notes that on Sunday, 22 October 2006, the Hon Minister Geraldine
Fraser-Moleketi, Minister for the Public Service and
Administration, was elected as the President of the Commonwealth
Association for Public Administration and Management, CAMAP, at its
2006 Biennale Conference currently underway in Sydney, Australia;
2) observes that the conference, which started on Saturday, 21 October
2006, is being held under the theme: Rising to the Challenge:
Enhancing Public Sector Capability;
3) recognises that the organisation’s programmes are widely seen as
strengthening the quality and effectiveness of public
administration while advancing good governance in Commonwealth
countries; and
4) congratulates Minister Geraldine Fraser-Moleketi on her election
and wishes her and the organisation success in their work of
promoting good governance and sound public management practices.
Thank you very much, Chairperson. [Applause.]
Motion agreed to.
The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Acting Speaker, I move without notice:
That the House –
1) notes that the week of 24 October to 30 October has been declared
by the United Nations as Disarmament Week and that it is meant to
highlight the danger of the arms race, and the need to end it;
2) further notes that much progress has been made towards abolishing
nuclear weapons, as well as chemical weapons and land mines, the
total elimination of all weapons of mass destruction has not yet
been realised;
3) recognises that the South African Government has led by example in
voluntarily dismantling its nuclear weapons programme and since
then has adopted a strict policy of disarmament and non-
proliferation with regard to weapons of mass destruction and the
capabilities to produce these weapons;
4) further recognises the right of all states to develop research,
production and use nuclear energy for peaceful purposes without
discrimination; and
5) calls on all countries to increase transparency and security of
their weapons material holdings and to continue practical,
systematic and progressive efforts to advance nuclear disarmament
globally.
Motion agreed to.
AWARD TO DR VANGA SIWISA
(Member’s Statement)
Ms R J MASHIGO (ANC): Thank you, Chairperson. This is a statement to honour Dr Vanga Siwisa. We in the ANC wish to congratulate Dr Vanga Siwisa, who has won the prestigious Pierre Jacques Rural Doctor of the Year Award from the Rural Doctors Association of South Africa. Recognising the dire need for health care for people in the rural areas of our country, Dr Vanga Siwisa sacrificed a comfortable lifestyle and a busy practice in Randfontein to help set up an outpost clinic at Taung. This has resulted in thousands of people from all around Taung being able to access health facilities. These efforts did not go unnoticed.
The ANC continues to work tirelessly for the provision of primary health care in the rural areas by, amongst other things, eradicating the backlog in health services and improving the reliability of doctors and nurses in remote areas of our country. However, we recognise that this campaign to encourage health care professionals to go to the rural areas of our country will not succeed if we do not work with the sector itself. The ANC will continuously work with our people in an effort to bring back a better life for all and urges other health care professionals to emulate this shining example of Dr Siwisa. I thank you. [Applause.]
RAPE STATISTICS
(Member’s Statement)
Ms D KOHLER-BARNARD (DA): Chair, reports in today’s press reveal that almost one fifth of South African men have raped a woman and many have done so by the age of 17. This revelation points to a cancer in our midst which will continue to grow and spread, unless effective and urgent steps are taken to root out the causes of the crisis.
According to police statistics for 2005-06, a total of 54 907 rapes were reported to the police during the period of one year, that is 150 reported each day. The reality is thus that over 1500 women are raped each day in this country but most choose not to report that it had happened. Reports that 82 children are charged every day for raping or indecently assaulting other children is yet another indication that we have a serious societal problem on our hands.
However, our criminal justice system is not playing its part and detection rates are abysmal, our forensic science laboratories are in a shambles and our courts are in crisis, with case backlogs growing every year. Almost 68% of all reported adult rape cases and 59% of all child rape cases never go to court, with only 7% of all reported rapes ending in conviction. Rapists know that they can get away with their crimes. Why is it that nothing this government has done during the past 12 years has turned this utterly revolting tide? [Applause.]
VIOLENCE AGAINST INMATES AT POLLSMOOR
(Member’s Statement)
Mrs S A SEATON (IFP): Acting Speaker, the IFP notes that serious allegations have been made against warders of Pollsmoor Prison, after two inmates stabbed a colleague. It has been alleged that senior wardens forced 300 inmates to strip in front of female warders and then proceeded to beat them with batons. In addition, dogs were also allegedly set on the inmates. From reports it is thought that at least three convicts sustained broken arms and legs, and others had to be treated for cuts and bruises. The IFP, therefore, calls on the Minister, the department and the area commissioner of Correctional Services to immediately launch an investigation into these allegations and to report the findings to Parliament as soon as possible. If these allegations are found to have a basis in fact, the involved correctional services personnel must be charged and brought before disciplinary hearings as soon as possible. If necessary, criminal charges must also be brought against them.
It is completely unacceptable that collective punishment of this violent nature can be meted out to inmates in the democratic South Africa. It smacks of the old days when prisoners were regularly tortured and abused. This has no place in our society, especially when it is considered that rehabilitation of offenders is supposed to be one of the cornerstones of our system of corrections. I thank you.
DEVELOPMENT FUND FOR WOMEN
(Member’s Statement)
Ms N J NGELE (ANC): Thank you, Chairperson. This statement is on the women’s fund. The ANC supports the resolution taken by the recently held women’s conference to explore the establishment of a developmental women’s fund and strengthen initiatives such as the Malibongwe project to assist with creating an enabling environment for those women at the bottom end of the economy. Women, particularly in the rural areas, still face serious difficulties on issues such as access to credit.
South Africa, the continent and the whole world will not realise their full potential, unless and until women are placed at the centre of developmental efforts. As members of the ANC, we came clearly to define the emancipation of women, as an inherent, inalienable and defining feature of our struggle for national liberation. Thus we arrived at a firm determination that our freedom could never be complete, unless it involved the emancipation of the women of our country. We urge the government to explore the possibility of financing the fund, along the lines of the Umsobomvu Youth Fund. Thank you.
DEATH OF LEBO MATHOSA
(Member’s Statement)
Mr G T MADIKIZA (UDM): Chairperson, the UDM extends its sympathies to the family, friends and colleagues of the late musician Lebo Mathosa. Her death at the young age of 29 comes as a harsh reminder of the fragility of human life. Our thoughts and prayers are with her loved ones during this time of bereavement.
Lebo Mathosa shot to fame as a member of Boom Shaka and later launched a highly successful solo career. In the process, she received numerous music awards and accolades. She also appeared in numerous local television shows and nobody will dispute that she had a long and distinguished career as an artist ahead of her. As a person she was rightly acknowledged as a hard worker, who respected those she worked and interacted with. Her outgoing personality and easygoing, positive attitude, as well as her undeniable lust for life, were the qualities that endeared her to many people.
It is sad that the country has lost so many of its leading young musicians in the past year and doubly so that another of them has succumbed in a road accident. Our roads claim the lives of more than 10 000 South Africans every year. The cost to our society, our families, our industries and our social fabric as a whole is simply too high. It is time we initiated a concerted new campaign to end this carnage. It is abundantly clear that current strategies are simply not delivering results. [Time expired.]
SHARE OFFER BY MEDIA24
(Member’s Statement)
Dr C P MULDER (VF PLUS): Agb Meneer die Waarnemende Speaker, Media24 sal wys wees om kennis te neem van die oorweldigende verontwaardiging en reaksie van die publiek oor sy huidige aandeelskema. Dit gaan nie hier oor die 15%-aandeelhouding van Media24 wat hierna onder swart beheer gaan wees nie. Ons moet ook onthou dat “swart” volgens die regering se breë definisie van “swart” hanteer word. Dit gaan oor die manier waarop dit gedoen word. In ooreenstemming met die ANC-regering se voorskrifte word op ’n ongevoelige manier, suiwer op rassegrondslag, aan sekere mense die geleentheid gegee om 80% van die gesubsideerde aandele in Media24 te bekom, terwyl ander landsburgers op grond van hul ras die geleentheid ontsê word. Om die ANC-regering klakkeloos na te volg deur te beweer dat alle swartes, bruines en Indiërs voorheen benadeel is, of nog steeds is, is onsin. Hiervolgens gaan Naspers nou onder andere skatryk swart- en Indiërmiljoenêrs en ander se aandeelaankope subsidieer met 80%, terwyl arm witmense, omdat hulle wit is, direk benadeel word. Dit is suiwer rassisme.
Die VF Plus het egter begrip vir Media24 se huidige dilemma en daarom wil die VF Plus aan Media24 ’n uitdaging rig, ’n uitdaging waardeur Media24 nie net sy geloofwaardigheid kan herwin nie, maar ook kan doen wat reg en billik is. Kom dadelik met ’n verdere aandeleaansporingskema van 5-10% op dieselfde gesubsideerde manier, maar dié keer spesifiek vir jong, huidig benadeelde witmense van 25 jaar en jonger. Hier is ’n geleentheid vir Media24 om ’n verskil te maak en sodoende ’n nuwe rigting vir Suid-Afrika se jeug aan te dui. Die kans is daar. Doen dit. Ek dank u. (Translation of Afrikaans member’s statement follows.)
[Dr C P MULDER (FF PLUS): Hon Mr Acting Speaker, Media24 will be wise to take note of the overwhelming indignation and reaction of the public about its current shares schemes. Here it is not about the 15% shares in Media24 that after this will be under black control. We must remember that “black” is being dealt with in accordance with the government’s broad definition of “black”. It is about the manner in which it is done. In accordance with the ANC government regulations, in an insensitive manner and based just on racial grounds, the opportunity is given to people to get 80% of subsidised shares in Media24, while other citizens are excluded on the basis of their race. To follow the ANC without rhyme or reason, by claiming that all blacks, coloureds and Indians have previously been disadvantaged, is nonsense. According to this Naspers will now, among others, subsidise very wealthy black and Indian millionaires and others’ purchases by 80% while poor white people are adversely affected directly because they are white. That is blatant racism.
The FF Plus, however, understands the current dilemma of Media24 and therefore the FF Plus wants to challenge Media24, a challenge whereby Media24 can not only gain back their credibility, but can also do what is right and fair. Immediately come up with a further shares motivation scheme of 5-10% in the same subsidised manner, but this time specifically for young, currently disadvantaged white people of 25 years and younger. This is an opportunity for Media24 to make a difference and by this indicate a new direction to the youth of South Africa. There is an opportunity. Do it. I thank you.]
SA’S MEASURES AGAINST POLIO COMMENDED
(Member’s Statement) Mr B L MASHILE (ANC): Chairperson, the ANC welcomes the declaration by the Global Certification Commission subcommittee in Africa, the African Regional Certification Commission, that there is enough evidence showing the nonexistence of the wild polio virus in South Africa. This certification has been the result of a sustained campaign of vaccination of children over the years.
The African Regional Certification Commission has expressed satisfaction with the measures South Africa has in place against polio, including the political commitment to eradicate this childhood disease.
Building on this success, the ANC will continue to work with our people to ensure a better life for all. We, therefore, wish to congratulate the Department of Health and its partners in the social cluster, and organs of civil society, on their remarkable and far-reaching success in reducing the burden of the disease and poverty in South Africa, the SADC region, as well as the African continent. I thank you.
PUPIL VIOLENCE AND POOR DISCIPLINE
(Member’s Statement)
Mr N T GODI (PAC): Chairperson, the PAC joins the growing chorus of condemnation and concern at the pupil violence and poor discipline in schools. The recent reported cases of stabbings and deaths must be of concern to all patriots. We, however, need to acknowledge that the department and the school authorities are dealing with the manifestation of a bigger societal problem.
Putting our schools and pupils on the right footing requires a collective effort from all societal formations, together with the education authorities. Addressing key societal challenges such as the state of families, morality, poverty, unemployment, violence and what society gets fed by the media can go a long way towards creating the objective conditions for turning all our schools into centres of learning, culture and excellence.
The call for a summit for all stakeholders is not unreasonable. The Minister of Education’s latest suggestion should be a basis for further input or engagement. The PAC stands committed to making the fullest positive contribution to this national endeavour. Thank you.
SOUTH AFRICA’S PORT OPERATIONS SHOULD BE OPENED TO PRIVATE SECTOR
(Member’s Statement)
Mr J J M STEPHENS (DA): Chair, the US$50 congestion surcharge considered by shipping lines docking at the Durban port could cost South African importers more than R500 million per year and push up inflation. This crisis resulted because the ANC government missed the ship with long-term capital expenditure planning.
With the promise of Asgisa still having to be felt, congestion will remain a problem at South Africa’s ports over the medium term. In the light of the burgeoning demand for, and the lack of logistical efficiency at our country’s ports, the state needs to reconsider opening up South Africa’s ports operations for increased private sector participation.
There is no need for South Africa to reinvent the wheel. Singapore’s port authority, for example, is the second most efficient port operated in the world, and it is an example of an expert port operator that is internationalising its business. The Singaporeans have an excellent track record with knowledge transfer to locals and have already been contracted to manage certain of the operations of the port of Rotterdam, which is the most efficient port in the world.
They’ve also expressed interest in doing business in South Africa. The ANC government needs to show that it is serious about driving down the cost of business and of consumer goods by making our ports more efficient. Thank you.
ERADICATION OF BUCKET SYSTEM AT MSOBOMVU DISTRICT MUNICIPALITY
(Member’s Statement)
Mnu S E ASIYA (ANC): Mhlalingaphambili, urhulumente oxhuzulwa imikhala okhokelwa ngumbutho wesizwe i-ANC, kwezinye zezithembiso zawo, watsho ukuba siya kuba siyiphelisile inkqubo yokuthuthwa kwelindle ngamabhakethi. Abantu baseMsobomvu, oquka i-Noupoort, i-Colesberg kunye ne-Norvalspont, ngokwezithembiso zethu, urhulumente waseMsobomvu uqalisile ukuguzula amabhakethi kwilokishi yabebala ekuthiwa yi-Louwryville kunye nekuthiwa yiKuyasa, lokishi ezo ebezisebenzisa amabhakethi okoko zakhiwayo, efaka endaweni yawo imibhobho yogutyulo-lindle yala maxesha.
Thina singamalungu ombutho wesizwe i-ANC siya kuthi gqolo sisebenzisana nabantu bakuthi ukudala ubomi obungcono kumntu wonke. Camagu! [Kwaqhwatywa.] (Translation of isiXhosa member’s statement follows.)
[Mr S E ASIYA (ANC): Chairperson, the ANC- led government stated very clearly, amongst its promises, that the bucket system would be eradicated. The government has already embarked on its programme of the eradication of the bucket system in the following communities: Msobomvu, Nouport and Colesberg, as well as Norvalspont.
In terms of our promises, the government has begun eradicating the bucket system at the coloured township called Louwryville as well as at Kuyasa, which have been utilising the bucket system since their inception. The bucket system has been replaced with the modern waterborne system.
We, as members of the ANC, will continuously co-operate with our people in ensuring that there is better life for all our people. Thank you. [Applause.]]
MUNICIPALITIES TO RAISE OWN FUNDS
(Member’s Statement)
Mr M B SKOSANA (IFP): Chairman, National Treasury’s recent initiative to encourage municipalities to raise their own funds, or revenue if you like, presents the legislature and government with an interesting concept, which, if pursued, carries with it substantial economic implications for local government.
Likewise the President, during izimbizo in the south of KwaZulu-Natal last weekend, alluded to the need for economic solidarity at the local village and community levels. Both views, beyond being complementary, acknowledge the need for critical appraisal of particular aspects of the current South African economic practices.
Despite promising economic growth, the economics of unfair competition and greed still persist throughout the entire strata of our society, accumulating the wealth and resources of the nation in the hands and control of a few.
On the other hand, in order for libertarian municipalism, as seen by the National Treasury, to succeed, it must be underpinned by participatory economic planning and activities that are geared at effecting a just distribution of the nation’s resources. This potentially means that the workers and consumer movements, the unemployed and the poor people’s movements, co-operative movements, environmental movements at local and municipal levels should agree to take part and contribute towards the development of the economic plan.
Nevertheless, the critical questions of co-ordination, co-operation, equity, racism and patronage powers between and within the various municipalities will still persist. I thank you.
EDUCATE CONSUMERS ON RESPONSIBLE SPENDING
(Member’s Statement)
Mr B A MNGUNI (ANC): Chair, even though our economic growth is driven by household consumption, it is rather a cause for concern that domestic consumers finance their consumption through debt. This has resulted in consumers being trapped in unsustainable debt, which has put pressure on our inflation rate.
The recent interest rate hikes are an attempt by the Reserve Bank to curb inflation resulting from reckless borrowing and expenditure. We urge the financial services sector to educate consumers on personal debt management and responsible spending.
The ANC urges all South Africans to limit their appetite for debt and try to live within their means. If the household debt doesn’t decline, we are bound to have another interest rate hike very soon. Thank you. [Applause.]
UN DEVELOPMENT PROGRAMME REPORT
(Member’s Statement)
Dr P J RABIE (DA): Chairperson, the United Nations Development Programme Report released yesterday made a number of economic policy recommendations for South Africa, echoing what the DA has been saying all along.
The UNDP report advocates the use of government subsidies to create jobs. In this regard the DA has called for tax offsets for business for job opportunities created, and the use of annual opportunity vouchers to assist the integration of school-leavers into the formal economy.
Secondly, the report backs the use of customer sector programme for the development of priority sectors. Government, while paying the necessary lip service, has yet to produce on its promises on the development of a CSP for clothing and textile manufacturing, one such priority sector.
Thirdly, the UNDP report questions the Expanded Public Works Programme’s job-creating capacity as punted by government. As the DA has said before, given the scale of the programme, the EPWP will only make sense if it has the improvement of the future labour market performance of EPWP participants as its main goal, not job creation itself.
Judging by the UNDP report, the DA clearly has its ear much closer to the ground when it comes to the economic policy that South Africa needs to create jobs and opportunities for all. Thank you, Chair.
THE 1987 MINEWORKERS’ STRIKE
(Member’s Statement)
Mr T G ANTHONY (ANC): The dispute between the Chamber of Mines and the National Union of Mineworkers’ led to the 1987 national strike. The massive 1987 mineworkers strike was the biggest and the costliest wage dispute in the history of South Africa. This is the strike that was also called “the seven days that rocked the chamber”.
The Chamber of Mines, the true bastion of South African capitalism, became one of the crucial arenas in which the strength of organised workers’ ability to contribute to the struggle to redistribute the wealth of the country was put to the test. The strike lasted more than seven days and was followed by mass dismissals by employers. Black Rock Mine was one of those mines that dismissed its employees.
The National Union of Mineworkers mobilised between 250 000 and 340 000 mineworkers, through a successful ballot, to go on strike for improvement in wages and conditions of employment.
The dismissals at Black Rock Mine and in other parts of the country remain vivid in our memory even today. The Kuruman Labour Centre sit-in reminds us about the brutality of apartheid, a capitalist system and a system that was driven by greed and profit maximisation, by confinement to the hostel system, by meagre wages and by being kept away from one’s family and children.
The action by those ex-mineworkers sitting in at this labour centre required the intervention of the constituency office, so that they could claim back the benefits lost from their dismissal by the Chamber of Mines from their Black Rock unit. [Time expired.]
UPSURGE OF VIOLENT BEHAVIOUR IN SCHOOLS
(Member’s Statement)
Mr S J NJIKELANA (ANC): The recent upsurge of violence in our schools should not come as a surprise, but ought to be cause for great concern to our country. The recent acts of violence by teenagers in schools do definitely not make us proud, both as parents and parliamentarians. As a society we have not yet fully outgrown the culture of violent behaviour in general.
The culture of solving disputes through any means other than violence still has to permeate through the enormous recesses of our communities. Just recently, we had a national project of electing school governing bodies. Should we not ask ourselves, as parliamentarians, what role we play in ensuring the quality and successful election of those SGBs? Therefore, what efforts have we made to ensure that SGBs provide good leadership to their schools, such that violence in all its forms begins, at least, to subside in schools?
I very strongly maintain that in spite of the constitutional obligation that the government, through the Department of Education, has of providing security for our children in schools, we too as parliamentarians have a role to play in this daunting task.
Let me draw your attention to two core objectives of Parliament: facilitating public participation and involvement, as well as facilitating co-operative government. The ANC will continue to work with all the stakeholders, including our SGBs, in our efforts to solve the security challenges facing our learners and educators. I thank you. [Applause.]
RAPE CASES
POLLSMOOR PRISON
MINISTRY OF HEALTH
UPSURGE OF VIOLENT BEHAVIOUR IN SCHOOLS
(Minister’s Response)
The MINISTER OF CORRECTIONAL SERVICES: Thank you very much, Chairperson. I will quickly give three responses. One is on the issue of rape cases. The Department of Safety and Security, together with the cluster, is working very hard to make sure that these cases decline, and also to meet the Department of Justice and Constitutional Development in dealing with these cases as they are reported. We should definitely be commending the police for the work they are doing and always encourage them to do more, because there is so much for them to do.
