TUESDAY, 11 SEPTEMBER 2007 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:05.

The Deputy Speaker took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see col 000.

                          NOTICES OF MOTION

Ms D KOHLER-BARNARD: Deputy Speaker, I hereby give notice that on the next sitting day of the House, I shall move:

That the House –

 1) strongly expresses its objection to the high-handed and
    inappropriate arrest by the SA Police Service of the Leader of the
    Official Opposition, Helen Zille, over the weekend, for taking a
    firm stand against drug activity while the SAPS fails to take proper
    action against known drug dealers in the same area; and
 2) is of the opinion that this inconsistency of action brings the
    criminal justice and law-enforcement institutions of this country
    into international disrepute and has irreparably damaged South
    Africa’s reputation.

Dr S M VAN DYK: Adjunkspeaker, graag gee ek hiermee kennis van die volgende voorstel:

Dat die Raad ’n debat voer oor die swak sekuriteitsituasie ten opsigte van SAL-passasiersbagasie, wat daartoe gelei het dat 9 000 diefstalle uit SAL- bagasie die afgelope twee jaar plaasgevind het. (Translation of Afrikaans notice of motion follows.)

[Dr S M VAN DYK: Deputy Speaker, I hereby give notice that I shall move:

That the House debates the poor security situation in regard to the luggage of South African Airways passengers that led to 9 000 thefts in the past two years from SAA luggage.]

      DEATH OF SCHOOLCHILDREN IN CAR ACCIDENT IN PORT ELIZABETH

                         (Draft Resolution)

Mr T D LEE: Madam Deputy Speaker, I move without notice:

That the House –

(1) notes with profound sadness the death of at least six children from Triomf Primary School and Sanctor Primary School in a car accident in the northern areas of Port Elizabeth in the Eastern Cape on Monday, 10 September 2007;

(2) further notes that a further 14 children were injured in the accident;

(3) acknowledges the tragedy of the loss of the young lives that ranged between the ages of 7 and 15;

(4) conveys its condolences to the loved ones of those who died as well as the learners and staff of Triomf Primary School and Sanctor Primary School and the community of the northern areas of Port Elizabeth; and

(5) wishes the children who were injured in the accident a speedy recovery.

Agreed to.

         ETHIOPIA CELEBRATING THE DAWN OF THE NEW MILLENNIUM

                         (Draft Resolution) Mr L W GREYLING: Deputy Speaker, I move without notice:

That the House –

(1) notes that the people of Ethiopia are today celebrating the dawn of the new millennium;

(2) notes that this is due to the fact that Ethiopia still follows the orthodox Julian calendar which is seven years and eight months behind the Gregorian calendar;

(3) congratulates the government and the people of Ethiopia and wishes them well in their celebrations of the new millennium; and

(4) notes that, as the seat of the African Union resides in Ethiopia, this celebration also represents the dawn of a new millennium for the entire African continent.

Agreed to.

             Congratulations to parliamentary rugby team

                         (Draft Resolution)

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

That the House –

 1) notes that –


    a) from 1 to 10 September 2007 some of our Members of Parliament
       and staff took part in the parliamentary Rugby World Cup in
       France; and


    b) our parliamentary rugby team won all three of their games and
       became second best after the New Zealand parliamentary team on
       points difference;

(2) believes that the participation of our parliamentary team in the event has contributed in the effort to deepen the bonds of human solidarity; and

(3) congratulates the parliamentary rugby team on their splendid effort.

[Applause.]

Mr P A C HENDRICKSE: Are they in the House, Madam Deputy Speaker?

The DEPUTY SPEAKER: Who is addressing me? [Laughter.]

Mr P A C HENDRICKSE: Madam Deputy Speaker, I wanted to know if these victorious rugby players are in the House. [Interjections.]

The DEPUTY SPEAKER: I am still addressing this motion and any excitement related to it will come after I have concluded this address. [Laughter.] It is not that I am not one of the people who are excited, by the way. Obviously, there are no objections to this motion.