The second response is on Pollsmoor. I do not take reports only from newspapers, hon Seaton. You were in our portfolio committee, you stayed for only three minutes and then you left. You could have raised that. You could have raised some of these issues. [Interjections.] Was it an hour? It seemed like three minutes to me. Your watch doesn’t work.
We would also never ever … [Interjections.] And I know what happens. I don’t even have a watch.
Mr M J ELLIS: [Inaudible.]
The MINISTER OF CORRECTIONAL SERVICES: Mr Ellis, I am not talking to you. The Minister has seen the reports that were in the papers, and the Minister will deal with that case, not through the newspapers but through the right channels. I will go to Pollsmoor and deal with that.
I don’t believe that any offenders would be stripped naked in front of female offenders, because they are two separate entities. So, whatever you read, please don’t take it as if it is the Gospel. We will conduct investigations, and we will make sure that we charge those who are doing wrong things, hon Seaton.
The last response is on the Ministry of Health, which was brought by the ANC. The only thing I can say about that is, “Halala, Department of Health, halala!” Well done! The last thing, on education, because it is one cluster … Well, it is also nice to be one of a few in Parliament and answer all these statements. The Minister of Education, the hon Godi, the hon uSisa and all formations in our country should help. Parliamentarians also have a role to play in this. We must do something about the violence in our schools. It is just not acceptable.
Therefore any help to try to rid our schools of this violence will be welcome. I know that the Minister of Education is looking at that situation and is trying to address it. As parents, we also ought to play a role. Families ought to help in this situation. Thank you very much.
PORT OPERATIONS
UNDP REPORT
(Minister’s Response)
The MINISTER FOR PUBLIC ENTERPRISES: Chair, may I address, firstly, the matter of the ports and, secondly, the matter of a UNDP report. Let me say that I think this matter has been dealt with in the responses from Transnet and Public Enterprises, in that there have been specific conditions in recent periods in Durban around servicing the container terminal, mainly wind conditions. The question of whether there would or would not be a surcharge is a matter that will be dealt with amongst the shippers and our liaison with them as Portnet and port operations. Let me say that the Durban container terminal is now moving record volumes of containers. We are very cognisant of the need to increase our container capacity. I think you sit on the portfolio committee, and you would have also been aware that we are going to expand pier one and have a range of other plans.
As we have indicated all along, we are very open to partnerships, and the final port master plan has been before the Transnet board. We have also looked at it as the Department of Public Enterprises, and we are quite open to forming partnerships. But, certainly, it is not as simple as you try to make out: that we should just bring in port authority. To promote any one organisation against all others is not correct. This would have to be a negotiating process. We will have to decide on what basis, how, where and who we would bring in as partners.
I think we are definitely making progress. The efficiency levels are improving and, of course, it is very good to be dealing with the problem of economic success as opposed to economic failure.
That brings me to the second issue. Fortunately, this government has access to many advisers. I think many of you are familiar with the group of economists we loosely call the Harvard group, which is a very systematic research project that has access to government information, where we exchange views with them. We have no shortage of access to advice or advisers.
Of course, we would welcome any study if it were done under the auspices of the UNDP. We would look at these matters. But, at the end of the day, governments must govern; they can’t change policies every five minutes when they get some new research group giving them advice. These may have mirrored, or they may not.
But I think you would already know that there is a very firm view in South Africa - and it has been part of the tremendous success of our fiscal and economic policy - which is that, generally speaking, we are not in support of subsidies. These can be exceptionally dangerous economic interventions. If your economy starts spiralling in various ways and your subsidies get bigger and bigger, you place yourself in an exceptionally dangerous position.
Now, we do have certain support measures for learnerships. We do have certain support measures for employment conditions, which the Minister of Finance has announced on a number of occasions in recent budgets. But the general approach of the South African government is to make sure that you have an exceptionally robust and defensible fiscal system. That means we don’t like lots of tax incentives, we don’t like lots of subsidies, and we can be pretty confident that this is a formula for success, because the economy is performing better than it has ever performed before.
So, we welcome advice, we listen to it, but we can’t govern on the advice of every adviser. We would have chaos. We govern through a proper policy- making process within the majority party. We govern through a process of consultation and with a wide range of experts and, of course, we come to Parliament. Economic policy cannot chop and change.
Everyone is an expert on economic policy. The opposition claims every success, but never admits any failure. Of course, you all would never have a failure, because you have no responsibility for government. So, you’ve got no failures. [Interjections.] We will see where you do govern, how you will go. I am sure you will do exactly what we did - you will have a few failures.
The ACTING SPEAKER (Mr G Q M Doidge): Thank you, hon Minister. Your time has expired.
The MINISTER FOR PUBLIC ENTERPRISES: Could I just thank them for their advice? We have listened but, of course, we take it with a pinch of salt. Thank you.
WOMEN’S FUND
SERVICE DELIVERY AT A MUNICIPAL LEVEL
(Minister’s Response)
The DEPUTY MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Thank you, hon Chairperson. I’m going to respond to two statements. The first will be the Women’s Fund; and the second one will be service delivery at a municipal level.
Hon member, through you, Chairperson, I wish to share with you that this government is highly committed to any initiatives that attempt to enhance women’s development, be it political or economic, hence our support for the possibility of exploring the establishment of a women’s fund. That is the first one.
The second one from the …
Mr M J ELLIS: Mr Chairman, I rise on a point of order again. We’ve had six ministerial responses already. The Minister of Correctional Services did three, Minister Erwin did two, and now the hon Deputy Minister has done one. So that is six responses, and I think that is it.
The ACTING SPEAKER (Mr G Q M Doidge): Well … [Interjections.] Order! Order! Hon Ellis, they have been very economical with time. For instance, Minister Balfour gave four very brief responses in two minutes. So I’m not sure whether you would like to benefit from the responses. I would appeal for some flexibility. I think whilst the responses are available for members of your party that made the statements, that maybe you’d like to benefit from the responses.
Mr M J ELLIS: Mr Chairman, in view of the fact that Minister Balfour only spoke for two minutes, it was a great relief. We’d rather hear some sense now, so let’s continue.
The ACTING SPEAKER (Mr G Q M Doidge): Thank you for your understanding, Mr Ellis. We proceed, hon Deputy Minister for Provincial and Local Government.
The DEPUTY MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT: Thank you, Chairperson.
The second statement deals with service delivery at a municipal level. We want to assure the hon member that we congratulate the Municipality of Msobomvu on the service delivery programmes that they have actually embarked upon. Also, in February the President addressed the nation and gave a commitment to the eradication of the bucket system by 2007, and those programmes taking place at municipal level are, in fact, in line with that programme and the commitment given by this government. We’d like to say “Congratulations on the service delivery”. Thank you. [Applause.]
CONCERN ABOUT ESCALATING PERSONAL DEBT
THE DA’S ECONOMIC POLICY
(Minister’s Response)
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Dr R H DAVIES): Chair, I want to respond, firstly, to the statement by the hon Mnguni. I think the hon member is quite right to be concerned by the escalating personal debt, although of course we know that consumption expenditure is driving growth.
The hon member refers to reckless borrowing. I think we need to recognise that it takes two to tango – that for every borrower there is also a lender. And, I think, that what we are seeing is perhaps not just households being reckless in their decisions, but also a proliferation of opportunities and all sorts of inducements to take credit from all kinds of levels of the financial sector.
We need to be clear that what we have in place is the National Credit Act, which deals with the issue of reckless lending. What we will be vigilant about from government’s side is to avoid a situation in which people are induced to take on debt, and then they find their names in the credit bureau and they don’t have access to credit in the future. The National Credit Regulator is hardly in place, but we will be looking to it to be vigilant in instances of reckless lending and to act appropriately in that case.
I’d also like to say a little bit on one aspect of the statement by Dr Rabie. I must say that I need to have my annual look at the DA’s economic policy. I’m surprised to hear that the DA’s economic policy is about subsidies for employment and sector policy. I always thought it was about tax cuts for the rich and market fundamentalism. Nevertheless, I need to have another look.
I want to say to him regarding the one thing he did say about a customised sector programme for the clothing and textile sector, that, in fact, I think he is completely mistaken on that. Considerable work has been done on a clothing and textile CSP. It has been approved largely in its overall shape by most of the stakeholders, which, I think, is no mean achievement. There are 50-odd key action plans. This CSP needs only minor tweaking, and then an implementation strategy. So considerable work has actually been done on a clothing and textile CSP. I just wanted to inform the hon member about that. Thank you.
DEBATE ON INTERNATIONAL DAY FOR THE ERADICATION OF POVERTY – WORKING
TOGETHER OUT OF POVERTY
Mr S A MSHUDULU: Chairperson, hon members, it is an honour for me to represent the ANC in this debate on this day. This debate takes place in the very same year when we celebrated 50 years of the Freedom Charter, 50 years of the march by the women of this country against oppressive apartheid laws and 30 years of a revolt by our youth against forced Afrikaans as a medium of education in 1976.
My approach to this debate will focus on the role of local government in the fight against poverty. This will entail my understanding of poverty as it relates to South Africa and the continent. I will briefly unpack how poverty is measured for us to strategise on solutions to the problem, including its manifestations. I will also structure my discussion to reflect three pillars on which local government deals with the eradication of poverty: the developmental role of local government in poverty alleviation, governance and local government and the role of women in local government.
According to an article in a journal on public administration, Renosi Mokgati from the HSRC writes:
Poverty is a multidimensional phenomenon. It is understood as a condition that manifests itself in a number of ways, including the lack of income, insufficient resources and vulnerability to social, political and environmental shocks. Individuals and households become vulnerable because they lack the assets or combination of assets that can enable them to cope or manage the negative effects of the external shocks.
Poverty is a result of a number of interrelated factors. According to the World Bank, South Africa as a developing country has the character of other developing countries in terms of high population growth, low per capita real income, high unemployment, disguised employment rate, and low productivity, and high levels of poverty.
Chairperson, because of bad planning under apartheid and a lack of a developmental agenda, South Africa remains with the following challenges that are directly linked to poverty: the eradication of poverty and extreme income and wealth disparities and inequalities, the provision of access to quality and affordable basic services to all South Africans, a sustained reduction in the unemployment rate and the attainment of a sustainable high economic growth rate.
It cannot be denied and it is an undisputable fact that the historical background to this subject in South Africa has left an indelible problem. Apartheid’s separate development has promoted the deprivation of services with regard to the majority of the population. How has it promoted environmental degradation? Against this backdrop provincial and local government is at the coalface of everything. It becomes relevant to us addressing these challenges through its mandate and interventions. Let me quote President Thabo Mbeki on the occasion of his inauguration, as well as the tenth anniversary of our freedom in Pretoria:
South Africa was a place that decreed that some were born into poverty and would die poor.
The ACTING SPEAKER (Mr G Q M Doidge): Order, hon member. Just take your seat for a minute. Can we lower the noise levels. Please proceed.
Mr S A MSHUDULU: Let me quote the President:
South Africa was a place that decreed that some were born into poverty and would die poor; their lives in the land of gold and diamonds cut short by the viral ravages of deprivation. It was a place where others always knew that the accident of their birth entitled them to wealth. Accordingly this put aside all human values, worshipping a world whose worth was the accumulation of wealth. It was a place where to be born a woman was to acquire the certainty that you would, forever, be a minor and an object owned by another. Whereas to be a man was to know that there would be another over whom you would exercise the power of a master.
Chairperson, this sad state of affairs led to the corrective measure put to government by the President in the very same year in his state of the nation address, and as a directive to this Parliament. It was on government’s commitment as it relates to local government, to move our country forward decisively towards the eradication of poverty and underdevelopment in our country, taking care to enhance the process of social cohesion, to strengthen the system of local government as it has been done.
Furthermore, it was to integrate our system of governance responding effectively to the requirement of co-operative governance. As you would know, Chairperson, we have passed an Act on intergovernmental relations to mobilise all our people voluntarily to work together to achieve the task of reconstruction and development, to help reconstruct a new world order that is more equitable and responsive to the needs of the poor of the world, who constitute the overwhelming majority of our humanity. Hence it is through its constitutional mandate that local government deals with poverty eradication directly, as in section 152 that relates to our developmental state.
Also, through the demarcation process we are aware that wards were aligned to a wall-to-wall situation that addresses the imbalances of the past through the Municipal Systems Act. On its definition of a municipality, communities have been included. The issue of community participation is legislated, and that also includes a commitment by local government to make sure that there is a consultative process through their integrated development plans. We also passed an Act that provincial and local government is responsible for property rates and it has a provision that allows for government not to charge those who are poor in terms of a threshold. Also, there is a provision in terms of the Disaster Management Act that allows for the participation of communities.
Let me also reflect on the role of women in local government. It is also undisputable that local government led by the ANC is leading in this area, through a 50-50 representation of women. Also, in terms of community participation, we have made legislative provision that would allow for ward committees to be in place and it is in this context where the role of women is clearly defined. We just have to appeal to our people, more so at this time when municipalities are busy with IDPs, to make sure that when planning is done, it reflects the needs of our women. We also have community development workers, most of whom, I am quite certain, are women.
Ndiza kuthi gqaba gqaba ngesiXhosa. USalga, njengokuba emele oomasipala, uthe emveni kokuba oomama benyuliwe wabeka inkqubo yokuba baqeqeshwe ukuze bakwazi ukuphatha. Ndiza kwenza isicelo kubantu bakuthi, phaya emakhaya, ngokubhekisele ekumiselweni kwee-IDPs.
Njengoko iinkosi bezikhala ekuseni zisithi azibizwa ngoomasipala, siye sazixelela ukuba isemthemthweni into yokuba zithathe inxaxheba kule nkqubo. Kwakhona, simema abantu bakuthi ukuba xa kukho iimbizo mabazizimase, ukuze bakwazi ukuzithethelela besebenzisa iilwiimi zabo.
Liphindile kwakhona iSebe looRhulumente bamaPhondo nabaseKhaya, waba nelinge lokudibanisa okanye i-Project Consolidate kwabo masipala bangenamandla, apho lithe laathumela ezona ziqeqeshiweyo iinjineli ukuba zincedisane noomasipala ukuphucula inkqubo yokuziswa kweenkonzo ebantwini.
Sineendawo ke, njengokuba ndivela eRhawutini, ezifana ne-Alexander, i- Bekkersdal ne-Everton, apho kukho amaphulo ovuselelo ngokutsha lwemimandla yeedolophu. Siyazazi iingxaki ezilapho. Ezinye zazo zezokuba ngandlela ithile oomama abavunyelwanga ukuthatha inxaxheba. Masibakhuthaze ke ukuba benze, bangeva ngakuxelelwa. Banalo ilungelo, ngoba lo rhulumente uvotelwe ngabo.
Kwakhona masamkele into yokuba iNkqubo yeMisebenzi yoLuntu eNatyisiweyo inayo indlela enyanzelisa ukuba amashishini asakhasayo abandakanye abantu basetyhini. Masikhumbule, kwakhona, ukuba njengokuba sasingabasebenzi ngaphambili, phaya emboneni bekusenzeka ukuba oomama ibe ngabo abamkela imali encinci, kwaye bangaqeqeshwa. Kodwa ngenxa yalo mbutho kaKhongolozi namhlanje banelungelo lokuba balinganiswe nabanye abantu.
Okokugqibela, ndiza kuthetha njengelungu le-ANC, nditsho ukuba kukho iingqungquthela zophuhliso loqoqosho lweengingqi kwizithili zethu. Siza kuphinda futhi sicele abantu bakuthi ukuba njengokuba beza kuthetha ngeendlela zokulwa indlala nje, maze benze ukuba noomama babe khona, ukuze livakale nelabo ilizwi.
Masiphinde kwakhona siqinisekise ukuba kuzo zonke izinto esizenzayo, ingakumbi ekuphuculeni ubomi boomama, nanjengokuba sisazi ukuba ngabo abenza ukuba kube kho into etafileni, oomama mabathathe inxaxheba.
Ndiza kuthi ke ngoku kule ngxoxo-mpikiswano, kula malungu ahlala ephikisana ne-ANC, ukuba nanku umkhomba-ndlela. Mawakwazi ke nawo ukuba bancedakale kweli linge lohlenga-hlengiso lweli lizwe ukuze akwazi ukuthatha inxaxheba. Siya kuphikisana sele siphucule iimpilo zabantu bakuthi. Ndiyabulela. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)
[I will briefly speak in isiXhosa. Salga, as an association of local government, made it feasible that after women were elected, a programme on developing their managerial skills was implemented. The communities must lend a hand with regard to the implementation of the IDP.
The traditional leaders complained in the morning that they were not invited by municipalities to participate in this programme, but we explained to them that their involvement is legal. Furthermore, we ask the communities to attend the izimbizo, so that they can express themselves, using their mother tongues.
Once more the Department of Provincial and Local Government initiated Project Consolidate for the municipalities that cannot work on their own. Trained engineers were dispatched to assist in the improvement of service delivery programmes.
There are areas in Johannesburg, where I come from, such as Alexander, Bekkerdal and Everton, where the programme of urban renewal is implemented. We understand that there are challenges, though. One of these is that women are not allowed to participate in these programmes. Let us inspire them, so that they can refuse to be told what to do. They have rights, because they voted for this government.
Let us accept that the Expanded Public Works Programme has a clause that mandates small businesses to include women. It must be remembered that during the times when we used to harvest maize in the field, women were earning little and they were not given skills. The ANC-led government made it possible for them to enjoy equal rights.
In conclusion, I will speak as a member of the ANC; there are regional conferences on economic development in our constituencies. We plead yet again with people that when discussing issues relating to poverty alleviation women must be included, so that their voices can be heard.
Let us ensure that in all we do, particularly the fact of improving women’s lives, we involve women, because they are the ones who place food on the table.
In this debate I am saying to those who always oppose the ANC that they must accept these guidelines. They must benefit in some way from the transformation outcomes taking place in this country in order to participate in it. We will engage in argument after we have improved the lives of people. Thank you. [Applause.]] Mr S J MASANGO: Chairperson and hon members, there is a simple solution to poverty in South Africa, and it goes like this: In order to fight poverty, people need jobs; in order to create jobs, we need an economy that is growing and a friendly business environment, which encourages entrepreneurship and investment. In order to create that environment, we need simple and effective legislation, and in order to create that legislation, we need strong and innovative leadership.
The reason unemployment is stuck at 40% and we have a problem with poverty in this country, is not because of a lack of resources, but because our leaders lack the political will to make the necessary changes.
Ukuzalisa kilokhu, abasebenzako baneenyonyana ezithi nazibakhulumelako nofana ezithi nazibalwelako, bese zikhohlwa ngalabo abangasebenziko abajama eentradeni njalo, bafuna umsebenzi. (Translation of isiNdebele paragraph follows.)
[To add to this, those who are employed have trade unions that represent them. These trade unions tend to forget about those who are unemployed, who always stand on street corners looking for jobs.]
The DA does not believe, however, that the state is there to simply nurture a person through life. A responsible state must be complemented by responsible citizens. The force behind growing prosperity is a socially and environmentally responsible enterprise economy, driven by the choices, risk and hard work of free individuals.
Without growth in prosperity created through the exercise of a market economy, there can be no opportunities, and choices become increasingly limited. That is why the DA promotes an economic policy that puts growth at its centre. While we promote such policies as low inflation, a minimal budget deficit, lower taxation, a deregulated labour market, privatisation, enterprise zones, opportunity vouchers and the like, there are those who object to some of these policies. But experience across the world has shown that they generate growth, and with growth come job opportunities.
In addition to the policies that promote growth, the DA promotes policies designed to provide the poorest of the poor and the least empowered with a safety net to ensure their survival and welfare. For this reason we support the provision of free essential services at a municipal level, such as a basic amount of water and electricity, and a basic income grant of R110 per month for those living below the poverty line. These are some of the tenets of an open-opportunity society, a society in which each person has the opportunity to make the most of his or her life.
The government needs to learn that it cannot shape people in its own mould. Its job is not to dictate to people their identities, but to actively seek to provide them with opportunities to make the right choices for themselves. Until this government learns that, we will not break the cycle of poverty and unemployment that currently grips our country. I thank you, Chairperson. [Applause.]
Dr U ROOPNARAIN: Hon Chairperson and hon members, today in South Africa a child will be born. Her mother will hold her, feed her, comfort her and care for her as any mother would anywhere in the world. In these most basic acts of human nature, humanity knows no divisions. But to be born a child in today’s Africa is to begin a life centuries away from prosperity. It is to live under conditions that many of us in this House would consider inhuman.
No one today is unaware of this divide between the rich and the poor of the world. No one today can claim ignorance of the cost that this divide imposes on the poor and dispossessed, who are no less deserving of human dignity, fundamental freedom, security, food and education than any of us.
The cost, however, is not borne by them alone. The cost is borne by all of us, rich and poor, men and women of all races and religions. Today’s real borders are not between nations, but between the powerful and the powerless, the free and the fettered, the privileged and the humiliated.
Scientists tell us that the world of nature is so small and interdependent that a butterfly flapping its wings in the Amazon rainforest can generate a violent storm on the other side of the earth. The principle is known as the butterfly effect. Today we realise perhaps more than ever that the world of human activity has its own butterfly effect for better or worse, hence the need to work together.
The IFP, as the champion of the poor, supports this debate. You would recall that I began my address with reference to the girl. Even though her mom will do all in her power to protect and sustain her, there is a one-in- four risk that she will never go to school, and that she will have to head her own household and take care of her siblings.
A few years ago at the United Nations Millennium Summit, world leaders recognised that global progress had been achieved in the struggle for human development, but they also identified impediments. These included HIV/Aids, and the conflict and poverty that still stand between humanity and the realisation of its freedom from want and fear.
Among those priorities, none was more important than the pledge they made to spare no effort to free our fellow men, women and children from abject and dehumanising conditions of extreme poverty. More especially, they resolved that by 2015 they would halve the proportion of the world’s people living in extreme poverty and hunger, achieve universal access to primary schooling and gender equality at all levels of education, reduce child mortality by two thirds and maternal mortality by three quarters, halt the spread of HIV/Aids, and reduce the incidence of other major diseases.
Currently, sub-Saharan Africa is home to just a quarter of the world’s very poor, but the ratio is rising steadily, aggravated by the scourge of HIV/Aids. Another challenge to meeting the target is how to measure poverty, which has dimensions other than simply average income. Growth is not a gain if it destroys the environment, fails to engage women, or drums families from secure but poor rural lives to a frightening, crime-ridden, marginal and city-slum existence.
To briefly take another look: there is also reversing Aids, malaria and tuberculosis, which together have accounted for 150 million deaths since
- Child poverty is the principal determinant of life chances. Children born into poverty are more likely to die prematurely. They are less likely to attend school or get any qualifications. The time to act is now, and we need to make sure that the Millennium Development Goals are attainable. But poverty is an old enemy with many faces. Defeating it will require the many actors to work together. It was the great Mahatma Gandhi who once said that poverty was the worst form of violence. Let us recognise that extreme poverty anywhere is a threat to human security everywhere. Let us recall that poverty is a denial of human rights, and let us summon the will to deal with it.
Let me end with the words of Mother Teresa, who said the following:
We think sometimes that poverty is only being hungry, naked and homeless. The poverty of being unwanted, unloved and uncared for is the greatest poverty. We must start in our own homes to remedy this kind of poverty.
I believe the title of the debate is so apt in that we need to work together, and the time to start is now. Thank you. [Applause.]
Mr G T MADIKIZA: Chair and hon members, the prevalence of poverty in our society continues to cast a shadow across the achievements made under democracy. It is not poverty alone that threatens societies, but rather the extreme inequalities and disparities between the poorest of the poor and the super rich. Deep mutual resentment and contempt are bred in societies by these extremes living within viewing distance of each other
Sadly, the growth of a new middle class and elite, even though it has given some black individuals wealth, has only exacerbated the vast gulf between the haves and the have-nots. It is unfortunately so that a certain culture of conspicuous consumption has become fashionable among the new elite.
The fact that an MEC can spend R100 000 on a government credit card for a single dinner with a small group of guests is just one example of that extravagant flaunting of new-found wealth and power. Is it any wonder that this culture of get rich quick and spend recklessly has created the conditions in society in which violent robbery is endemic, in which people are killed for as little as a cellphone, in which a schoolchild can stab to death a peer over borrowed money? Poverty presents less of a challenge than the arrogant disregard of the rich for the concerns and aspirations of the poor. I thank you. [Applause.]
Mr L W GREYLING: Chair, the ID agrees wholeheartedly with the sentiments expressed in the title of today’s debate: “Working together out of poverty”. As Patricia de Lille said in her response to the state of the nation speech earlier this year, the problems of the poor are the problems of the rich. What this country needs most is a shared sense of solidarity and compassion that cuts across the different divides in our country.
We need to institute a mass mobilisation campaign whose primary target is the eradication of poverty. Everyone in South Africa should have this as their goal, and the government must create the necessary mechanisms to enable people to get involved in this effort.
Much is often said about the lack of capacity within government, but the ID believes that this is more than made up for by the immense capacity communities and inspired individuals have to change their circumstances.
If government can’t spend its money, then give it to people who can. Civil society and community-based organisations that perform many of the state’s statutory obligations are crying out for more funds to reach more people. We need to give it to them.
We also need to remove obstacles to poverty alleviation like the means test on child support grants, and we need to extend the child support grant to all children under 18. Nine million children in South Africa live in poverty. We must do more to tackle child poverty and change the tragic fact that one in 10 children born in South Africa today will not live to see the World Cup. I thank you. [Applause.]
Mrs C DUDLEY: Chairperson, according to the World Health Organisation, even though there is enough food in the world to feed everyone, one person dies from starvation every 3,6 seconds.
The 2005 UN Human Development Report records that 5 million people in South Africa survive on less than R6 per day and that South Africa ranks 56th out of 103 in the world poverty rankings, with a human poverty index of 30,9% or 14,5 million people.
These are very real people and not just statistics, like the granny from Ngcobo in the Eastern Cape, where her meagre grant goes to community education needs while government fails to provide even the most basic services in that community. Provision of basic services should be a given.
Acknowledging the chronic poverty problem in South Africa is, however, a start, and recognising that working is key to changing the situation has us at least facing in the right direction together. Government’s five-year R400 billion public works programme follows through on this thought and is likely to succeed to some degree.
An amount of R400 billion could, for example, pay 7,8 million unemployed South Africans R855 per month for five years. But, of course, wages are not all that is budgeted for and a large percentage will be spent on capital assets.
Labour unions which represent the employed and not the unemployed are, unfortunately, not helping as they naturally continue to maximise benefits for their members, diminishing employment opportunities for the unemployed in the process. At the same time strained employer-employee labour relations further exacerbate the situation and escalate the move to a greater degree of automation in modern production methods, resulting in fewer jobs. Yes, we must work together.
Unless we are able to turn our employment problem around, the poverty trap will become more and more difficult to get out of, with the gap between the rich and the poor widening, the poor becoming isolated and demoralised, moral values changing daily and ethnic divisions increasing.
According to the UN Bulgarian Human Development Report, suicide, child abuse, domestic violence, broken homes and homelessness are typical of the more complicated and consequent social and economic problems in society. The bigger the unemployment problem is, and the longer it remains, the worse it is. We must work together. [Time expired.]
Ms M N S MANANA: Chairperson, hon members, the UN has declared 17 October to be the International Day for the Eradication of Poverty.
In 1995, at the World Summit in Copenhagen, South Africa joined the nations of the world and pledged to eradicate poverty. Since the dawn of our democracy, South Africa has emerged from hatred and bitter separation to a new democracy of reconstruction, reconciliation and development.
Poverty is the denial of opportunities and choices most basic to human development to lead a long, healthy, creative life and enjoy a decent standard of living, freedom, dignity, self-esteem and respect from other people.
Poverty is one of the greatest political, social and economic challenges of the 21st century that is facing the world at large. The most affected are the millions of women and children living in rural areas.
The International Day for the Eradication of Poverty focuses on poverty and the monitoring of the policies and programmes to tackle it. The government, led by the ANC, has implemented policies and programmes, such as the municipal infrastructure grant, the Working for Water programme, the free basic services, etc, to address the problems facing South Africa.
Whilst the 2005 state of the nation address highlighted targets to attain water and sanitation provision, the President, in his 2006 state of the nation address, located the issues within the intentions of Asgisa. The Accelerated and Shared Growth Initiative for South Africa identifies and implements a set of policy initiatives that will improve South African growth prospects. The President highlighted the following strategic objectives in his address that are relevant to Water Affairs: the public- private partnership capacity of local government and the eradication of the bucket system.
As regards the impact on Water Affairs, we all know that as from the 2005- 06 financial year, the capacity funds for the basic service have been allocated directly to municipalities under the municipal infrastructure grant. The Department of Water Affairs and Forestry will be responsible for ensuring compliance and ensuring that municipalities maintain their focus on ending sanitation backlogs.
As regards access to clean water, in 1994, 15,9 million people out of a population of 39,8 million did not have access to basic water supply. Currently, 3,3 million people out of a population of 48,6 million have no access to a basic level of water supply.
The free basic water programme is making a huge difference to the poor, who are defined as households with an income of less than R800 per month. Currently, 1 million people are receiving the free basic service via normal infrastructure, while 80% of the population with access to water infrastructure enjoy access to free basic water, which relates to 75% of the South African population and represents a 5% increase.
Mangikusho ukuthi amanzi abaluleke kakhulu. Yingakho kufanele ukuthi wonke umuntu abe namanzi ukuze akwazi ukuphila, futhi yingakho-ke siye sithi: Water is life. Nabahlala emaphandleni kufanele ukuthi bagcine bewatholile amanzi ukuze babone izimpilo ziba ngcono. (Translation of isiZulu paragraph follows.) [Let me also say that water is very important. It is for this very reason that all people should have water to live. That is why we say water is life. Even those who live in rural areas should get water, too, so that their lives can be better.]
The core business of the Working for Water programme is to contribute to the sustainable prevention and control of invasive alien plants. In doing so, it addresses poverty relief, and promotes economic empowerment and transformation within the public works framework.
Since the inception of the Working for Water programme in 1999, it has cleared more than 1 million hectares of invasive alien plants, providing jobs and training to approximately 25 016 people per annum from the marginalised sector of society, of which 52% are women.
Working for Water is currently running 303 projects in all nine provinces of South Africa. Short-term contract jobs were created through clearing activities and with an emphasis on recruiting 60% women, 20% youth, and 5% people with disabilities.
Regarding the eradication of the bucket system, out of a population of 48,6 million people, there are currently 15,3 million people with no access to sanitation. Since 1994, access to sanitation infrastructure in the sector has improved from 49% to 69% of the population. By 2007, the bucket system will be eliminated in all formal settlements in the country. There are 230 000 bucket toilets that need to be replaced with adequate sanitation.
I am happy to announce once more that the Mpumalanga Department of Local Government and Housing has completed the eradication of the bucket system in all its formal areas throughout the province.
The programme has also created more than 5 000 part-time jobs for the poor. The government is continuing to promote the eradication of the bucket system to replace it with dignified and appropriate types of sanitation services.
In conclusion, as people are stripped of their material and other possessions, part of their soul is lost in the process, leading many poor communities to sink further into poverty, characterised by crime, illiteracy, unemployment, diseases and often violence. That is why it is important for the ANC government to ensure that the masses of the people are well taken care of, in order to create a better life for all. Water is life and sanitation is dignity. Let us work together in order to eradicate poverty. I thank you. [Applause.]
Rre B E PULE: Ke a leboga, Mmusakgotla. Mo letsatsing le la gompieno la lefatshe lotlhe la bana, re tshwanetse go tsepamisa megopolo ya rona mo go tshwaraganeleng go ba direla isagwe. Seane sa motswana sa re; kgetsi ya tsie e kgonwa ka go tshwaraganelwa.
Kgwetlo e tona e re lebaneng le yona ke ya go fedisa leuba mo lefatsheng la rona le kontinente ya Aforika, ntswa re tshwanetse go tswaragana le lefatshe lotlhe tota. Dintwa tsa go lwela maemo di kgoreletsa kgolo ya moruo. Lebelela jaaka tlala e tsene kwa Zimbabwe ka ntlha ya go diiwa ke dintwa. Lebelela Repaboliki ya Congo jaaka le yona e batla go diiwa ke dintwa kgotsa re tloga re lebelela Aforika Borwa jaaka e batla go lwa e lwela gore Moporesidente e tla nna mang.
Ee, re tshwanetse go tshwenyega mme ga e a tshwanela gore e nne sone fela se se nnang mo megopolong ya rona. Re tshwanetse go lebelela gore setšhaba ka bophara se na le mathata a eng gore re tle re fedise leuba. Leuba le ka fedisiwa ka go tlhola ditiro, ka go rotloetsa bana go ithutela dithuto tsa seteginiki sa gompieno gore le bone batle ba kgone go itshedisa, ba fedise leuba.
Mafatshe a a humileng le ona a tshwaraganele leuba le rona go beeletsa mo lefatsheng la rona le le humanegileng. Mafatshe a a humanegileng le ona a sekaseke melao ya badiri gore e kgone go rokotsa kgatlhego go tswa mafatsheng a humileng gore batle ba tlhole ditiro.
Bana ba rona ke mpho ya botlhokwa e re e tsayang mo Modimong. A re ba direleng boswa ka go fedisa leuba. Mme re ka dira fela jalo fa re tshwaraganetse kgetsi ya tsie. Ke a leboga. (Translation of Setswana speech follows.)
[Mr B E PULE: Thank you, Madam Speaker. Today is International Children’s Day, we must focus on working together towards the future of our children. There is a Setswana proverb that says two hands are better than one.
The main challenge we are facing is to eradicate poverty in our country and on the African continent. However, we have to work together with the whole world. The fighting for positions affects the growing of the economy. Just take a look at Zimbabwe; there is a lot of poverty because of the ongoing wars. Or shall we say: Look at South Africa, they are about to fight for the position of who will be the next President.
Yes, we must be worried, though this is not supposed to be the only thing that worries us. We have to take a look at the problems of the whole nation in general in order for us to eradicate poverty. Poverty can only be eradicated by creating jobs, encouraging children to study today’s technologies in order for them to be able to fend for themselves.
The First World countries also work together with us in this fight as they are investing in our country. The Third World countries are examining the labour laws so that they can lure the interests from the First World countries so as to enable them to create jobs.
Our children are important gifts from God. Let us create a better future for them by ending this war. We can only do that by working together.]
Mr N T GODI: Chairperson, comrades and hon members, poverty in our country carries, by and large, the face of an African woman, is rural based and a reality to the African majority. It is a product of inequality created by years of settler colonial rule with its attendant criminal oppression and ruthless exploitation. We reject the trickle-down theory and we advocate, as a measure of ideological conviction, an active role for the state in the socioeconomic life of the people. Absolute poverty can be wiped out by ensuring that our social security net covers all vulnerable groups, which have up to now excluded the long-term retrenchees.
The state’s active role in the economy helps to ensure a fairer distribution of wealth, thus reducing relative poverty. Whilst the state has its role to play, so does private capital. We are not convinced that private capital is playing its role actively and satisfactorily, in terms of creating quality and sustainable jobs. Instead, poverty amongst the workers is rife due to starvation wages and permanent casualisation. The message must be sent that there is a growing realisation or appreciation that beyond the 1994 political settlement, white capital’s resistance to share the economic cake has not waned much. The continued African poverty is a blot on our democracy. Indeed, the miracle of 1994 in material terms happened for the rich. Making poverty history is a campaign; let us make it a reality. Thank you.
Mr G LEKGETHO: Chairperson, hon Members of Parliament, comrades and friends in our country, Africa and elsewhere, beloved members of Cosatu, SACP, Sanco and ANC, it gives me a great pleasure to address you on the theme Working Together out of Poverty. This is a deeply sad and emotional topic that continues to set many nations against one another, brothers against sisters and husband against wife. Poverty is the single greatest burden of South Africans and is the direct result of the apartheid system and the grossly skewed nature of business and industrial development that accompanies it.
Poverty affects millions of people, the majority of whom live in rural areas and are women. It is against this background that Cosatu, SACP, Sanco, ANC and other progressive liberation movements were formed to better the lives of others. Many of our comrades in our country and elsewhere had to die because of destitution and hunger. Many in our midst are still unemployed without bread to eat. Many of our sisters are on street corners to sell their bodies because of poverty. This poverty is man-made and can be undone in the same way through persuasion to release the land. This will lessen crime in our country. Peace and comfort will prevail and we shall all be happy.
In celebrating October, Month of Heritage and dealing with the apartheid past without pointing fingers, let those who immensely benefited from the skewed distribution of wealth in the past, transfer the land for free to the poor so that they can be acknowledged and recorded for their noble contribution to transformation and the eradication of poverty.
The Department of Arts and Culture plays an important role in alleviating poverty in our country. The department has the Investing in Culture Programme aimed at ensuring realisation of sustainable empowerment opportunities through training and job creation in the arts, culture and heritage sectors.
The department is striving for the development of capital by allocating resources to ensure a return on investment that will fulfil its key objectives and broader government imperatives. Between April 2005 and March 2006, 1 612 job opportunities were afforded to beneficiaries, of whom 68% are women, 43% are youths and 8,2% are disabled people.
In the North West province, the department, in conjunction with Barolong boo rraTshidi, the Department of Economic Development and Tourism, the North West Parks and Tourism Board and the two municipalities of Mafikeng, is busy building the cultural heritage recreation facility at Letlamoreng dam. There will be temporary jobs that will be created until the facility is completed and more than 20 people will get permanent employment. There is additional funding needed to build the chalets and the department has requested us to assist in this regard.
A resource for the promotion and production of arts and culture is being made available and accessible to all. The democratic arts councils are being established in each region. Arts and culture form part of school and all other educational curricula. We need to develop the skills and talents of our people. We need more libraries. We need more museums, galleries, monuments and historical sites, which will reflect our different cultures and be accessible to communities to generate funds for our poor. We also need to mobilise our people to take charge of their own destinies.
Motswana a re mokoduo go tsoswa o o itsosang. [There is a Setswana saying that God helps those who help themselves.]
The Freedom Charter and the RDP documents are focused on our people’s most immediate needs and rely, in turn, on their energies to drive the process of meeting their needs; regardless of race or sex, rural or urban, rich or poor, the people of South Africa must together shape their own future.
Development is not about delivery of goods to a passive citizenry, but about involvement and growing empowerment. In taking this approach we will be building on many structures and negotiation to ensure that our people are involved throughout the land. This programme is people-driven and is critical to alleviating poverty in our midst. Thank you. [Applause.]
Mr R B BHOOLA: Chairperson, I was asked what do we do on International Poverty Day, and I replied:
We unite. We unite against all the elements that house poverty, against all the elements that retard our progress, and we unite to set our people free from the shackles of poverty.
Last week we debated the spirit of ubuntu and this week the MF reaffirms our belief in the Zulu proverb, “umuntu ngumuntu ngabantu”, meaning, “people are people through other people.” The MF strongly believes that unity and the principles of ubuntu are the key to poverty alleviation, social development and an effective democracy.
A duty is incumbent upon government, all citizens and the public and private sectors to induce efforts that will create opportunity for the destitute and deliver us from poverty. But to work together we need to have a common vision, and that vision is for a strong, healthy and wealthy South Africa, where its entire people share in its fruits and all strive for its good.
The MF supports the principle that the road to poverty alleviation is through working together. I thank you.
Ms H WEBER: Chairperson and hon members, when I heard there was a debate on poverty alleviation I went out of my way to see poverty-stricken areas to find out what was being done. On speaking to the people, I found that they were not impressed and said the better life for all was a dream and poverty was just getting worse.
Every Ministry must take responsibility for the lack of alleviation of poverty – the Department of Home Affairs for not supplying ID books timeously so people can apply for jobs and grants, and the Department of Labour for not levelling the playing fields and encouraging job creation. The Minister would do well not to make job creators his enemies, but his attention should rather be focused on the ineffective Setas, which cost a lot and are not up to expectation.
Winning the bid for the 2010 World Soccer Tournament was welcomed by all as a means to poverty alleviation, but the statement by the chairperson of the organising committee, Franz Beckenbauer, that organisers are working against one another rather than with one another should be taken note of. It is time the relevant role-players changed their mindset of, “What is in it for me?” to rather, “What is in it for South Africa?”
The Minister for Agriculture and Land Affairs must start reviewing her strategy. I was personally involved in two projects in the Groblersdal area.
The Hereford irrigation farmers, who successfully restored an irrigation scheme about eight years ago, are keen farmers. The promises by the then hon Minister Hanekom on a visit some six years ago never led to them getting security of tenure, as he had promised. They are about to lose a R7 million project because they have no collateral.
The Sedi Trust, on the other hand, was given a very successful farming project five years ago. This farm is now fallow and has not produced anything for two and a half years. They have security of tenure, but no knowledge of farming, and seemingly no interest. They prefer to let the buildings as an easy, but minimal source of income.