I may now listen to the points that you wanted to raise, sir.

Mr P A C HENDRICKSE: My most humble apologies, Madam Deputy Speaker.

The DEPUTY SPEAKER: Thank you.

Mr P A C HENDRICKSE: I wanted to know if these victorious rugby players were in the House today or some of them, at least, so that we can see who they are. [Applause.]

The DEPUTY SPEAKER: Hon members, I, together with the Speaker and the Deputy President, managed to be with these hon members and the staff members when they were on their way out of the country. They were all sending messages through SMS to the Deputy Speaker whilst I was in the country. I was following all their matches and I also understand why New Zealand got what they did but I am told that our parliamentary team was the best. I think they need another round of applause. [Applause.]

Agreed to.

 Congratulations AND GOOD WISHES TO NATIONAL CRICKET AND RUGBY TEAMS

                         (Draft Resolution)

Mr T D LEE: Madam Deputy Speaker, I move without notice:

That the House –

(1) notes that the ICC World Twenty20 Championship begins today, 11 September 2007;

(2) further notes that South Africa will be opening the tournament by playing against the West Indies at the Wanderers stadium;

(3) congratulates the South African team on their eight-wicket victory over Australia in a warm-up match on Sunday, 9 September 2007;

(4) further congratulates the Springboks on their 59-7 victory against Samoa in their first Rugby World Cup match on the same day;

(5) recognises that our national sports teams’ victories unite the country, bringing all South Africans together; and

(6) wishes both our national cricket and rugby teams well in their upcoming matches.

Agreed to.

                       CO-OPERATIVE BANKS BILL

                       (Second Reading debate)

The DEPUTY SPEAKER: Order! Before we proceed, we have in the gallery a group of school learners from Italy and from Parklands College in Cape Town. We want to welcome them warmly to the National Assembly. [Applause.] You may rise so that the members can see you. Welcome! [Applause.]

The MINISTER OF FINANCE: Deputy Speaker, I am curious to know why you made the statement you did about the New Zealand rugby team but I won’t go there. [Laughter.] Deputy Speaker, hon members, the Co-operative Banks Bill, 2007, seeks to create an appropriate regulatory framework for member-based deposit-taking financial services co-operatives. By creating a sector-specific regulatory framework, this Bill also seeks to promote and advance the social and economic welfare of South Africans by enhancing access to banking services under sound and sustainable co-operative banks.

Co-operative banks will be divided into three tiers, namely primary co- operative banks, which will comprise the savings as well as savings and loans co-operative banks, a secondary tier which will be established by two or more primary co-operative banks; and thirdly, tertiary co-operative banks, which can be established by two or more secondary co-operative banks.

This Bill is one of government’s initiatives to promote access to financial services, particularly for the most vulnerable people who are characterised by low incomes and a lack of access to mainstream financial services. It is part of a broader strategy for promoting access to financial services in addition to the financial sector charter and the Mzansi initiative.

In 2004, the financial sector launched the financial sector charter, which culminated in some innovative initiatives to promote access to financial services. The most prominent of these initiatives is a “no-frills” basic bank account, popularly known as the Mzansi bank account. According to the Banking Association of South Africa, over three million Mzansi accounts have been opened in the three years following the launch of the financial sector charter. According to the FinScope 2006 survey, at least 49% of the adult population in South Africa still does not have access to banking services. This implies that, last year, 15,27 million members of the adult population was unbanked.

While noting the major achievements made by the commercial banks in providing banking services to the previously excluded sections of our community, it must be pointed out that the problem of access to financial services is too large to be tackled by commercial banks alone. Community participation and some government intervention is required if this initiative is to succeed.

It is important to note that the Co-operative Banks Bill is not proposing a new concept but seeks to formalise an old international tradition of institutionalised self-help practices. Co-operative banks have been in existence for centuries and are very successful in countries such as Germany, Australia, the United Kingdom, the United States, India, Brazil, Tanzania, Uganda and a number of others. In countries where they exist, these co-operative banks have been successful because of deliberate government policies to support and advance their cause, but also because of an existing dedicated regulatory framework.

Since 1998, financial services co-operatives, credit unions and village banks have been operating under an exemption from the mainstream Banks Act. The implications of the exemption notice and the absence of sector-specific legislation for these community-owned banking institutions are, firstly, a lack of protection for the deposits invested in such institutions and, secondly, an exclusion from the lender-of-last-resort facilities. Under an exemption regime, and in the absence of formal regulation and protection afforded in the lender-of-last-resort facilities, the public confidence in these institutions is hugely compromised.

The Co-operative Banks Bill seeks to correct this suboptimal and temporary regulatory arrangement by providing for formal regulation and supervision of co-operative banks, creating a development framework to be implemented through a Development Agency for Co-operative Banks and providing for the establishment …

The DEPUTY SPEAKER: Order! Vhudziki [Calm down], hon members! Please. Please continue, sir.

The MINISTER OF FINANCE: … of a deposit insurance fund aimed specifically at protecting the registered co-operative banks.

The Bill was intensely debated in the National Economic Development and Labour Council and extensive consultations with other relevant stakeholders were carried out. Comments were received from a wide array of groups and associations, including the Congress of South African Trade Unions, the Banking Association of South Africa, the Savings and Credit Co-operative League of South Africa – represented in the gallery as well - the Business Parliamentary Office, the University of Pretoria, the Competition Commission and the South African Reserve Bank, amongst others. Judging from the substance of the comments received, the Bill was generally well received.

I would like to thank all the members of the community who took time to engage with the National Treasury during the consultation periods and all those who sent through useful comments. I would also like to thank the Portfolio Committee on Finance and its chair, the hon Nhlanhla Nene, who will speak after me, for interrogating the Bill and helping to sharpen it. As members would be aware, a number of very useful amendments were brought about by the hearings of the portfolio committee.

Deputy Speaker, I hereby request the House to support the Co-operative Banks Bill, 2007. Thank you. [Applause.]

Mr N M NENE: Madam Speaker and hon members, in his book, Banker to the Poor, Nobel Peace Prize winner and founder of the Grameen Bank, Prof Muhammad Yunus writes, and I quote:

As we proceed through the early days of this new Millennium, it would serve us well to strive toward the daring Millennium Developmental Goals set by the Millennium Summit of world leaders at the United Nations in June 2000. The most daring of these is an entirely achievable one: halving poverty by 2015. I am totally convinced from my experience of working with poor people that they can get themselves out of poverty if we give them the same or similar opportunities as we give to others. The poor themselves can create a poverty-free world, all we have to do is to free them from the chains that we have put around them.

He continues and says:

In order to reduce and ultimately eliminate poverty, we must go back to the drawing board. Concepts, institutions and analytical frames, the conditions that created poverty, cannot end poverty. If we can intelligently rework the frame conditions, then poverty will be gone, never to come back again. We must widen our concept of employment, ensure financial services even to the poorest person, and recognise that every single human being is a potential entrepreneur.

He wrote these words in the last chapter of his book that outlines how the Grameen banks changed the lives of the poor in Bangladesh and have grown to be a shining example of how the poor can extricate themselves from poverty, given the opportunities. This visionary championed the establishment of these community banks with the main objective of ensuring that financial services reach everybody and that the poor, if given an opportunity, can indeed rid themselves of poverty.

The ANC government, driven by the same ideals as this luminary, Muhammad Yunus, and in line with our policy of building sustainable livelihoods in communities through the establishment of co-operative societies, adds another building block through this Bill.

The Reconstruction and Development Programme, building on the Freedom Charter, clearly sets out the pillars upon which sustainable livelihoods will be built. Having built the economy and democratised the state and society, and continuing to build the capacity of the state to deliver the basic needs of the people, the remaining challenge becomes that of bridging the divide between the two economies, as they currently obtain.