The Minister for Provincial and Local Government should look at ineffective municipalities. There are many jobs to be done, but without capable people to organise and plan there will be no delivery and no jobs. We do a lot of talking about equal rights. There are no equal rights when everything depends on who you know and not what you know.
We can only hope that with the Deputy President behind Asgisa, there will be some alleviation of poverty. South Africa cannot afford any more experiments and we cannot afford to let projects such as 2010 slip through our fingers. Social engineering has not worked anywhere in the world and I don’t think it has a chance of working here. I thank you. [Applause.]
Mr L J MODISENYANE: Chairperson, I thank the ANC for giving me this opportunity to participate in this debate on poverty, which has particularly been my experience as a youth in South Africa. [Interjections.] I lived in poverty in my youth and I’m very thankful, despite this lot sounding off on my left.
I want to believe that poverty is a worldwide problem. Indeed, there is therefore no need to moan about it. Instead, we have to combat it. The purpose is not to alleviate it, but to eradicate it. By the look of things it is a dream that cannot come true in light of the status quo. It is a daily experience to see people who have built shelters under bridges and others who have built fragile shelters on pavements, especially here when you walk around the urban areas of Cape Town.
We seem to stand by and look on helplessly, but this is because of the magnitude of the problem. We must therefore answer the following question: What is the world doing about it and what is South Africa doing about it?
The world, through the United Nations’ Habitat programme, has pledged that nobody should be without a roof over his or her head. Housing as a shelter is not meant for the rich only, but for the poor as well. The Global Forum of Parliamentarians on Habitat is meeting on a yearly basis to resolve this worldwide problem of housing. According to the World Bank study on poverty, people flock to cities and cause congestion that aggravates poverty. The answer is to develop rural areas to diminish the flocking to the cities.
Leano la tsa Matlo le supa hore, matlo a bafutsana le a basebetsi a tshwanela ho ba haufi le dibaka tsa mosebetsi. Ho na le bo-Mmasepala ba phethahatsang leano lena. Mane ho la Foreisetata, metsana e kang bo- Ngoathe, bo-Matlwangtlwang, le boMmamahabane, kaho ya matlo e atameditswe haholo mesebetsing, le ha di-indasteri di eso ka di ba teng metseng eo ha jwale.
Moralo ona o supa maikemisetso a ho bontsha hore Afrika Borwa ke naha ya bohle ba dulang ho yona, ba batsho le ba basweu, ho ya ka lengolo la tokoloho. (Translation of Sesotho paragraphs follows.) [The strategy on housing shows that the poor and the working masses should be housed near their places of employment. Already there are municipalities who are implementing this plan. In the Free State, in small towns such as Ngoathe, Matlwangtlwang and Mmamahabane, housing has been developed near places of employment, even though industrialisation has not yet started.
This strategy indicates the intention to show that South Africa is a place for all who live in it, both black and white, as outlined in the Freedom Charter.]
As ons oor die hele wêreld kyk, dan sien ons dat armoede geen kleur ken nie. Baie mense is maar brandarm, ongeag hulle kleur. Ons moet dus saamwerk om armoede te bekamp. Die ANC het genoeg programme om armoede te bekamp, maar ons moet saamstem dat onbekwaamheid ’n groot rol speel om dienslewering te vertraag. Dis waarom Asgisa die antwoord is.
Die President het onderneem om sommige bekwame amptenare weer aan te stel, soos die VF Plus versoek het. Ons weet dit sal nooit genoeg wees nie. Almal sal saamstem dat swartmense ook opgelei moet word om regstellende optrede te bewerkstellig. Dit moenie beskou word as diskriminasie, soos sommiges dink nie. Ons kan nie die onregverdigheid van die vorige bedeling teenoor swartmense verontagsaam nie. Dit is die waarheid en dit moet definitief seëvier. (Translation of Afrikaans paragraphs follows.)
[If we look all over the world, we see that poverty knows no colour. Many people are indeed very poor, irrespective of colour. We therefore have to work together to combat poverty. The ANC has ample programmes in place to combat poverty, but we should agree that incompetence plays a major role in retarding service delivery. That is why Asgisa is the answer.
The President has undertaken to reappoint some competent officials, as requested by the FF Plus. We know that it will never be sufficient. We will all agree that Blacks should also be trained to effect affirmative action. It should not be regarded as discrimination, as some people think. We cannot ignore the injustices of the previous regime towards black people. That is the truth and it must definitely reign supreme.]
Ha ke tadima bahlomphehi ka ho le letshehadi ka mona, ke fumana hore ba a lla, ebile sello sa bona se thiba letsatsi, empa mme Weber ke yena ya batlileng a bua, hobane o bua ka tsela ya mokgatlo wa hae hantle.
Ke ne ke maketse ha ntate Masango a eme mona, a bua ntho e kareng e na le kelello, empa ba hlaha nqa e le nngwe. Jwale mme Weber o bontshitse hore seo a se bonang ke lefifi feela la bo-nka-ntjana ka hare ho naha ena ya Afrika Borwa, ha ho letho leo a le boneng le letle le entsweng. Ha a bone matlo a ahetsweng mafutsana, ha a bone mesebetsi e ntseng e etswa, ha a bone letho, le hore dintho di fetohile ka hare ho naha ena, hobane o tsamaya moo a ratang teng hobane o re o tsamaya bofutsaneng.
Jwale rona bafutsana re tseba hore mme Weber ha a soka a matha ka mochupu wa metsi ha ntlo ya hae e nela. Ha a soka a matha ka sekotlolo sa ho hlapela ntlo ya hae e nela. Haesale a robala dikobong tse majabajaba tseo a sa tsebeng le ho itlhatswetsa tsona, tse hlatsuwang ke motho e mong. Jwale ke kahoo a tla tla bua mona ka bofutsana boo a sa bo tsebeng, boo a sokang a bo phela le ho bo phela.
Ho bontsha feela hore o mpa a lelekisa letsetse ka terene ha a nahana hore bafutsana ba tla mo sala morao. Ba a tseba hore hohang ha ho na sebaka sa bona pelong ya hae. Le hona jwale o ntse a itshupa ka ho bua mona. O tlameletsa ntate Hanekom ka leano la hae leo a neng a tshwanetse hore o le sebedisitse, jwalo ka ha batho ba mo tshehetsang haholo e le barui. (Translation of Sesotho paragraphs follows.)
[Therefore when I look at the hon members on my left, I see that they are in a grievous mood, and yet Mrs Weber is the one who chooses to speak because she sounds like a typical member of her party. I was really surprised when Mr Masango stood up here, saying something that nearly made sense, and yet they belong to the same party. Therefore, Mrs Weber has shown us that what she sees in South Africa is darkness only, she does not see anything good or positive that has been done. She does not see the houses which have been built for the poor, nor the fact that things have changed in this country, because she goes to some places which she believes to be poverty-stricken areas.
However, we, the poor, know that Mrs Weber has never run around with a bucket of water when her house is leaking during the rain. She has never run around with a small basin when her house takes in water. She has always slept under expensive blankets which she doesn’t even know how to wash, which are washed for her by someone else. And yet she comes here and talks about poverty which she knows nothing about and has never experienced at all.
What it shows is that she is attempting the impossible if she thinks that the poor will buy her story. They know very well that she does not have their interests at heart. Even now she is busy railing, putting the blame on Mr Hanekom for the strategy which she was supposed to implement as a result of the support that she enjoys from the rich.]
Ja, die mense wat haar steun, is die ryk mense. Nou begin sy haar party ontwrig deur na die mense te hardloop wat niks van haar dink nie. Dit is die probleem. Aan die “Minister van Travelgate” wil ek sê: Dit is jou storie oor Travelgate, en jy sal dit ook een van die warm dae eet en sluk! Baie dankie. [Applous.] (Translation of Afrikaans paragraph follows.)
[Yes, those supporting her are the rich. Now she is starting to disrupt her party by running to the people who have no regard for her. That is the problem! To the “Minister of Travelgate”, I wish to state that it is your version of Travelgate and that one of these hot days you will also have to eat and swallow it! Thank you. [Applause.]]
Debate concluded.
TRANSNET PENSION FUND AMENDMENT BILL
(First Reading debate)
The ACTING SPEAKER (Mr G Q M Doidge): I wish to remind members that in terms of the guidelines adopted by this House on 12 September 2006, the member in charge of a Bill will be allocated 15 minutes to make an introductory speech and to reply to the debate, while other members may speak for no longer than three minutes each. There is no speakers’ list for First Reading debates. After the introductory speech, members who wish to participate in the debate must press the “To Talk” Button from their allocated seats and, when recognised by the presiding officer, may speak from the floor microphones.
I now call upon the Minister of Public Enterprises to make an introductory speech on the Bill.
The MINISTER FOR PUBLIC ENTERPRISES: Chairperson, it’s a pleasure to be breaking new ground on two fronts: this is my first Bill as Minister of Public Enterprises and in this exciting new format.
Let me give you some background quickly. Prior to 1990, Transnet had the Railways and Harbours Pension Fund for black employees, and the Railways and Harbours Superannuation Fund for white employees.
In 1990, these two funds were merged into the Transnet Pension Fund which was established under the Transnet Pension Fund Act of 1990. All Transnet employees were then obliged to become members of the Transnet Pension Fund.
The Transnet Pension Fund is a defined benefit fund which means that Transnet guarantees upfront the amount of the pension benefit that an employee will receive on retirement.
In 2002, new funds were established and the Act was amended to accommodate these new funds. The new funds were the Transnet Second Defined Benefit Fund, a fund for Transnet pensioners, and also a Defined Benefit Fund. No new pensioners were allowed to join this fund after 2000. Only those pensioners who were existing members at the time of the fund’s establishment were allowed to remain members. Thus this fund is also known as a closed fund, precisely because it is closed to new members.
The second new fund, the Transnet Retirement Fund, was an innovation in the sense that it was a defined contribution fund that was opened to all new Transnet employees to join at that time. A defined contribution Fund means that the amount of the pension benefit that the employee receives on retirement will depend on the contributions made by the employee, the employer and the income of investments made from these contributions.
Upon the establishment of these two new funds in 2000, we now had three funds, the Transnet Pension Fund and the two new ones. Most employees voluntarily transferred from the Transnet Pension Fund to the Transnet Retirement Fund. Presently, the Transnet Pension Fund has approximately 10 000 members, and its members consist of all pensioners who did not transfer to the Transnet Retirement Fund.
No new members have been allowed to join the Transnet Pension Fund since
- Members may also be aware that Transnet is in the process of restructuring from a transport conglomerate to a more focused freight company. Its core business is ports, rail freight and pipelines.
As part of this restructuring, we have been disposing of certain businesses that are not core to the freight business. Such disposals include, for example, the transfer of Transnet shares and SAA to government, and the transfer of Metrorail to the SA Rail Commuter Corporation, the SARCC.
It will be appreciated that as part of the transfer of businesses specifically, employees working in the transferring businesses would be transferred along with the business. Essentially, the transferred workers would no longer be employed by Transnet, but in various cases, by the SARCC as in the case of Metrorail.
As the new employer, the SARCC would provide the new workers with new employment conditions and benefits including membership of new pension funds. Thus the membership in the Transnet Funds will terminate along with the transfer. However, the peculiarity of the Transnet Fund is that all three were established by statute. In terms of the Income Tax Act, certain pension funds are established by statute and these are known as paragraph A funds. They have some benefits that allow the lump sum benefits of those members not to be taxed when the member leaves employment.
This protection however applies only to benefits attributable to membership prior to 1 March 1998. Thus the portion of a member‘s benefit relating to the employment before that date may not be taxable.
Thus, if a new employers pension fund is not a paragraph A fund as defined in the Income Tax Act, then the employees tax benefit for membership obtained prior to March 1998 vests when they leave the employment.
The Income Tax Act contains a formula for calculating such lump sum benefits and the vesting of such benefits. Now the effect of Transnet restructuring therefore meant that the employees transferring to entities such as the SARCC, which does not have a pension fund established by statute and may not be defined as a paragraph A fund, could lose the income tax protection afforded to them under the Transnet funds.
Therefore, in April 2006, Transnet, the trade unions and I agreed that the pension benefits of existing members of the Transnet funds would remain the same notwithstanding the disposal of certain Transnet businesses. Under the agreement, employees transferring to state-owned enterprises buying Transnet businesses and shares would continue to be members of the Transnet Retirement Fund.
The Transnet Pension Fund will be restructured into a multiemployer fund to allow continued membership of those defined employees. Thus the membership of those employees transferring to other employers such as the SARCC would retain their membership of the Transnet funds in order to receive continued income tax protection of their pension benefits.
The reason for introducing this Bill before Parliament is to effect the agreement reached between Transnet, the trade unions and myself. The draft amendments of the Bill have been approved by Transnet, the trustees of the three Transnet funds and Cabinet, and are published in the Government Gazette, 29303 of 12 October 2006.
The agreement essentially says the following:
That the Transnet Pension Fund remains a closed defined benefit fund, and is restructured into a multiemployer fund. The Transnet Retirement Fund remains a defined contribution fund and allows existing members to retain their fund membership even after the transfer of the business to a new SOE employer. I should stress that this is if it is to another state enterprise, not if the transfer is into the private sector.
The Transnet Second Defined Benefit Fund remains a closed defined benefit fund and is largely unchanged. There are some technical amendments. The Transnet Pension Fund is renamed the Transport Pension Fund, and although it is an independent multiemployer fund, it remains one legal entity.
The SOE of whom Transnet businesses have disposed may join as principal employers, and that’s essentially the SARCC, SAA and, under the structure, there is one subfund per principal, and some funds automatically consist of active members.
The allocation of pensioners and dependants of pensioners as fund members is determined in the sale agreements relating to the Transnet businesses. The relevant liabilities, assets, rights and obligations allocated to the subfund are determined by the trustees and the fund evaluators and actuaries. Subfunds have clearly defined ring-fenced liabilities and assets and each principal employer alone guarantees his own subfund.
This new Transport Pension Fund will have two sets of rules - the general rules and the specific rules for the subfunds. There will also be two levels of trustees, one for the Transport Pension Fund and sub-boards for the subfunds. The retirement fund will not be a multiemployer fund. This had been a bit of an issue but we feel that it will be essential to maintain clarity and raise no false expectations so the fund remains a Transnet fund.
The Bill proposes provisions that will allow existing members who are employees of businesses sold to certain SOE and entities transferred to government to remain members even after transfer. No new employees of these SOEs or other entities may join the Transnet Retirement Fund.
The result the Bill seeks to achieve is to maintain the benefits and tax treatment available to existing fund members and, on disposal, to allow the new employer to guarantee the defined exposure of employees opting to remain in the Transnet Pension Fund.
The amendments in the Bill seek to limit the impact of Transnet’s restructuring of worker benefits and legitimise the continued membership of the Transnet Pension Fund and the Transnet Retirement Fund via SOE employees.
I would like to thank the portfolio committee for the hard work it has done under the chairpersonship of Peter Hendrickse, for this and for the inputs made by the trade union movement. I sincerely hope we will receive support for this Bill as it goes forward. Thank you. [Applause.]
Mr P A C HENDRICKSE: Chairperson, it’s obvious from the enthusiasm with which members have been following the explanation of the Minister that he has given us a very clear picture of this amendment.
All that remains for me is to emphasise that this product is an agreement between the unions, management and government. Its primary purpose is to protect the benefits of workers particularly that of the tax-free amounts accrued before 1990.
Having said that, this doesn’t make Parliament a rubber stamp for the agreement, and we are applying our minds and examining each part of this agreement.
The committee has held a public hearing at which the following unions were present: the SA Transport and Allied Workers Union, the United Transport and Allied Trade Union, Aviation Union of South Africa, SA Pilots Association and the SA Railways and Harbours Union.
The Transnet Pension Fund as well as the Transnet management also participated in these hearings. All of these unions supported the legislation although some had reservations about the prohibition of new employees who were not working for Transnet to join the Transnet Retirement Fund, and that this prohibition has been placed in an Act rather than in the Rules. The committee has been engaging the stakeholders regarding this issue.
Another issue of concern to the committee was also whether, when an employee commits fraud, that money should be retrieved from that employee’s pension fund. We are not convinced that this is a correct measure or way of going about it.
Over and above this, we have also received a number of written submissions from individual pensioners as well as from organisations with regard to the Second Defined Transnet Pension Benefit Fund. Now, although this Bill does not deal with that particular fund, the committee has decided that we are going to respond to the issues raised in those submissions.
We heard from the SA Organisation of Retired Persons, the Silver Springbok Association, Club 60 and the Venda Party. The Act at the moment provides that these pensioners can receive an annual increase of 2%. They have been pleading poverty. As you know, inflation has been above 2% for the last few years. It has also been shown that some of these pensioners are receiving a pension of below SOP, that is, the State Old-Age Pension. There are approximately 80 000 pensioners altogether in the Transnet Second Defined Pension Fund.
In conclusion, I would also like to make use of this opportunity to congratulate the Pension Funds Adjudicator, Mr Vuyani Ngalwana, for his activist approach to his task. He has been like a breath of fresh air in a very staid and conservative environment. His decisions always seem to come down on the side of the underdog when they take on the all-powerful and mammoth life assurance industry.
I hope that newspaper reports that he is considering stepping down at the end of his contract are not true. [Time expired.] [Applause.]
Mr J J M STEPHENS: Chairperson, this Bill is an important one because it affects the lives of thousands of Transnet workers and pensioners, whose membership of the Transnet Pension Fund is their sole lifeline in their old age and in times of disability. It is thus no wonder that when the selling off of noncore assets out of Transnet was announced, employees were extremely concerned about their vested pension fund rights and hence an extended strike until those concerns were addressed in an agreement with management. The Bill then results from and gives effect to that agreement.
However, it is not only current employees of Transnet and its subsidiaries that are concerned about their vested pension fund rights. The thousands of existing pensioners are equally concerned and thus the evidence before the committee. Perhaps they are even more concerned because they already rely on their vested rights in the fund for their survival. Thus it is not surprising that they find any structural change threatening. Consequently, it is only right that in this debate we dispel also the misgivings and fears of existing pensioners regarding the possible effect of the fund’s restructuring.
Upon analysis of the Bill, pensioners can rest assured that their rights, benefits and risks are not affected either for bad or, regrettably, for better. Indeed, the guiding principle of the Bill is to allow the selling off of Transnet’s noncore assets without affecting members’ vested rights or future benefits.
We fully realise that this does not address the present issue many pensioners have regarding the paucity of their annual pension increases, but that is not the subject matter of, nor is it influenced by, this Bill. Those issues will be dealt with separately and substantively in this House in the near future. Although there are some wording changes to be discussed and probably made and some details to be clarified, the outcome will not be materially altered. On those premises, the DA supports the first reading of the Bill. I thank you.
Mr J P CRONIN: Chairperson, this Transnet Pension Fund Amendment Bill is obviously part of the broader restructuring of Transnet. I am pleased to say that the word “restructuring” is no longer, if it ever was, a fig-leaf word to cover up the p-word: privatisation. We are talking here about restructuring Transnet essentially to develop well-focused state-owned enterprises and public utilities and, in particular, to separate out the key freight logistics function from the airline - the national carrier: SA Airways - and the commuter-rail functions.
In parenthesis, Minister Erwin, while we have you here on this topic, I think we must be careful in this restructuring that we don’t allow the critical areas in which there is an interface between commuting or passenger-rail services and freight logistics to slip between the cracks. I am thinking in particular of rural branch lines or Southern African trade routes, which often involve rail passengers and also people carrying goods. I think we must make sure that we don’t allow that critical dimension to slip.
On the issue in front of us: the merger in December last year of the SA Rail Commuter Corporation and Metrorail put an end to what, I think, was an anomalous institutional arrangement. We had the Rail Commuter Corporation falling under the Department of Transport, acting essentially as a money conduit for the operating subsidy - some R2 billion to R3 billion a year - which went to Metrorail. Metrorail was then answerable not to the Department of Transport but to the Transnet board and, in turn, to the Department of Public Enterprises.
This institutional arrangement was a legacy, I think, of the late 1990s when we were getting ready to concession out chunks of the commuter-rail system. Unfortunately, in doing that we lost time. Fortunately for us others went ahead of us - in New Zealand, in Argentina and in the United Kingdom they went ahead with concessioning out passenger-rail services. That has been an unmitigated disaster in those countries; they are trying to reverse some of the problems. Luckily, we didn’t go that far.
Obviously, a key complication with this merger, which went ahead in December, has been the vested pension rights of Metrorail employees as they’ve come over to the Rail Commuter Corporation. We would really like to welcome the innovative and consultative way in which this was done and the equitable, I think, proposals in front of us in terms of the amendment to the Transnet Pension Fund. As we proceed, we also need to bear in mind that Shosholoza Meyl employees, currently under Transnet, will be also coming across to the Rail Commuter Corporation in due course. We need to make sure that they are adequately consulted and that their concerns are provided for. Thank you, Chair.
Prof E S CHANG: Chairperson, Minister and hon members, the Transnet Pension Fund Amendment Bill is a direct result of the restructuring process at Transnet, in particular the strategic disposal of noncore assets to refocus Transnet into a rail transport and infrastructure company that can deliver in terms of South Africa’s growing transport needs in an expanding economy.
After the announcement that SA Airways, Metrorail and the Shosholoza Meyl would be removed from the Transnet stable, it understandably led to concerns among affected employees about their conditions of employment and benefits after the disposal process.
Although conditions of employment in the case of sale or transfer of a business are covered by the Labour Relations Act, the labour unions, Transnet management and the Minister for Public Enterprises agreed after negotiations that a special amendment to the principal Act was necessary to ensure that the disposal process had as little effect on the retirement savings of employees as possible without compromising the overall Transnet restructuring process. The Bill therefore provides that transferring employees and pensioners can retain membership in existing Transnet pension and retirement funds.
Very importantly, the Bill retains the status of the Transnet pension funds as paragraph A funds in terms of the 1956 Pension Funds Act, meaning that when a member leaves employment he or she is entitled to have his or her lump sum benefits taxed on the basis that that portion attributable to membership prior to 1 March 1998 will not be subject to tax. We welcome this protection given to the retirement savings of qualifying members.
Two other provisions deserve mention. First, the Bill provides that pensions may in future be attached not just in terms of the Divorce Act, but also the Maintenance Act of 1998. The IFP supports this as it is yet another victory for women and children. Second, the Bill will come into effect retrospectively on 11 November 2005, the date of Transnet’s restructuring. The IFP has been assured that all stakeholders agreed to this unusual step, and we therefore support it.
The IFP is satisfied that the Bill is the result of inclusive negotiations between the relevant stakeholders and that it is in the best interests of Transnet employees and pensioners. We will therefore support the Bill. Thank you. Ms O R KASIENYANE: Thank you, Madam Chair. This Bill represents the spirit through which our labour policies take into consideration the role that the trade unions, employers and the state play in shaping our legislation. It gives workers a key say in industry decision-making and ensuring that unions are fully involved in designing and overseeing changes in the workplace and at industry levels. Even when drafting the Reconstruction and Development Programme, this fact was clear already - that the agreement negotiated through collective bargaining should be extended through legislation to all workplaces in the industry.
In order to pursue our goal of eradicating poverty, our people should have savings and pensions to provide for their old age and retirement. This Bill represents another occasion where workers were instrumental in shaping their own future. Considering all these facts, this Bill will secure transferred employees’ retirement savings and, as is the case with any form of restructuring, the human element should always come first, in order to make sure that all have a share in the country’s wealth.
Looking at pension funds in general, during the apartheid regime, our people never had access to or enjoyed this opportunity. You look at white people and nonwhite people and notice that the pension dispensation was really not in favour of our people. When talking about this, it is really clear that the ANC-led government has done a lot in alleviating poverty by having this Bill. The ANC supports the Bill. Thank you. Mnr W D SPIES: Voorsitter, hierdie wet maak voorsiening vir die behoud van lidmaatskap van pensioenfondse, veral wanneer werknemers as gevolg van herstrukturerings oorgeplaas word. Dit handel, met wysigings, oor die Transnet-pensioenbedeling en is die gevolg van ’n proses van oorlegpleging tussen Transnet, sy pensioenfondse en die vakbonde. Maar ek wil nie praat namens die pensioenfondse of die vakbonde wat goed verteenwoordig was in die proses om die wysigingswet tot in sy huidige vorm te kry nie.
Ek wil praat namens een van die mees kwesbare belangegroepe in die Transnet- pensioensage en dit is die bejaardes wat lid is van die tweede vastevoordeelpensioenfonds. Hulle het geen bedingingsmag nie. Hulle kan nie staak nie, want hulle is nie veronderstel om te werk nie. Hulle behoort met waardigheid hul oudag te geniet en te rus van die dekadelange onbaatsugtige diens aan Suid-Afrika. Hierdie mense het meestal voor 1990 afgetree en is nou almal reeds diep in die sewentig of ouer. Meeste is verswak.
Gister het ek ’n oproep van ’n mev Esterhuizen ontvang. Sy het my meegedeel dat sy namens haar vader skakel. Hy het ’n beroerte gehad en kan nie meer sien nie, maar hy wil weet of ons kan help om sy karige Transnetpensioen te laat aanpas. Weens swak bestuur het hierdie pensioentrekkers nie gedeel in die ongekende groei van die markte die afgelope drie jaar nie. Hulle pensioen het nou reeds drie jaar na mekaar met slegs die statutêre minimum van 2% verhoog. Baie van hulle kry ’n maandelikse pensioen wat laer is as die standaard staatspensioen vir bejaardes.
Hierdie Huis het ’n verantwoordelikheid teenoor die mees kwesbares in die gemeenskap. Sekere sake kan nie net aan die markte oorgelaat word om op te los nie. Ons word hier gekonfronteer met ’n konsepwet wat die resultaat is van onderhandelinge tussen amptenare en vakbonde. Die Parlement hoef nie maar net ’n rubberstempel te wees van ’n konsepwet wat swyg oor die lot van weerloses in die samelewing nie. Die VF Plus wil vra dat hierdie wysigingswet aangepas word, om ook voorsiening te maak vir ’n verhoging van die statutêre minimumaanpassing van 2%. Die verkoop van die Kaapse Waterfront sal hopelik die finansiële krisis van die vastevoordeelfonds verlig. Ons kan hier seker maak dat Transnet wel doen wat nodig is om ook die swaarkry van sy afgetredenes te verlig. Baie dankie. (Translation of Afrikaans speech follows.)
[Mr W D SPIES: Chairperson, this Act makes provision for the preservation of membership of pension funds, especially when employees are transferred as a result of restructuring. It deals, along with amendments, with the Transnet pension allocation and is the result of a consultation process between Transnet, its pension funds and the unions. But I do not want to speak on behalf of pension funds or the unions that were well represented in the process to get the draft Bill in its current form.
I want to speak on behalf of the most vulnerable interest group in the Transnet pension saga, and that is the elderly that are members of the second defined benefit pension fund. They do not have any bargaining powers. They cannot strike, because they are not supposed to work. They are supposed to enjoy their retirement with dignity and rest after decades of selfless service to South Africa. Most of them retired before 1990 and all of them are in their mid-seventies and older. Most are frail.
Yesterday I received a call from a Mrs Esterhuizen. She informed me that she was calling on behalf of her father. He had a stroke and cannot see any more, but he wants to know if we can’t help to get his meagre Transnet pension adjusted. Due to poor management these pensioners did not share in the record growth of the markets over the past three years. Their pension only increased with the statutory minimum of 2%. Many of them receive a monthly pension that is lower than the standard government pension for the elderly.
This House has a responsibility towards the most vulnerable in the community. Certain cases cannot be left to the markets to resolve. We are confronted here with a draft Bill that is the result of negotiations between officials and unions. Parliament does not only have to be a rubber stamp for a draft Bill that is silent about the fate of the vulnerable in society. The FF Plus asks that this amendment Bill should be adjusted, to make provision for an increase of the statutory minimum adjustment of 2%. The selling of the Cape Waterfront will hopefully relieve the financial crisis of the defined benefit fund. We can ensure that Transnet does what it takes to relieve the suffering of its retired workers. Thank you very much.]
Mr N M NENE: Thank you, Chairperson. This Bill is one of the very important milestones on the developmental agenda of the ANC-led government, that seeks to normalise society and bring about equality at all levels, including in the workplace. The Minister and other members have already outlined the salient features of this Bill. It is our belief that this Transnet Pension Fund is fully in compliance and in line with the Pension Funds Act in general. The trustees would also be given adequate training in order to discharge their fiduciary duties for the benefit of the members and the fund in general. The migration from the defined benefit schemes to the defined contribution schemes in the past resulted in surpluses that were in dispute until this House passed legislation that resolved the impasse. We trust that the lessons learnt from that process will be of value to this process and would be utilised to ensure that such anomalies don’t arise. We look forward to having this Bill before this House in order to pass it before the end of the session. The ANC supports this Bill.
Ms S RAJBALLY: Thank you, Madam Chair. In light of the fact that many employees submit a portion of their salaries into a pension fund that will hopefully in their old age and retirement assist in maintaining their basic needs, it is incumbent upon us to ensure the security of such funds.
The Transnet Pension Fund, which has been functional since 1990, and which in its 16 years has accumulated the pensions of so many employees, is an example of a fund that we have a duty to secure.
The MF is pleased about the provisions and amendments contained in the Bill, which clearly provides for an instrument that will secure the efficient management of the fund and will provide security for its beneficiaries.
The MF supports the Transnet Pension Fund Amendment Bill. I thank you.
Mr S L TSENOLI: Thank you, Chairperson. I would like to add my appreciation for the shift in the manner in which we deal with Bills. The transformation of Parliament is an ongoing process for us. Every step that we are taking to achieve that is an important one, and the politics of this Bill and the reasons why the issue requires legislation are crucial for us.
In a sense this step is a very important one; indeed we are taking a giant step to transform our institution, which is supposed to be the people’s tribune and is in fact the people’s Parliament. For that reason this is a very welcome move.
The reorganisation of the state, which we undertook to do when we took office in 1994, is a challenging task. Some of this work can have negative consequences. But evidence increasingly emerges that where we have done so in an inclusive and participatory manner, involving those affected, the results are almost always very productive and useful. This is one instance where, from indications so far, we are having such results.
Effective representation of the interests of those affected by these measures is crucial, not only in this sector but everywhere else. However, I do want to add my words to hon Hendrickse’s view about the Pension Funds Adjudicator, because we may not have an early opportunity to indicate our displeasure that he is not getting support where he should be getting it. I may be saying it before we get full briefings, but the work in this area is very important. It represents the interests of many people whose pensions and savings over the years must be protected, and those who are predators must be prevented from preying on them. We have to protect those who are unable to protect themselves.
This reorganisation is a crucial one. It shows that it is possible to intervene in a manner that satisfies the interests of the economy and those who are affected by the organisations that we are running, and for that reason this is a very significant move and we appreciate it. Thank you.
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Thank you. We have now accommodated everybody who indicated they wanted to participate in the debate. Is there perhaps anybody else?
Prof A K ASMAL: Chairperson, I am delighted at this opportunity to participate in a new approach to legislation. I made a suggestion 18 months ago to my Chief Whip, and the consummation of that is reflected here. I think it gives us an opportunity to look at the policy implications rather than going in hugger-mugger fashion to a portfolio committee. Or in fact, nobody realises the policy. It comes back to a Second Reading, and what we have is a Minister and others just telling us what the Bill states, rather than the policy behind it. I think it is important that we look at the technical measure and look at the enormous policy implications.
First of all, there has been agreement with the unions, government and Transnet, which itself is a victory, because pension issues are enormously sensitive throughout the world. It is a deferred salary. In the United States they want to privatise pensions. In Europe, because of extensive birth control and fewer births, they have problems with bringing back older people into service. The British are changing their pension laws to make it compulsory for people to work beyond 65.
Here we have, in a situation where the cost of pensions is a burden on the state, a rational, open, transparent, agreed-upon arrangement. I think this is a triumph for the kind of democracy we want to build, because I think the state could have used its power, particularly because of the background of the pension system in South Africa, to impose a solution. Because the background is – and I speak as a former school teacher, many, many years ago – that there was no pension for blacks, or there was a discriminatory pension for blacks.
It is a great tribute to the ANC that, very quietly, and in an orderly fashion, they have brought back the benefits of those who were excluded from the pension scheme. People who work for Transnet are, apart from mining, in one of the most dangerous areas in the world, the most unsafe areas in the world, and recognising the right and entitlement to pensions is recognition by all of us of this fact. We are saluting the older people who have contributed to the building of South Africa.
It is a pleasure therefore to take part in this opening approach to a new style of legislation. We shall allow people who are not in the portfolio committees to do this – I apologise to people who have been in the portfolio committees for usurping their right, but I think this is Parliament asserting its authority to say that policy issues must always be discussed before the Bill goes in a quiet, leisurely way to the portfolio committees. I thank you.
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Thank you very much, hon Asmal. Is there anybody else? If not, hon Minister Erwin, you may respond.
The MINISTER FOR PUBLIC ENTERPRISES: Chairperson, I must say that probably the hon Kader Asmal is the only person I’d contemplate a coup in Parliament with. From his last remarks, he is certainly aware of the powers of committees, and I think he is probably correct.
I thank the speakers, and I also think that what we have done has been a very interesting experiment. I hope we will settle down to a continued process.
In the same spirit, let me just add a few more issues, because I think members have raised some very important and interesting points. Firstly, the origin of the Bill, as you know, was from a strike action. The strike action raised a number of issues around the restructuring and I think, at the end, it is a testimony to the trade union movement and what it can achieve, that we were able to sit down at the end of a protracted strike and identify what would be sensible, equitable and feasible solutions, which would have a real and important impact on many, many members.
I think it is once again testimony to the importance of trade unions that they were able to highlight, particularly in this area of pensions, that there would be real uncertainty and real possible prejudice for members. I am very pleased that we have been able to settle this in the manner we have indicated.
There has been an issue as to whether we should put the exclusion of new members into the Transnet retirement fund from other companies into the rules or into the Act. We have insisted that we believe it should be in the Act, and the reasoning behind that is that, in the main, what we have to do now is already the consequence of some unusual steps that were taken in 2000, and even more problematic steps that were taken in 1990 when funds were set up with pensions which left us with some very difficult legacies. I will comment in a moment on the Second Defined Benefit Fund.
I think we should not create a situation, going forward, where there may be an expectation or a pressure arising that could further complicate this situation. We don’t need that. This is already an adjustment to meet the needs of pensioners. I have heard the arguments of some of the unions that maybe there would be benefit in it, but I am not at all persuaded. I think we should have clarity. We should be very clear that there will be this change, and that will be the end of it. We can’t have further changes. It is, I believe, in the interest of everybody, pensioners and all.
Let me very briefly comment on some of the speakers’ comments. In particular, I welcome the cross-party clarification to pensioners that this will not affect their rights. I think that is very important. It is the thrust and intention of it. It is in the spirit of the settlement we reached with the unions.
I really would urge all members that we should keep telling pensioners that. There is nothing worse than being a pensioner and being somewhat insecure about what is going to happen. Nothing will change. We will make certain that that is the case.
We could not deal with the Second Defined Benefit Fund in this Bill. It, unfortunately, is in an exceptionally complicated position, affected very much by the situation of the revenue coming into the fund, but I think, as has been intimated by Transnet, I am at least pleased that we will probably do something positive in the very near future. We are looking at that, but we could not change this Act, and create unnecessary exposure which could be massively to the detriment of Transnet. Transnet’s prime function is to ensure that we build ports – it came up earlier today – the railway lines, and that we get the new pipeline built. That is its prime function.
You must not underestimate what an impact a massive deficit on your pension fund can have on your balance sheet. We are trying to address that. We are seeking many, many ways of doing it, but at least I am confident that we will make some positive announcements in the near future.
Very briefly, on some of the comments made by the hon Cronin, we remember that there are other entities within Transnet that will go into a similar position. We are, as you know, looking at the issue of the South African express. We, in terms of the previous settlement, agreed to undertake an investigation on Autopax. We have now reported back to the unions, and I think fairly soon we will be able to indicate where that entity will go. I think it is important that we solve those issues.
Very briefly, on the implications …
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Very briefly.
The MINISTER FOR PUBLIC ENTERPRISES: Very briefly, on the implications of whether you can or cannot attach pension funds, this is a much wider issue. It can’t be dealt with here, and I think you are aware of that. It has got its pros and it has got its cons. I think that if we highlight it here, it might be something that spins out, and can be looked at again.
Thank you, Madam Chairperson, for the indulgence. I just hope that at the Second Reading, we will get support.
Debate concluded.
CONTENTION THAT MR M J ELLIS HAD CONTRAVENED THE SUB JUDICE RULE
(Ruling)
The ACTING DEPUTY SPEAKER (Ms C-S Botha): Thank you very much, hon Minister. Before I take Orders number 3 and 4, I wish to give a ruling on a point of order raised in the House on 20 September. Hon members, during a debate on a motion regarding the conduct of the hon Mr Gibson in the House on Wednesday, 20 September, the hon Chief Whip of the Majority Party raised a point of order contending that the hon Ellis was contravening the sub judice rule by making certain remarks.
I undertook before giving a ruling to study Hansard. I have now had the opportunity to study the unrevised Hansard, and wish to give my ruling. The remark of the hon Mr Ellis that was challenged in terms of the sub judice rule was, and I quote:
Did he …
The hon Gibson -
… defraud Parliament as some former and some present members did in the Travelgate scandal?
I have established the cases against sitting members of this House had not yet been concluded in the courts when the hon Mr Ellis made reference to them. The hon Chief Whip’s assertion that the sub judice rule could apply in these circumstances was therefore correct.
However, the hon Ellis merely referred to those cases in passing, and did not go into their merits. A member would only contravene the sub judice rule if the member discussed the merits of a case. I am therefore satisfied that the hon Mr Ellis was not in breach of the sub judice rule. Thank you.
MEASUREMENT UNITS AND MEASUREMENT STANDARDS BILL
(Second Reading debate)
ACCREDITATION FOR CONFORMITY ASSESSMENT, CALIBRATION AND GOOD LABORATORY PRACTICE BILL
(Second Reading debate)
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Dr R H Davies): Chairperson, it’s a pleasure to introduce the Second Reading debate on these two Bills. The Bills before us here deal with two of the three pillars of the national technical infrastructure that is normally the responsibility of government. A sound technical infrastructure plays a significant role in the economy in several ways, including by assisting firms to adopt and meet the quality standards necessary to compete in the global environment, and also by ensuring that low-quality, substandard imported goods do not undercut the productive base of our manufacturing sector. The purpose of the Measurement Units and Measurement Standards Bill is to provide for the establishment, powers and functions of a National Metrology Institute of South Africa, the NMISA, as a juristic person. The South African metrology system has been in existence for more than 60 years but, currently, metrology work is catered for through a metrology centre that reports to the Council for Scientific and Industrial Research at the CSIR campus.
The mandate of the National Metrology Institute, like the current National Metrology Laboratory, will be to provide for the use of measurement units of the international system of units and certain other measurement units for the designation of national measurement standards and for keeping and maintaining national measurement standards and units.
Metrology, which is the science of accurate measurement, forms a pivotal part of the technical infrastructure. To be credible internationally, the national measurement units and standards must be compatible with international measurement units and standards. There is an ever-increasing demand to demonstrate equivalence of national measurement systems in international trade transactions.
At home, accurate measurements are essential for health and safety as well as for the development of industrial capabilities. For instance, medical diagnostic tools such as X-ray machines, lasers and other instruments need to be accurately calibrated to ensure safe operation and reliable diagnosis. In addition, measurement accuracy plays a critical role in enabling firms to participate in value chains of advanced sectors such as the aerospace or nuclear industries.
The repositioning of the NMISA as an independent public entity will align its status with that of similar technical infrastructure institutions in other jurisdictions. The Bill provides for the NMISA to be governed through its own board of directors and for a consultative forum and relevant stakeholders that can advise the board on matters pertaining to metrology, and for formal co- operation agreements with the CSIR on matters that may be of mutual benefit and interest, especially with regard to new research fields that may require the development of new standards.
An independent status for the institute is necessary as metrology is the foundation of the technical infrastructure, and we need to demonstrate organisational independence equivalent to that of international peers.
The NMISA is also the most advanced metrology institute on the African continent and therefore has a critical role to play in uplifting regional and continental peer institutes. The international standing of our national institute is demonstrated through its membership of all but one of the technical consultative committees of the International Committee for Weights and Measures.
The NMISA is also a signatory of the Applicable Global Mutual Recognition Arrangement and this facilitates the international acceptance of South African measurements and certificates.
The purpose of the second Bill, the accreditation Bill, is to provide an internationally recognised and effective accreditation and good laboratory practice compliance monitoring system for South Africa by establishing the South African National Accreditation System, Sanas, as a public entity. Sanas will be recognised as the only accreditation body in South Africa for conformity assessment and calibration.