This Bill seeks to advance the social and economic welfare of all South Africans by enhancing access to banking services under sustainable market conditions. It also promotes the development of sustainable and responsible co-operative banks while it establishes an appropriate regulatory framework and regulatory institutions for co-operative banks that protect members of co-operative banks.

The concept of co-operative banks addresses a fundamental developmental imperative, particularly in our young democracy that is recovering from underdevelopment and deprivation that resulted from the exclusion of our people from the mainstream economy. As espoused by Prof Yunus, there is no better way of addressing poverty than to create conditions for the poor to rid themselves of the scourge of poverty.

Our people in the villages have tried through stokvels and other means to uplift themselves but have either found themselves being victims of greed by other investors or exploited by the established financial institutions. This has been made possible because of the absence of legislation and a lack of capacity among aspirant bankers.

The Bill before us makes provision for the registration of deposit-taking financial services co-operatives as co-operative banks, if they meet the criteria; the establishment of positions of co-operative banks supervisors to ensure appropriate and effective regulation and supervision of co- operative banks and to protect members and the public interest, and the establishment of a development agency for co-operative banks whose tasks would be to develop and enhance the sustainability of co-operative banks.

This Bill also complements the Co-operatives Act of 2005 which dealt with the establishment of co-operatives which now, in terms of this Bill, can form themselves into their own banks - their own banks because there will be investors, there will be lenders and there will also be shareholders in these banks. This Bill further promotes the culture of saving that was also championed by the ANC government through the establishment of Mzansi products, which the Minister alluded to, and the statistics thereof that sought to extend banking services to the previously unbanked.

Sesiphelile isiNgisi. [Ubuwelewele.] Uma sesiphelile, phela nami ayikho into engizoyenza. Mangikusho ukuthi lo Mthethosivivinywa ungenye yezindlela uhulumeni oholwa yi-ANC oqinisekisa ngazo ukuthi abantu bakithi ababekhishwe inyumbazane ngabohulumeni bangaphambilini manje sebengabamba iqhaza elibonakalayo ekuthuthukiseni izimpilo zabo, ngasohlangothini lwezomnotho.

Lo Mthethosivivinywa wakha isisekelo okungabunjwa ngaso imifelandawonye yokongiwa kwemali, maqede labo abangamalungu ale mifelandawonye bakwazi ukubhalisa njengebhange elingelabo. Ukuze bakwazi ukwenza lokhu, kumele okungenani babe namalungu anga-200, futhi babe nemali okungenani eyisigidi samarandi. Kungazwakala sengathi yisamba esikhulu kanti ayinkulu kakhulu ngoba nabo baningi.

Ziningi ezinye izinkampani ezinkulu namhlanje ezaqala kanje, namuhla esezadlondlobala zaba yizikhondlakhondla. Ngenxa yomlando ongemuhle wamanye ala mabhange, lapho abantu bakithi balahlekelwa yizimali zabo khona, lo mthethosivivinywa umisa imigomo enqala ukuze lokhu kungaphinde kwenzeke. Owokuqala, owokuba la mabhange abhalise ngokusemthethweni. Lokhu kusho ukuthi abantu abalondoloza izimali zabo bavikelwe ngumthetho, futhi nebhange labo lingaphansi kweso elibukhali likahulumeni. Owesibili, ngukuqinisekisa ukuthi labo abaqokwe njengabaqondisi bangabantu abaqotho futhi abazothola ukuqeqeshwa emsebenzini wabo wokwelusa amafa abanye. Kunesakhiwo esizobizwa ngokuthi yi-co-operative banks development agency, umsebenzi waso okuzoba ukucathulisa la mabhange ukuze asimame, angaze awa.