Accreditation forms a vital second pillar of our domestic technical infrastructure. Accreditation is the process by which an authoritative third party, in our case Sanas, formally recognises the technical competence of conformity assessment service providers such as laboratories, inspection bodies and certification institutions. Such conformity assessment service providers normally operate in a fiercely competitive environment. Accreditation therefore assists local customers of such services by setting norms for conformity assessment service providers based on demonstrated competence. It also allows for the acceptability of local conformity assessment service providers by confirming their ability to perform specific types of testing, measurement, certification and inspection against a published and specific schedule of accreditation. The credibility of Sanas as an accreditation body is thus of immense value to our economy in this regard.
Increasingly, accreditation is used by South African regulators to ensure both the competence and consistency of the outcome of service providers used in the local regulatory domain. The Department of Labour is a case in point. It has outsourced inspection services in relation to fire extinguishers and vessels under pressure and now uses Sanas accreditation to monitor the activity of its approved inspection service providers as part of managing the local regulatory risk.
The increasing demand by large European-based food retailers for compliance with their own food production and safety standards is another case in point. Sana’s competence in the area of food standards has been recognised by several international food retailers. This means that in certain cases local suppliers can use Sanas accredited certification bodies to prove compliance with these standards. This ensures that local produce is shown to comply with these standards prior to exports, and prevents the costs and unnecessary waste that would be incurred if such activity could only be verified at the point of entry.
As is the case with the measurement Bill, one of the main purposes of the accreditation Bill is to change the corporate form of the current institution by establishing it as a public entity. Sanas was established by Cabinet decision in 1994 and currently operates as a non-profit organisation in terms of section 21 of the Companies Act.
The new identity for Sanas is provided for in the Bill, and it is required first to meet the requirements of the National Treasury to phase out section 21 companies as government agencies; second, to facilitate the use of accreditation by government departments, especially in support of conformity assessments in regulation, and third, to recognise Sanas as the only accreditation body in South Africa for conformity assessment and calibration.
The Bill will also support the prescription of impartiality by the International Laboratory Accreditation Co-operation and the International Accreditation Forum in order to maintain international recognition of the activities of Sanas. In terms of the Bill, Sanas will have its own board appointed by the Minister of Trade and Industry as well as an advisory forum that will ensure that stakeholder interests are communicated to and considered by the board.
The two Bills before us are therefore aimed at strengthening the South African technical infrastructure, and I have pleasure in calling for their support from the House. I thank you. [Applause.]
Mr B A D MARTINS: Hon Chairperson, hon members, the Bill before us is the result of the Department of Trade and Industry’s endeavour to restructure South Africa’s technical regulatory infrastructure and to optimise its standards, quality assurance, accreditation and metrology system.
Quality assurance, as members know from their constituency work, is important in a number of areas, from bread and butter, to bricks and cement. For instance, in the construction industry some unscrupulous building contractors continue to use substandard bricks and cement when building houses for the poor, with the result that these dwellings often collapse and cause deaths, serious injury and damage to property. With clear standards, quality assurance and stringent enforcement procedures, the days of the unscrupulous operator will be numbered.
The Bill further provides a framework to establish the SA National Accreditation System as a national accreditation body that is internationally recognised for calibration, conformity assessment and good laboratory practice.
It is envisaged that as the economic integration of the Southern African Development Community takes place and leads to greater growth and development, Sanas will have a crucial role to play in the region, and also in the context of the New Economic Partnership for Africa’s Development.
The ANC supports the passage of this Bill through Parliament. I thank you. [Applause.]
Dr P J RABIE: Madam Chair, hon Deputy Minister, hon members, the object of the Measurement Units and Measurement Standards Bill, 2006, and the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill is to align and restructure South African technical infrastructure with international best practice. Part of the restructuring is the reconstitution of the SA National Accreditation System, Sanas, which currently operates as a section 21 company.
These two Bills are responsible for a wide range of functions, for example the accreditation, calibration, testing and verification of laboratories, scientific inspection bodies that comply with the International Organisation for Economic Co-operation, and the Development Unit.
The DA supports both these two Bills, which are highly technical. They both provide for a board with executive and nonexecutive members. I appeal to the hon Minister to appoint members to these boards with specific competence and with knowledge that will add value to these particular bodies.
Die internasionale meting van metrologiese eenhede word dikwels deur ontwikkelde ekonomieë gebruik om hul markte te sluit vir produkte wat van ontwikkelende lande afkomstig sou wees, as gevolg van die feit dat die produkte nie aan internasionale metingsvereistes sou voldoen nie, of onredelik hoë tariewe word op hierdie goedere gehef. Hierdie wetsontwerpe stel Suid-Afrika en die SAOG-lande in staat om, sal ons sê, onregverdige handelspraktyke te verminder.
Die belangrikheid van die twee wetsontwerpe is dat die wetenskaplike infrastruktuur onderhou en vergroot word, wat Suid-Afrika as die grootste ekonomie in Afrika maar ook in die SAOG-lande in staat sal stel om in ’n toenemende mate aan metingsvereistes rakende uitvoere in ’n kompeterende, globale mark te kan voldoen.
Vergun my ook die geleentheid om die Departement van Handel en Nywerheid, die Portefeuljekomitee oor Handel en Nywerheid se amptenare, en veral die persone wat gemoeid was met die finalisering van hierdie wetsontwerpe te bedank. Ek dink dit is ’n sprekende voorbeeld van waar die belange van Suid- Afrika eerste gestel is.
Werklike langtermyn ekonomiese vooruitgang kan slegs plaasvind indien dit op ’n wetenskaplik gefundeerde, internasionaal geakkrediteerde metingsinfrastruktuur geskoei is, en in wese beteken dit dat hierdie wetsontwerpe die kwaliteitstruktuur en –kultuur van die Suid-Afrikaanse metingbedryf sal verbeter. Ek dank u. (Translation of Afrikaans paragraphs follows.)
[The international measurement of metrological units is often used by developed economies to shut their markets to products suspected of coming from developing countries, due to the fact that these products apparently do not comply with international measurement standards, or these products are subjected to unreasonably high tariffs. This Bill enables South Africa and the SADC countries to, shall we say, limit unfair trade practices.
The importance of these two Bills is that the scientific infrastructure is maintained and expanded, which in turn enables South Africa, as the largest economy in Africa but also in the SADC countries, to comply increasingly with the measurement standards required for exports in a competitive and global market.
Furthermore, allow me the opportunity to thank the Department of Trade and Industry, the officials of the Portfolio Committee of Trade and Industry and especially those who were involved with the finalising of this Bill. I think it is telling proof of where the interests of South Africa were placed first.
Real long-term economic advancement can only be realised if based on scientific, internationally accredited measurement infrastructure and in essence it means that these Bills will improve the quality structure and culture of the South African measurement industry. I thank you.]
Prof E S CHANG: Hon Chairperson, Deputy Minister, members, up to now I have been listening to the debate, and we are all saying the same things. When our colleagues from the left-hand side are not speaking English, I don’t understand them, but I presume we are still speaking about the same thing. However, I’m given two minutes, so I still want to use my two minutes, just to emphasise our support of this Bill.
The use of well-written standards in the conformity assessment process adds credibility and validity to the process. Standards should also specify all essential characteristics of our products. We are now part of our new global economy. I think everyone in this House would agree: We need a vision of how we can make South African product inspections and tests acceptable everywhere, not just in South Africa. We must strive to maintain the highest level of protection of safety and environment.
So, I challenge the government and the South African National Accreditation System, or Sanas, to work as partners to act aggressively, persistently and intelligently to advance our concepts as the basis for international standards. We cannot risk the prospect that our products and companies will be locked out of future markets.
It is well known that South Africa has a very good technical infrastructure and needs to keep up with international standards, especially in terms of measurement standards. Let us not forget that measurements are a key to competitiveness. There has never been a time in which measuring accurately has been more important to the nation’s economic health.
Laboratory accreditation, product certification and management systems are too often used as nontariff trade barriers. Where one or more of these processes are needed to improve confidence between buyers and sellers or by regulators, this is where the National Measurement Institute can work to assure that the systems are open and add value rather than costs. Thank you very much.
Mr H B CUPIDO: Chairperson, the ACDP is pleased to speak in favour of the Measurement Units and Measurement Standards Bill and the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill. South Africa has become an important role-player in the global village and therefore needs to conform to international best practices.
These Bills, inter alia, seek to restructure the South African technical regulatory infrastructure and to optimise South African standards, quality assurance, accreditation and our metrology system. Bringing to life an independent national metrology institute will not only enhance the technical infrastructure of the Republic of South Africa but will continue to be a direct link to the Meter Convention for SADC, through the SADC co- operation in metrology, and will provide appropriate measurements, traceable not only to South Africa but to the whole of the SADC region.
South Africa needs a body like the South African National Accreditation System that would be internationally recognised for calibration, conformity, assessment and good laboratory practices. The ACDP is convinced that the role that Sanas will play as an effective accreditation and monitoring body in South Africa will have a positive impact on technical services rendered by other SADC countries soon. The ACDP supports the Bills. [Interjections.] [Time expired.]
Ms S RAJBALLY: Chairperson, the MF acknowledges the efforts of the Department of Trade and Industry in these two Bills. In the fast developing world, it is crucial that we equip ourselves with tools that shall allow us to manage change and compete globally. This department plays a vital role in the economic structure and development of South Africa domestically and internationally.
It is clearly indicated that with the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill, the department aims to modernise our technical infrastructure. As with the Measurement Units and Measurement Standards Bill, the MF supports the establishment of the National Metrology Institute. The MF supports the Measurement Units and Measurement Standards Bill and the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill. Thank you, Madam Chair.
Mr J J MAAKE: Madam Chair, hon members of the House and the Ministers present today, the Measurement Units and Measurement Standards Bill sounds like a very technical Bill, but, in actual fact, the Bill only seeks to establish the National Metrology Institute, which was previously part of the CSIR and the National Metrology Laboratory, as a juristic person that is independent from the CSIR.
The sector of metrology is usually very technical in such a way that we, as laymen, sometimes do not even know of its existence. It is, however, very important because in terms of international trade, standards, quality assurance and accreditation, it is the correct functioning of such an institute that keeps our products in the international markets. It is therefore very crucial for South Africa to have a very sophisticated and highly competent metrology system, in order to keep abreast of technological advancement in line with the globalised markets.
Western countries usually put very high standards on the products they import, especially products from Third World countries. This they do, knowing very well that most developing countries do not even have metrology institutes to be in a position to measure the standards of their goods. South Africa is doing a lot of good work for our fellow African countries in this regard. An example will be that of the Tanzanian fish that was banned in the European markets under the pretext of low quality and standards. South Africa came in and helped, and normalised the situation in the Tanzanian export market.
I wish the following Bills, the Measurement Units and Measurement Standards Bill and the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill, would also be applied to political parties. We could then have standards of behaviour compatible with what our people expect from a South African Parliament. Standards of procedures for evaluating performance and intervals for evaluation would be set for these parties. We could then explain the consequences of substandard performance, because right now, substandard performance is the norm in these parties.
As of now, Madam Chair, you can imagine what might happen if you left the opposition parties alone in this House without the ANC. Chaos of frightening proportions! The beautiful textile and embroidery that makes our Parliament walls very beautiful might be replaced with female underwear. Neighbouring countries like Lesotho might be invaded and colonised. All the efforts to build stadiums for 2010 would be halted. There would be no Gautrain. Settlers might be sent back to Europe and the country might be called Azania.
The only reliable person who can be left alone without the ANC in the House might be hon Van der Merwe. At least, when we came back, our salaries would have been tripled. [Laughter.] I would not mind leaving him alone; in fact, I would advise that you leave him alone. The ANC supports the Bill. [Time expired.] [Applause.]
The HOUSE CHAIRPERSON (Ms C-S Botha): Perhaps you want to move a private member’s motion on that.
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Dr R H Davies): Chairperson, I want to thank all the speakers for their support, and in particular I want to welcome the recognition by a number of speakers that having in place competent, credible metrology accreditation and standardisation institutions is of very great value.
Issues of measurements, standards and accreditation are increasingly important, and so are issues of competitiveness. If you cannot meet basic standards, you cannot compete. They are also important matters of consumer protection and increasingly issues in international trade. As tariffs have come down and subsidies are under challenge, technical barriers to trade are becoming of increasing importance. And, if we are going to be a competent player in these areas, it is important that we have technical infrastructure in place that is up to the job.
I am also pleased that there was recognition that the Bills before us will contribute to the improvement and modernisation of our technical infrastructure and that there is broad support for the general direction.
I just want to comment on one point, which was raised by Dr Rabie, when he pleaded with the Minister to make sure that competent people were appointed. I should point out to him that both Bills require that the people who are appointed to the boards of these institutions have sufficient knowledge, experience and qualifications relating to the functions of these institutions. Of course, we want to maintain the standards. We want to ensure that the boards reflect our demographics and are in tune with the transformatory agenda. But, rest assured, maintaining the competence of these institutions will be our top priority. Thank you. [Applause.]
Debate concluded.
Measurement Units and Measurement Standards Bill read a second time.
Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Bill read a second time.
The House adjourned at 16:49. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
FRIDAY, 20 OCTOBER 2006
TABLINGS
National Assembly and National Council of Provinces
-
The Minister of Arts and Culture
(a) Explanatory Memorandum to the Convention on the Protection and Promotion of the Diversity of Cultural Expression.
COMMITTEE REPORTS
National Assembly
- Seventy-Seventh Report of Standing Committee on Public Accounts on South African Weather Services, dated 6 September 2006:
Resolution
The Standing Committee on Public Accounts (SCOPA), having heard and
considered evidence on the Annual Report and the Report of the Auditor-
General on the financial statements of South African Weather Services
(SAWS) for the year ended 31 March 2005, reports as follows:
1. Donor Funding (page 31, par 4.1)
The Committee was informed that there were inadequate controls in
place to monitor the progress of donor-funded projects against
funds donated for specific projects.
The Committee noted this with dissappointment and regards this as
the management failure. The Committee wishes to recommend that
the Accounting Authority—
(a) Determines whether any senior manager can be held
responsible for the management failure;
(b) Assures Parliament that instances like this will not
reoccur in the future;
(c) Ensures that regular progress reports are compiled and
reviewed by management in order to monitor amounts spent on
projects in relation to the percentage completion of the
specific project; and
(d) Ensures that there are proper controls over expenses
incurred per project in relation to funds received.
2. Non-compliance with laws, rules and regulations (page 31, par
4.2)
The report of the Auditor-General highlighted that the following
instances of non-compliance with laws and regulations occurred:
(a) Non-maintenance of a register of members’ interests in
relation to contracts;
(b) The investment policy of SAWS was inadequate and in
particular did not comply with specific requirements of
Treasury Regulations.
(c) Lack of controls to ensure that quarterly reports are
submitted on time.
The Committee is disappointed that this entity is still not
complying with simple issues of Treasury Regulations and that
management is not fulfilling its fundamental responsibility of
enforcing controls, in order to ensure that interests in contracts
are declared and regularly reviewed and revised where necessary.
2.1 Recommendation
The Committee recommends that the Accounting Authority urgently
ensure that:
(a) Interest in contracts by management is declared, thereby
reducing the risk of certain suppliers of goods and services
receiving preferential treatment;
(b) Management only invest funds as per the approved policy,
thus reducing the risk of losses to the SAWS; and
(c) Management implements proper controls to ensure that the
requirements of the PFMAand the DEAT are strictly adhered to.
3. Internal control weaknesses (page 31, par 4.3)
The audit of the SAWS revealed shortcomings in the system of
internal control, which includes the following:
(a) SAWS has been Operating without an approved internal
control policy for a number of years;
(b) The Lack of a proper debt control policy and poor
enforcement of internal controls;
(c) Failure to monitor unallocated amounts are not followed on
a regular basis in order to clear suspense accounts; and
(d) Failure to perform leave reconciliations. In light of the
above, the Committee is of the view that the management of
SAWS underestimates the importance of internal control within
an organisation.
3.1 Recommendations
The Committee recommends that the Accounting Authority ensure
that:
(a) Policies are enforced and disciplinary steps are taken
against employees failing to comply with these policies;
(b) Management implements and enforce proper credit control
and debt collection policies and obtain legal assistance in
the collection of long overdue debts;
(c) Debts are recovered timeously;
(d) The risk of duplicate payments to creditors is reduced;
and
(e) Leave reconciliations are performed at year end to ensure
that the provision for leave pay is accurately calculated.
4. Land (page 32, par 4.4 )
According to the SAWSAct, 2001 (Act No 8 of 2001) a portion of the
Department of PublicWorks land was allocated to SAWS. The SAWS did
not register this land in its name and this land, therefore,
remains in the name of the Department of Public Works.
The Committee noted this with concern as it seems to be because of
a lack of proper follow-up procedures on the registration process
of the land.
4.1 Recommendation
The Committee recommends that the Accounting Authority ensures
that SAWS monitors the registration process closely to ensure that
the title deed is registered as soon as possible in the name of
SAWS.
The SAWS must furnish Parliament with a full report detailing the
whole progress to date within 60 days after the tabling and
adoption of the Committee’s Report.
Report to be considered. 2. Seventy-Eighth Report of Standing Committee on Public Accounts on
Compensation Commissioner for Occupational Health Diseases (CCOD),
dated 6 September 2006:
RESOLUTION
The Standing Committee on Public Accounts (SCOPA), having heard and
considered evidence on the Annual Report and the Report of the Auditor-
General on the financial statements of the Compensation Commissioner
for Occupational Health Diseases (CCOD) for the year ended 31 March
2005 RP136/2005, reports as follows:
1. Policy Framework
The Committee noted that the CCOD had the following problems with
regard to policy framework:
• Lack of a policies and procedures manual that is specific to
the
• operating activities of the CCOD;
• Lack of an updated data base of mines and works that enables
the CCOD to monitor actual levies received against levies
expected;
• No functional audit committee exists at the Department of
Health to ensure that the CCOD is operating in line with
policies and procedures; and
• Lack of an accounting system to manage debtors and creditors.
The Committee was informed by the Department of Health and
theCompensation Commissioner during the hearing that the above
problems are in the process of being resolved.
The Committee therefore recommends that:
(a) lear policies and procedures that are specific to the
operations of the CCOD be developed as matter of urgency;
(b) esearch should be commissioned to determine the actual
number of qualifying mines and works in the country;
(c) econciliation for debtors should be prepared in terms of
Treasury Regulation 31.1.2(j); and a proper accounting system
to manage debtors and creditors be developed;—a proper accrual
accounting system should be implemented.
The Committee further noted that the Medical Bureau for
Occupational Diseases (MBOD) in the provinces is in the process of
developing policies. The Committee recommends that the accounting
officer inform SCOPA of the progress made in this regard.
2. Oversight and Governance
The Committee is aware that the Director General of the National
Department of Health is the accounting officer of the CCOD. The
Audit Committee, Internal Audit and the Management of the National
Department of Health are responsible for providing oversight over
the CCOD.
However, the following deviations and non compliance with PFMA and
Treasury Regulation are noted and need to be addressed:
• The National Department of Health has not been providing
oversight over the MBOD and the CCOD operations;
• The Audit Committee for the National Department of Health has
been dysfunctional for the 2004/05 financial year; and
• Internal audit reviews were not performed at the MBOD and the
CCOD for 2004/05 financial year.
The Committee recommends that the Accounting Authority should
ensure that:
(a) The National Department of Health must implement proper
monitoring and oversight mechanisms to ensure that the MBOD and
the CCOD fulfill their mandate;
(b) The National Department of Health must establish an Audit
Committee with clear terms of reference to ensure that the
activities of the MBOD and the CCOD are reviewed as required by
the law; and that progress made with regard to the
establishment of the Audit Committee at the Department of
Health is provided to the Committee;
(c) That internal audit reviews are performed as required.
3. Resources
The Committee is very concerned and request the Accounting Officer
to ensure that the following highlighted weaknesses are addressed
as a matter of urgency:
• Inadequate staff numbers to verify the number of mines, to do
inspections of declared risk shifts and verify the accuracy of
assessments.
• Inadequate technical accounting skills, information technology
knowledge and internal control awareness at the MBOD and the
CCOD
• Lack of supervision and review of processes and other internal
control issues.
The Committee strongly urges the Accounting Officer to ensure that;
(a) A review of the staff compliment for sufficiency and
skills is carried out to address the skills and capacity
challenges at the MBOD and the CCOD;
(b) The CCOD must recruit properly qualified people to take
care of financial and accounting responsibilities of the
entity;
(c) A dedicated compliance section within the CCOD should be
established to monitor the number of mines and works in
existence and to monitor their compliance with the Occupational
Diseases in Mines and Works Act. Returns of levies should be
checked to ensure that revenue is collected; and
(d) Department, the MBOD and the CCOD must look at getting an
electronic system for finger printing verification, and reduce
dependence on the Department of Home Affairs to ensure
efficiency.
4. General
The Committee is very concerned with the financial transaction of
nvestment the CCOD embarked upon that caused the entity to incur
fruitless expenditure in excess of R45 million.
The Committee therefore recommends that, the National Treasury and
the CCOD must provide a detailed report to SCOPA on transactions
related to its investments and surplus funds within 60 days of the
tabling of this report.
Report to be considered.
- Seventy-Ninth Report of Standing Committee on Public Accounts on Department of Labour, dated 18 October 2006: Resolution
The Standing Committee on Public Accounts (SCOPA), having heard and
considered evidence on the Annual Report and the Report of the Auditor-
General on the financial statements of the Department of Labour for the
year ended 31 March 2005, reports as follows:
1. Reconciliation between PERSAL and BAS (page 78 of the Annual
Report)
A reconciliation between PERSAL and BAS in respect of personnel
expenditure for the period 1 April 2004 to 31 March 2005 had not
been performed by the Department. As a result, the Auditor-General
was unable to verify the accuracy of the amounts transferred from
Persal to BAS by way of the interface between the two systems.
The Committee therefore recommends that the Accounting Officer
correct the matter immediately, inter alia by ensuring that—
1.1 Monthly reconciliations are carried out timeously and
properly, and
1.2 All unreconciled items are followed-up immediately and
resolved.
2. Lack of supporting documentation (page, 79 AR)
During the audit, the Department could not provide sufficient
supporting documentation in respect of journals processed, for
claims recoverable amounting to R90, 185 million.
The Committee is very concerned that such an elementary aspect of
proper financial administration is lacking.
The Committee recommends that the Accounting Officer ensure that
the matter is corrected immediately, inter alia by ensuring that:
2.1 Only valid journals are processed;
2.2 A proper file management process is in place, and
2.3 Proper reviews of journals are carried out before any
processing commences.
3. Non-compliance with laws and regulations (page 79 AR)
The Committee noted various instances of non-compliance with the
PFMA and Treasury Regulations.
In light of the Accounting Officer’s legal duties as contained in
sections 38 to 43 of the PFMA, the Committee recommends that the
Accounting Officer report to the Minister all current instances
where his Department does not comply with the provisions of the
PFMA or Treasury Regulations.
The Committee recommends that a progress report be sent to
Parliament, within 30 days after the tabling and acceptance of the
Committee’s Report
4. Reconciliation between the asset register and the general ledger
(page 80, AR)
Due to non-compliance with asset management policies and
procedures, the fixed asset register of the Department is split and
incomplete. No reconciliations are carried out to ensure a proper
audit trail.
The Committee is once more perturbed by the inadequate standard of
financial administration within the Department of Labour and
recommends that the Accounting Officer correct the matter
immediately, inter alia by:
4.1 Reporting to the Minister the target date for the
finalisation of a complete asset register for the Department,
and where necessary for public entities for whom the
Accounting Officer and the Minister are responsible; and
4.2 Ensuring that regular reconciliations are done between
asset registers and the general ledger.
5. Unallocated funds (page 80, AR)
As at 31 March 2005, the amount accumulated in the SETA Zero
account at the National Revenue Fund amounted to R45 513 376. The
Department has not taken adequate action to withdraw this amount
from the National Revenue Fund (NRF) and to investigate the nature
of these monies ensuring that it is only Skills Development Levy
(SDL) income.
As at year-end the nature or purpose of the monies in the SETA Zero
account could not be verified for audit purposes.
The Committee recommends that the Accounting Officer correct the
matter within 60 days after the tabling and acceptance of the
Committee’s Report, inter alia by ensuring that—
5.1 There is proper allocation of Skills Development Levies;
5.2 All unallocated levies are allocated to the NSF; and
5.3 The Department of Labour, in consultation with the South
African Revenue Services, implement measures to resolve the
uncertainty and accountability relating to the content of the
SETA Zero account.
6. Perfomance Bonus
The Committee noted that the Department paid the percentage of
performance bonuses (to total personnel expenditure) amounting to
5,06% (or R39,556,784.20)—this is above the DPSA directive of 1,5%.
The Committee recommends that the Department furnish it with a
detailed report within 30 days after the tabling and acceptance of
the Committee Report.
Report to be considered.
- Eightieth Report of Standing Committee on Public Accounts on Compensation Fund, dated 18 October 2006: Resolution
The Standing Committee on Public Accounts (SCOPA), having heard and
considered evidence on the Annual Report and the Report of the Auditor-
General on the financial statements of the Compensation Fund (the Fund)
for the year ended 31 March 2005, reports as follows:
1. Exception reports to verify assessments not followed up [par 3.1
and 3.2 on page 60 of the Annual Report (AR)]
The Fund had not generated and followed up exception reports
showing assessment variations in excess of 20%. In addition, the
relevant computer system (theAXS One system) used incorrect tariffs
to raise assessments and income and in too many instances
assessment debtors were incorrect. The Fund had overstated the
assessments raised and the resulting debtor balances, and penalties
were not charged on overdue account balances.
The Committee therefore recommends that:
1.1 Improved policies and procedures are implemented to
enhance the accurate capturing of data in respect of all
assessments;
1.2 Procedures be implemented to reconcile, review, approve
and monitor outstanding employer amounts; and
1.3 The validity, accuracy, and completeness of revenue from
employer contribution and associated debtors are improved.
2. General computer controls (par 5.2, page 61)
A follow-up review of the Fund’s general computer controls
indicated a lack of documented procedures for security
administration and monitoring, logical access security and
monitoring of user and administrator activity.
The Committee recommends that in view of the critical reliance of
the Fund on its computerised information systems, immediate steps
be taken to—
2.1 Improve the integrity of data processing and data files on
the financial systems; and
2.2 To develop and implement, documented and improved policies
and procedures governing general controls.
3. Compliance with Treasury Regulations (par 5.3, page 62)
The Committee noted that the investment policy required by Treasury
regulation 31.3 was approved after year-end. During the year under
review the investments were not monitored in terms of an approved
policy.
The Committee recommends that a proper policy framework covering
approvals of important regulatory documentation is developed, and
that the Minister be provided with confirmation once this has been
done.
4. Processing of backlogs of claims (par 5.4, pg 62)
The fund was still experiencing a backlog in the processing of
claims. It was not possible to determine the impact of this backlog
on the completeness of claims due to the volume of transactions.
Third party claims were not timeously lodged with the parties
concerned.
The Committee therefore recommends that:
4.1 Backlogs and turnaround time for the processing of claims
be reduced in terms of specific targets, and performance in
respect of these targets must be reported to the Minister on a
regular basis;
4.2 A proper policy framework in respect of third party claims
be developed immediately; and
4.3 The processing function must be resourced with staff with
adequate skills and qualifications.
5. Internal control deficiency (2004 AR, pg 51, par 4.1)
The Committee took note of an increase of disallowed claims
consisting of overpayments and duplicate payments in respect of
medical, compensation and pension payments. The Committee noted
with concern that the Fund seem unable to remedy this matter. The
Committee recommends that:
5.1 Apreventative control framework should be developed to
detect and prevent overpayments or duplicate payments; and
5.2 A report to be tabled in Parliament within 60 days after
tabling and acceptance of the Committee Report.
6. Inadequate file management
The Fund has an inadequate file management system to keep track of
files, resulting in files getting lost, duplicated or being
incomplete.
Although the Fund has begun to scan and index file content, there
is still a lack of quality reviews resulting in errors that are not
detected and corrected in time.
The Committee recommends that an effective electronic filing
system, incorporating quality reviews to timeously detect and
correct errors, be implemented.
7. Special investigation
Aforensic investigation requested by management on medical claims
paid to certain service providers between 1 April 1998 and 31 March
2003 was performed and a report was issued on 23 September 2003.
The Fund is acting on the findings and the recommendations.
The Committee commends the Fund for taking action upon discovery of
possible fraud. However, the Committee recommends that the Fund
implement more effective preventative measures and more effective
controls. The effectiveness of such measures must be reviewed on a
regular basis.
Report to be considered.
- Eighty-First Report of Standing Committee on Public Accounts on Independent Electoral Commission, dated 18 October 2006:
1. INTRODUCTION
The Standing Committee on Public Accounts, having considered the
Annual Report and the Report of the Auditor-General on the
Financial Statements of the Independent Electoral Commission for
the year ended 31 March 2006, tabled in Parliament and referred to
it, reports as follows:
2. AUDIT OPINION
The Committee noted the unqualified audit opinion expressed by the
Auditor-General, and trusts that future audit opinions will be
equally unqualified.
3. UNUTILISED SURPLUS
The Committee notes that the unutilised surplus has increased to
R154 995 591. The Committee requests a detailed breakdown of what
the Independent Electoral Commission intends to use this surplus
for, within 60 days.
4. CONCLUSION
Except for the matter mentioned above the Committee is of the view
that given the information thus far, no further interaction with
the Accounting Authority of the Independent Electoral Commission is
necessary for the financial year under review.
The Committee therefore awaits the next Annual Report and the
Report of the Auditor General.
Report to be considered.
- Eighty-Second Report of Standing Committee on Public Accounts on the Human Rights Commission of South Africa, dated 18 October 2006:
1. INTRODUCTION
The Standing Committee on Public Accounts, having considered the
Annual Report and the Report of the Auditor-General on the
Financial Statements of the Human Rights Commission of South Africa
for the year ended 31 March 2006, tabled in Parliament and referred
to it, reports as follows:
2. AUDIT OPINION
The Committee noted the unqualified audit opinion expressed by the
Auditor-General, and trusts that future audit opinions will be
equally unqualified.
3. CONCLUSION
The Committee is of the view that given the information thus far,
no further interaction with the Accounting Authority of the Human
Rights Commission of South Africa is necessary for the financial
year under review.
The Committee therefore awaits the next Annual Report and the
Report of the Auditor General.
Report to be considered.
- Eighty-Third Report of Standing Committee on Public Accounts on Legal Aid Board, dated 18 October 2006:
1. INTRODUCTION
The Standing Committee on Public Accounts, having considered the
Annual Report and the Report of the Auditor-General on the
Financial Statements of the Legal Aid Board for the year ended 31
March 2006, tabled in Parliament and referred to it, reports as
follows:
2. AUDIT OPINION
The Committee noted the unqualified audit opinion expressed by the
Auditor-General, and trusts that future audit opinions will be
equally unqualified.
3. GENERAL MATTERS
1. The Legal Aid Board must supply a breakdown by employee of
expenses / allowances as reflected on page 55 of the Annual
Report 2005/06.
2. Outline the reasons for the deficit of R19 287 781 as reflected
on page 71.
3. What steps, if any, have been instituted to recover the
fruitless expenditure of R24 000.00 (2006) and R26 000.00
(2005) as reflected on page 87?
4. Provide details of ‘‘other receivables’’ of R3 403 157 and
‘‘sundry creditors’’ of R18 938 427 as reflected on page 81.
The Committee requires all the above information within 60 days
of the tabling of this report.
4. CONCLUSION
Except for the general matters for further elaboration above, the
Committee is of the view that given the information thus far, no
further interaction with the Accounting Authority of the Legal Aid
Board is necessary for the financial year under review.
The Committee therefore awaits the next Annual Report and the
Report of the Auditor General.
Report to be considered.
- Eighty-Fourth Report of Standing Committee on Public Accounts on Public Protector of South Africa,
1. INTRODUCTION
The Standing Committee on Public Accounts, having considered the
Annual Report and the Report of the Auditor-General on the
Financial Statements of the Public Protector of South Africa for
the year ended 31 March 2006, tabled in Parliament and referred to
it, reports as follows:
2. AUDIT OPINION
The Committee noted the unqualified audit opinion expressed by the
Auditor-General, and trusts that future audit opinions will be
equally unqualified.
3. CONCLUSION
The Committee is of the view that given the information thus far,
no further interaction with the Accounting Authority of the Public
Protector of South Africa is necessary for the financial year under
review.
The Committee therefore awaits the next Annual Report and the
Report of the Auditor General.
Report to be considered.
MONDAY, 23 OCTOBER 2006 TABLINGS
National Assembly and National Council of Provinces
- The Minister of Defence
a) Report and Financial Statements of the Castle of Good Hope for 2005-
2006, including the Report of the Auditor-General on the Financial
Statements for 2005-2006 [RP 219-2005].
- The Minister for Public Enterprises a) Report and Financial Statements of Alexkor Limited for 2005-2006, including the Report of the Independent Auditors on the Financial Statements for 2005-2006.
National Assembly
- The Acting Speaker
(a) Final Report: South African Observer Mission to the 2006
President and Legislative Elections in the Democratic Republic of
Congo on 20 June 2006.
CREDA PLEASE SCAN IN REPORT - PAGES 2328-2343
COMMITTEE REPORTS
National Assembly
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REPORT OF THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY ON A STUDY TOUR TO THE WORLD TRADE ORGANISATION, GENEVA, SWITZERLAND
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TERMS OF REFERENCE
The Committee had agreed to undertake a study tour of the World Trade Organisation within the context of its oversight role of the Department of Trade and Industry and its multilateral negotiations. The Training for members in this regard is crucial in gaining a better understanding of the functioning of the World Trade Organisation.
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LOGISTICAL ARRANGEMENTS
A delegation from the Portfolio Committee on Trade and Industry undertook a training session at the World Trade Organization in Geneva, Switzerland, from 26 – 30 June 2006. The multi-party delegation was led by the Chairperson of the Portfolio Committee, Mr. B D Martins (ANC) accompanied by Mr. S Rasmeni (ANC), Mrs. B Ntuli (ANC), Dr. P Rabie (DA) and Ms. M Williams (Committee Secretary).
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BACKGROUND
The World Trade Organisation (WTO) is the only global international organisation dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. South Africa is an actively involved member of the WTO.
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OBJECTIVES
The responsibilities of the Portfolio Committee on Trade and Industry include(s) oversight of the Department of Trade and Industry and it’s multilateral negotiations. Thus the WTO training for National Assembly members is imperative in this regard. Also, to gain a better understanding of the functioning of the WTO, meeting with the WTO directors and country representatives on issues relating to trade negotiations, disputes and monitoring national trade policies as well as providing technical assistance and training for developing countries.
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FINDINGS
The delegation from the Portfolio Committee on Trade and Industry met with the officials from the South African Mission in Geneva on Sunday 26 June 2006 at 16:00 for a briefing session regarding the training. In attendance were the following officials: Mr. Faizel Ismail (South Africa’s representative to the World Trade Organisation), Mr. Xavier Carim (Department of Trade and Industry), Dr. Phil Mohlahlane, Mr. Gunther Muller, Mr. Attie Swart, Ms Gerda van Dijk (Department of Agriculture).
Mr. Ismail introduced members to the various officials and added that Agriculture and Trade and Industry are important issues in the trade negotiations. A WTO modalities meeting scheduled for 28 June – 01 July 2006 was underway whereby Ministers and Heads of delegations (are/were) to meet in Geneva for intensive negotiations on template agreements known as modalities for trade in Agriculture and Industrial products. So too (are/were) 3 South African Ministers. Non Governmental Organisations (are/were) also expected to be observers in the negotiating process. He added that this kind of exposure in terms of members training is imperative to the understanding of and decision- making process regarding trade negotiations within the World Trade Organisation.
SOUTH AFRICA’S AGRICULTURAL AGENDA SEEKS TO ADDRESS THE FOLLOWING ISSUES • High levels of domestic support (subsidies), which relates to real support given by governments to their farmers and other role players that tend to distort trade. • Unfair export competition – mainly export subsidies and export credit schemes. • Improving access to markets for SA agricultural goods in other countries by reducing levels of tariff and other forms of market protection. • Ensuring that the trade policy space addresses the development needs of developing countries.
Mr. Carim explained that not all tariff reductions were good for South Africa, because of SA’s membership in the Southern African Customs Union. South Africa is classified as a developing country which changes the tariff structure for South Africa. Agriculture is seen to be the key to progress in the negotiations and the establishment of the NAMA 10 is critical to the negotiations.
Mr. Swart added that modalities regarding commitments (are/were) imperative at this/that) stage and that certain outstanding issues relating to subsidies should be agreed to.
Monday, 26 June 2006 Presenter: Mrs. Maria Perez Esteve, Counsellor, WTO External Relations Division. Subject: Agriculture
The agriculture issue dates back to the formation of the WTO, successor to the General Agreement on Tariffs and Trade (GATT) which did not feature agriculture as an issue. With the establishment of the WTO, agriculture was for the first time subjected to multilateral trade rules. Distortions regarding agriculture have come about especially where the United States and the European Union are concerned. These distortions created in international trade are caused by domestic protection and government subsidies in favour of US and EU producers. This is to the detriment of efficient developing country producers. The US and EU subsidises to approximately $300 billion per year and developing countries are unable to do this.
A solution to these inequalities would be to revisit the following pillars: • Market access: tariffs/ quota’s/ safeguards. • Export subsidies: reduction thereof. • Domestic support: rectifying trade distortions. • Amber box - distorts, causing oversupply. • Blue box distorts - but less because production is limited. • Green box – no/ minimal distortion.
Monday, 26 June 2006 Presenter: Mrs. Vivienne Liu, Counsellor, WTO Environment Division. Subject: Environment
Mrs. Lui informed the members that the GATT (had made) provisions for the protection of the environment. During the 1970’s, momentum. was gained in terms of environmental issues; however a concern was raised with members using the protection of the environment to impose trade barriers and trade laws.
At the Uruguay Round of the WTO a preamble was established in reference to WTO Agreements for the protection of the environment. At this same round members agreed to the establishment of a Committee on Trade and Environment. However it is important to note that the WTO does not set rules relating to environmental issues. It only relates to trade affiliated to environmental issues. Also, the WTO supports organisations protecting the environment and tries to co-operate with member organisations in terms of trade liberalisation and environmental issues. Thus the WTO addresses trade issues impacting on the environment.
Monday, 26 June 2006 Presenter: Mr. Markus Jelitto, Counsellor, WTO Services Division. Subject: Services
A Services Agreement has a lifespan of 10 years. Trade in services particularly came about in 1995 with the establishment and growth of the WTO. All trade in services fall under the General Agreement on Trade in Services (GATS) Agreement. The legal structure of services comprises 4 tiers, namely: • Mode 1: Cross border supply Services delivered via telecommunications • Mode 2: Consumption abroad From one jurisdiction to another • Mode 3: Commercial Presence A state establishing a business in another • Mode 4: Movement of natural persons Contracting in a state for a limited period in order to deliver a service
There are 2 exceptions contained in the GATT, namely: • Government Services: Service not supplied on a commercial basis and not in competition with other services • Air transport: Traffic rights of airplanes/ company
All sectors are open to be Most Favoured Nations (MFN). During 1991 the WTO Secretariat developed in terms of Service Sectors. Nations are entrusted to determine which service sectors they would liberalise, from a schedule they develop.
Tuesday, 27 June 2006 Presenter: Mr. Guy Evans, Counsellor, WTO Rules Division. Subject: Rules
Rules address what is wrong in the market known as “non market behaviour”. These may include dumping, subsidies and safeguards. The WTO has to be notified about an action taken by a country against another company.
• Dumping: An Agreement is established regulating what the government should do regarding this, namely an, Anti Dumping Agreement. Even though dumping is not illegal, the importing country has the right not to accept the goods. Thus if there is an injury to the domestic market or cause, anti dumping measures may be taken. Dumping occurs when the export price is less than the home value price. Thus if dumping is identified, the investigating authority has to show cause and injury to the domestic industry of the same product. These constitute three elements, namely:
1. volume 2. price effects of dumped imports 3. consequences/ impact• Subsidies: When they cause trade distortions
• Safeguards: Must show significant increase in imports causing serious injury to the domestic industry instead of proving unfair trade practices. It is non discriminatory and action is taken against all trade partners. Thus there is no favourite nation approach. Compensation is allowed.
Measures to redress dumping:
- increasing the customs duty
- imposing a variable duty
-
imposing a fixed duty Final measures may run for years up to 5 years. Measures to redress safeguards 1. duties 2. quotas 3. tariff quota
Tuesday, 27 June 2006 Presenter: Mr. Jorge Castro, Counsellor, WTO Legal Division. Subject: Dispute Settlement
The role of this Division is to provide advice, support, training and technical assistance to member states. Dispute settlement under the GATT needed transformation because during the GATT period panels would comprise the disputing parties and a third party investigating the dispute. The Dispute Investigation report concluded after findings had to be agreed upon by means of consensus. However this was problematic as a respondent may not adopt the report (veto it). Thus stronger players were able to block the adoption of the report. It was at the Uruguay Round that a decision was taken regarding the process of dispute settlement, in a sense to correct the system. The process of Dispute Settlement would be as follows:
• Consultations (bilateral negotiations with disputing parties / 60 day period) • Panel and Appellate body established • Adoption of the panels report • Implementation of the decision (bilateral/multilateral)
The objectives and basic principles underlying dispute settlement:
- The efficient and effective resolution of trade disputes.
- Securing compliance with WTO Covered Agreements.
- Preserving the rights and obligations of members under WTO Covered Agreements.
Panels and the Appellate Body are not tribunals. They produce reports, not judgments. Their reports have to be adopted by the Dispute Settlement Body to have any legal value, as the Dispute Settlement Board formally controls Dispute Settlements. However, reports do not create binding precedents. Members are the only ones who may adopt interpretations. Facts and Figures until June 2006 relating to dispute settlements are as follows:
• 346 disputes (requests for consultations). • 140 panels established (currently 8 are active). • 102 adopted panel reports. • 71 appeals notified. • 66 adopted Appellate Body reports. • 17 reports on implementation (12 appeals). • 24 arbitrations on reasonable period of time. • 7 authorisations on suspension of concessions.
Tuesday, 27 June 2006 Presenter: Mr. Jean – Pierre Lapalme, Counsellor, WTO Market Access Division. Subject: Non- Agricultural Market Access (Nama)
Nama 10 constitutes: Argentina, Venezuela, Brazil, Egypt, India, Indonesia, Namibia, Philippines, South Africa and Tunisia Existing provisions of market access is that it is regulated through border measures most of the time. Market access refers to government imposed regulations or measures at the border. Market access should be predictable, making it binding, as well as non discriminatory in terms of national treatment and no less favourable in respect of most favoured nation. Of importance is the fact that market access should grow, which is the reason for the round of negotiations. Generally quantitative restrictions are prohibited but can be allowed under certain circumstances, for example tariffs and non – tariff barriers.
• Tariffs: these essentially refer to import tariffs (no taxes, fees or charges). They comprise different types of duties namely ad valorem /specific/ compound (+) /mixed. Tariffs should be transparent by means of schedules where duties are bound, even though applied rates are often lower than bound rates. Bindings can be modified, that is concessions can be withdrawn. However this is difficult in terms of procedure and costly in terms of compensation. • Non – tariff barriers: No agreed definition and includes in principle all measures other than tariffs used to protect a domestic industry. It usually refers to the regulations imposed by government and many of the non-tariff barrier measures imposed are based on a legitimate goal, and protection of the environment or national security. The current status of market access in terms of Nama is that the textiles and clothing sectors have returned to normal WTO rules after ten years (guided under separate rules) of agriculture textiles and clothing (ATC). This transpired after the Uruguay Round. Special provisions in terms of safeguards have been made with respect to China. Higher tariffs have been set in the following sectors namely, textiles and clothing, leather, rubber, footwear, travel goods, transport equipment, fish and fish products. There is currently an increase of Free Trade Areas and Customs Union Agreements. So too in terms of duty free trade.
As far as the Doha Negotiation goes, negotiations will aim to reduce or (as appropriate) eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs and tariff escalation as well as non-tariff barriers. Particularly on products of export interest to developing countries. Product coverage should be comprehensive and without prior exclusions. Negotiations are to fully take into account the special needs and interest of developing countries as well as the least developed countries, including the less than full reciprocity in reduction commitments. Thus the modalities agreed to will include appropriate studies and capacity building measures to assist least developed countries to effectively participate in the negotiations.
Wednesday, 28 June 2006 Presenter: Mr. Paulo Estivallet de Mesquita, Counsellor, Permanent Mission of Brazil
South Africa has taken the lead amongst the Nama 10. South Africa faces some challenges as the leader as: 1. Members have common interests. 2. Members have to decide to what extent each one goes regarding negotiations. 3. Some members are defensive, others offensive regarding Agriculture. So far no decision has been taken and South Africa should actually define the limits of what is acceptable. Negotiations will be of a high level nature as Ministers and Deputy Ministers will be present. The Nama 10 should stick together and the stepping up by the DTI is commendable. It will be unfortunate if this round fails as it will leave developing nations in difficulty. Wednesday, 28 June 2006 Presenter: Ambassador Ujal Singh Bhatia, Ambassador, Permanent Mission of India
The Ambassador informed the members that India and South Africa are good partners, especially with the inception of the India, Brazil, and South African (IBSA) partnership. This group has given these developing countries a strong voice. It is also a regular forum for exchange. The Ambassador complemented the South African Mission in Geneva as well as South African Ministers in their articulation of issues and progress made. He added that it was 5 years since Doha and it now was the crunch time as it is the final year for finalising negotiations, and an understanding should be reached by end July for negotiations to proceed. The negotiations will thus feature the developing round addressing the needs of the developing nations as the status of negotiations.
Agriculture, which is a hot topic, will be featured as it is grossly distorted in terms of the support farmers from developed nations receive regarding their domestic products and the subsidies received for the exports. For example, sugar and cotton are subsidised up to a third in the US and 68% in Switzerland itself. The G20 negotiating team will feature as a main priority. It is important because developed countries are reluctant to provide flexibilities. The second hot topic is industrial tariffs in terms of how much and what type of flexibilities are offered to developing nations. Finality on this is still outstanding. Services will also be discussed. However South Africa has not been very aggressive in this regard.
The needs of developing countries have to be addressed because developing countries constitute three quarters of the WTO, which attests to the fact that they should be heard.
Thursday, 29 June 2006 WIPO Headquarters WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO)
Mr. Onyeama was grateful for the opportunity to host the delegation. He added that it was a pleasure to engage policy makers instead of technical experts continually. South Africa was very much involved in WIPO and in terms of the African Region comprises 2 organisations, namely:
1. African Regional Property Organisation (English speaking African
countries based in Harare)
2. African Intellectual Property Organisation (based in Cameroon)
These regional organisations were established, as there was a need to
harmonize the law of creative work. The following are challenges
Africa faces:
Granting patents in Africa are low, thus an incentive in the region is
required.
Underdevelopment is a real crisis, thus assisting and promoting Africa
is an objective.
It is therefore imperative that appropriate laws lead to an enabling
environment and laws needed to assist inventors and businesses are
required. African countries are therefore engaged to develop strategic
plans regarding intellectual property. This was done by developing a
profile of intellectual property by means of surveys submitted to
businesses, government institutions universities and SMMEs. The
objective of data revealed why intellectual property was not being
utilised. This information led to the creation up of approximately 40
Committees to bring about training programmes and their aim was to use
the data in order to develop a strategic plan for each country to
implement. The strategic goal would be inline with those of WIPO which
essentially are the following:
(a) Promotion of an IP culture; on the one hand, to encourage
creators and innovators to obtain, use and license IP rights and
assets, and, on the other hand, to seek greater respect by the
public for IP rights and assets. This will include making
resources and expertise available to assist Member States in
their own efforts to develop an IP culture through cooperation
with governments, intergovernmental organizations and partners in
private sectors.
(b) Development of balanced international IP laws which are:
responsive to emerging needs; effective in encouraging innovation
and creation; and sufficiently flexible to accommodate national
policy objectives.
(c) Provision of consistent and customized assistance to Member
States in developing national/regional IP systems, including
legal infrastructure, institutional framework and human
resources.
(d) Enhancement of global protection systems to make them more
easily accessible and affordable to all stakeholders, in
particular.
(e) Further streamlining of the management and administrative
processes within WIPO to intensify efforts to achieve greater
efficiency as well as the initiation of improved monitoring and
evaluation systems to examine the achievement of expected
results.
The ultimate goal here is for government to validate and adopt the
strategic plan as developed for them specifically. Mechanisms will be
put in place for its success in each country. Five countries have been
selected for the audit and SA is one of them, even though South Africa
did not complete it. It is anticipated that with the collaboration of
the Department of Science and Technology intellectual property will be
developed in South Africa. What is foreseen are intellectual
creations.
WIPO was established in the 1970’s with 183 members as an
intergovernmental organisation. It served the purpose of promoting
protection for members even though members were not obligated to sign
all treaties. It facilitates the patent process for its members and
promotes their services to industry and the private sector alike. It
offers registration as well as renewal of trademarks as one of the
major services. Also, mediation and arbitration, if necessary. 91% of
WIPO income is generated from services and 7% comes from members. Its
General Assembly meets once a year during September. WIPO employs 915
staff members from 94 different countries.
In terms of Traditional Creativity and Cultural Expression,
expressions of folklore also fall under the ambit of WIPO. It serves
to offer protection against misappropriation, including misuse, abuse
and copying. Examples of these include the Hoodia plant used by the
San people and Ndebele Art. Policies have been developed to
investigate these types of matters, and institutions assisting in the
investigations include, UNESCO, The African WIPO bodies and human
rights organizations. Issues pertaining to these are whether or not
additional protection should be offered to these communities who have
founded the traditions, should there be communal rewards offered for
the new copyrights and to which extent is originality rewarded.
Currently the programme is nine years old, a process of fact-finding
is being pursued in SA regarding the San and the Hoodia plant, an
intergovernmental committee has been established and a draft has been
developed. It is now up to member states to respond by 31 July 2006
regarding provisions in the draft. These all relate to the kind of
outcome that will ensure a treaty or law as well as the content and
time frames.
In terms of Intellectual Property (IP) and new technologies, patent
drafters are not available in African countries or developing
countries. However South Africa has the capability to strategise this
policy. It is important because if you own intellectual property
rights, royalties are paid. The challenge for the developing world is
then to use intellectual property; to make it do-able and brace the
intellectual property divides. Intellectual Property should be
integrated with Science and Technology especially for South Africa to
advance on this. If you are the owner of intellectual property you are
able to reap economic rewards.
Trademarks and Industrial design is registered with WIPO. The
Singapore Treaty related to this has recently been adopted. South
Africa is a member of the Standing Committee on trademarks. An example
of this is the geographical agreement between South Africa and the EU
regarding “Champagne”. The Hague Treaty on Industrial Design also
governs industrial design.
The WIPO has a World Wide Academy created in 1998. It offers training
for member states. During 2002 – 2005 it trained 921 participants. The
policy development portion provides a forum for sharing information
and training to government officials, decision makers, policy
advisors, law enforcement officials, judges, professors, diplomats and
the general public. 2949 people were trained in policy development
during 2000 – 2005. A program for diploma/degree in IP has been
designed. WIPO – UNISA have embarked on a joint Diploma in IP and
these distance learning have positive outputs such as being cost
effective, flexible, attracting large audiences, specialisation and
customisation, state of the art information and a core faculty of
tutors.
Intellectual Property is definitely a wealth generator. For this to be
effective law reforms and effective development need to be addressed
and these are contingent upon the appropriate development of
individual countries. The challenges faced here are the types of
assistance needed by the WTO in terms of IP, technological transfers
from developed to the developing nations and tangible decisions to be
taken.
The Standing Committee on Copyrights and related rights protects the
creator of the work. There is a steady increase in development in this
area, nationally as well as in civil society. The potential of the IP
sector will be approximately $3 Trillion by 2020. One major challenge
faced here is the evolvement of digital – it gives good quality but
has increased piracy. It is estimated that between 400 000 – 600 000
films are down loaded daily. To assist with this, a sound regulatory
framework amongst members is envisaged with sound enforcement regimes.
Education increased capacity building and facilitating trading of
rights through cost effective easy licensing practices. To this effect
various Conventions have been signed.
There has been recent awareness of the economic value of patents.
These have been displayed in civil society, the political and social
arena. There has been an increase in the demand for international
patents and an increase in the quality of patents. Patent Agreements
currently under review include the Patent Co-op Treaty, Patent Law
Treaty and Draft Substantive Patent Law Treaty. Of importance is the
alignment of organisations around this especially the WIPO/ WTO/ WHO
and their aim is to produce a better quality of patents, an efficient
system and increasing the accessibility to the system.
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)
Mrs. Lakshmi Puri, Director: International Trade Division.
COMMODITIES
Commodities metals in particular as well as minerals and energy and
agriculture play an important role in the SA economy. Four clusters
have been identified in this area:
• UNCTAD in collaboration with the World Bank has provided support
in setting up the Intergovernmental Forum on Mining, Minerals,
Metals and Sustainable development – an extension of the
initiative started at the 2002 World Summit on Sustainable
Development (WSSD). The objective of the forum is to enhance and
promote the contribution of the mining, minerals and metals sector
to sustainable development. The forum provides governments with a
framework in which to discuss the opportunities provided by theses
sectors and to respond to the challenges they pose. Thus far two
partnerships were implemented, one in South Africa and the other
one in Canada.
• UNCTAD developed different tools to link commodity information and
knowledge management as well as to monitor commodity market trends
and prospects. The main aim of the programme is to enhance global
market transparency and provide users with information on key
commodity sectors. In this context, exchanges of information and
data have, inter alia been initiated with the Department of
Minerals and Energy of South Africa. South Africa is respectively
the first and second world leading producer of platinum and
palladium and these sectors have been included in the coverage of
the programme. Other commodities such as nickel, zinc, iron ore,
wheat and maize are also available. Furthermore, additional
sectors of interest to SA such as diamonds, gold and copper will
be analysed and included in UNCTAD Infocomm portal in the near
future.
• UNCTAD has supported the development and the functioning of the
commodity futures exchanges and has co-operated with the South
African Futures Exchange (Safex) which is part of the JSE. In
particular, UNCTAD and Safex organised different events in
collaboration with the Swiss Futures and Options Association and
the Association of Future Markets (an association representing the
interests of emerging exchanges) to facilitate the sharing of best
practices as well as stimulate the information flows and South-
South collaboration.
• In the domain of energy, UNCTAD has collaborated with civil
society in South Africa and particularly with the national oil
company Petro SA as well as other major players like Engen and
SASOL. These companies have been substantive and financial
contributors, by means of sponsorship to UNCTAD energy activities,
including the yearly African Oil and Gas Trade and Finance
Conference which is the principle experience-sharing forum on the
African Energy Industry. The role of South Africa in the
technology of gas to liquid and synthetic fuel has been one of the
successful experiences discussed during these events. Similarly
UNCTAD has also co-operated with the banking sector, namely ABSA
Bank and Pivot Capital Partners, through knowledge and experiences
sharing in the field of commodity finance as these banks are
considered to be pioneers in this area.
BIOTRADE
• In Southern Africa – Botswana, Malawi, Namibia, South Africa,
Zambia and Zimbabwe – the Bio Trade Facilitation Programme (BTFP)
is supporting Phyto Trade Africa – a trade association with
membership populated by private sector and NGO working on product
development of species native to Southern Africa.
• UNCTAD has supported Phyto Trade with grants of over US$ 300 000
aimed at financing applied research and development, as well as
trade promotion efforts, product development and market access
strategies. Co-operation is also taking place on the issue of the
EC Novel Food Regulation, which constitutes a serious hurdle for
the kind of exports that Phyto Trade Africa aims at promoting.
• As a result of the support of UNCTAD and other funding agencies,
PhytoTrade has negotiated various business partnerships with
companies in South Africa and France. It has submitted to the EC
Commission a request for registration as Novel Food of an African
species. It is recognised by the Southern African Customs Union
(SADC) as a centre of excellence on biodiversity. The activities
of the Phyto Trade are resulting in trade of natural ingredients
which generates income for poor communities living in remote areas
of Southern Africa.
NEW and DYNAMIC AREAS
• UNCTAD in collaboration with the United Nations Development
Programme (UNDP) African Trade Project will be organising a two
day regional conference (19 – 20 July) on one of the
technologically advanced new and dynamic sectors of world trade,
namely the electrical and electronic sector.
• The regional conference will bring together African policy makers
(Ministries of Trade and Industry/Finance) from 11 countries. The
countries are South Africa, Botswana, Mauritius, Lesotho,
Swaziland, Namibia, Zambia, Malawi, Zimbabwe, Mozambique and
Tanzania. SMME in the region, UNCTAD, Philips and donor countries
will discuss practical issues related to the participation of
Southern African countries in production/trade in electrical and
the electronic sector.
• The aims are to clarify policy issues that governments of the
region have to tackle to improve the business environment
including regional co-operation.
• Find potential opportunities for Southern African countries to
establish business in light bulb production with Philips.
• Improve, within a relatively short time-frame, supply capacity,
competitiveness and market access related to these products in the
Southern African region.
COMPETITION POLICY
• A seminar for judges and public prosecutors on the enforcement of
competition law as well as a training course on investigation and
evidence gathering on competition cases will be offered.
• A draft agreement for regional competition policy has been
designed for member states of the South African Customs Union
(SACU) which was adopted by Ministers in 2005.
TRADE NEGOTIATIONS
• Assistance was provided to a number of national assessment studies
undertaken in the context of the regional integration in the SADC
region.
ANALYTIC TOOLS
• About 100 users from South African institutions, including
government, universities, and research institutes are actively
benefiting from the database and simulation tools.
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)
Mr. Kamran Kousari, Special Co-ordinator for Africa: Division on
Globalisation and Development Strategies.
Mr. Kousari explained that the Development of Africa has been on the
Agenda of this particular office since 1997. A report (Economic
development in Africa) is published annually. Various studies have
been completed regarding Africa’s economic/ trade and commodity
status. Steadily agriculture has decreased and this obviously has
increasing financial implications. For Africa diversification has been
very difficult. As a result, this particular office instigated the
writing off of Africa’s debt, especially as Africa had paid up its
debt minus the arrears on interest.
An impact study done on Foreign Direct Investment (FDI) on Africa
showed that only 3% of total FDI are received in the minerals and
metals category. Restructuring in terms of African policy- making
should mean that national policies should be custom made, especially
in Africa. Poverty has risen in recent years and this is only
prevalent in African nations. A report entitled “Aid for Africa” is
due to be available shortly. This report refers to the UN Millennium
Goals for 2015 and doubling aid to Africa. This addresses debt relief
in Africa, the question remains when. In order to reduce poverty by
half in 2015, an 8% growth rate for all African countries is required.
This is not foreseeable. Aid driven growth has not been working
either, such as in Tanzania, Mozambique and Angola. A change of macro
economic policy at national level is necessary to assist in positive
growth for poverty reduction. Rebuilding state institutions is
imperative, even though structural adjustment policies destroyed
institutions across Africa. African states need to address the
following issues:
• Diversification
• Debt
• Official Development Assistance (ODA)
5. CONCLUSIONS
• Multilateral negotiations are imperative to government departments
and civil society. Thus training in this regard are imperative to
members of the Portfolio Committee on Trade and Industry. There is
a synergy between the departments of Foreign Affairs, Agriculture
and Trade and Industry and Parliamentary Committees regarding
multilateral relations. Obtaining clarity on the stance South
Africa takes on WTO related issues will assist members in their
understanding of their roles as policy makers. The South African
Parliament has the ability to assist with the work done at the WTO
and for this reason members should receive this type of training in
exercising their duties more efficiently.
• The Portfolio Committee on Trade and Industry would embark on a
training programme with the WIPO Academy and follow–up training for
members is required with the WIPO Academy.
6. CONTRIBUTORS
Mr. Faizel Ismail, DTI -SA Mission
Mr. Xavier Carim, DTI
Mrs. Maria Perez Esteve, External Relations Division, WTO
Mrs. Vivienne Lui, Environment Division, WTO
Mr. Markus Jelitto, Services Division, WTO
Mr. Guy Evans, Rules Division, WTO
Mr. Jorge Castro, Legal Division, WTO
Mr. Jean – Pierrre Lapalme, Market Access Division, WTO
Mr. Paulo Estivallet de Mesquita, Mission of Brazil
Ambassador. Ujal Singh Bhatia, Mission of India
Mr. Jeffrey Onyeama, Economic Development Bureau for Africa, WIPO
Mr. Pushpendra Rai, IP and Economic Development, WIPO
Mr. Guriqbal Jaiya, Small and Medium sized Enterprise, WIPO
Ms. Cynthia Cannady, IP and New Technologies, WIPO
Ms. Carole Croella, Copyrights and Related Rights and Industry
Relations, WIPO
Mr. Marcus Hopperger, Trademarks, Industrial Designs and Geographical
Indications, WIPO
Mrs. Martha Chikowore, Worldwide Academy and Human Resources, WIPO
Mr. Philippe Baechtold, Patent Law, WIPO
Mr. Wend Wendland, Traditional Knowledge, WIPO
Mrs. Lakshmi Puri, International Trade, UNCTAD
Mr. Kamran Kousari, Globalisation and Development, UNCTAD
TUESDAY, 24 OCTOBER 2006
TABLINGS
National Assembly and National Council of Provinces
- The Minister of Labour
Report and Financial Statements of the Local Government Sector
Education and Training Authority (LG-Seta) for 2005-2006, including the
Report of the Auditor-General on the Financial Statements for 2005-2006
[RP 79-2006