Umgomo wesithathu ngowokuthi kuzoba nohlelo lomshwalense wabatshali zimali oluzobizwa ngokuthi yi-deposit insurance. Lona-ke luzoba yinqolobane ezogada isikhathi lapho kunezinkinga, ukuze abatshali zimali bangasali bencela izithupha njengoba sike sabona kwenzeka uma amabhange noma izinkampani ezinkulu ziwa, lapho kulamule khona uhulumeni. Kulesi sikhwama, ama-co-operative banks azokuthi ephonsa esivivaneni nohulumeni naye abe ephonsa, size sibe siyasimama-ke lesi sikhwama. (Translation of isiZulu paragraphs follows.)

[My English is depleted. [Interjections.] There is nothing that I can do when it is depleted. Let me mention that this Bill is one of the ways in which the ANC-led government is ensuring that our people, who were sidelined by the apartheid government, can now have a significant role in improving their lives with regard to the economy.

This Bill says that a foundation for the establishment of saving schemes, and its members, may register as a bank. In order to be able to do this, they must have at least 200 members and have at least R1 million as capital. This may sound like a huge amount of money but it is not since there are many of them.

There are a lot of big companies that started like this which prospered and are today giant companies. Because of the bad history of such banks where our people have lost lots of money, this Act sets out major principles so that this won’t happen again. Firstly, these banks must be officially registered. This means that people who are saving money are protected by the law and their bank is under government’s close monitoring. Secondly, it ensures that those who are appointed to the board of directors are honest people who will be trained on how to be trustees. There is a structure that is going to be called the Co-operative Banks Development Agency whose task will be to help these banks in terms of sustainability.

The third principle is that there should be insurance for the investors which is going to be called deposit insurance. This will be like a bank for insurance purposes so that, in case there is a problem, investors will not be left sucking their fingers as we have seen happen when banks and companies were liquidated and government had to intervene. In this fund, co- operative banks will invest and government will also invest until this fund is stable.]

Madam Deputy Speaker, only the caring ANC government could come up with such groundbreaking legislation that addresses the plight of the poor. The committee is satisfied that the Bill will go a long way in building a social democratic society that all of us will be proud to belong to.

UKhongolose uyaweseka lo Mthethosivivinywa. Ngiyabonga. [Ihlombe.] [The African National Congress supports this Bill. Thank you. [Applause.]]

Mr D H M GIBSON: Ngiyabonga, Somlomo [Thank you, Deputy Speaker.] South Africa has a long and interesting history with co-operatives, both formal and informal. Black and white communities in our country have been involved in co-operatives for many decades and certainly long before the advent of the democratic era.

It is not necessary to go to Kenya and elsewhere for examples. If one looks at our agricultural co-operatives that have been a stabilising factor in the rural areas of South Africa for many decades, that is one example. No doubt there have been failures as well, but South Africa has many examples of co-operative endeavours that have turned into brilliant successes.

Our building societies, for example, were owned by their investors and not by shareholders. Old Mutual and Sanlam were owned by their policy-holders. It is only in recent times that these financial institutions were demutualised with the issuing of shares and the consequential unlocking of value for all of the ordinary South Africans who had invested in those institutions. I am hoping that some of the co-operative deposit-taking institutions that we are providing for today will grow and develop into mighty South African financial institutions within the next few decades. No one should underestimate the possibilities for growth of these co-operative banks. Perhaps there is another Standard Bank, First National Bank or Nedbank taking root today. Perhaps that is what we are starting with.

The Bill itself helps us to bring some of our people into the market economy in a globalised world. Access to banking, even at a relatively unsophisticated level, is critical to the economic upliftment of our people. Those who do not have access to banking services are simply not part of a modern economy.

Of course the Bill does not provide for banking services for millions of the masses, but what it does do is cater for the thousands of co-operative members who belong to these co-operative financial institutions and it provides a regulatory framework within which co-operative banks will register and operate. It also endeavours to ensure that the men and women who entrust their modest savings to these co-operative banks will be protected far better in the future than they have been up to now.

Deputy Speaker, I want to confirm that the consultation process was well and thoroughly conducted and our Portfolio Committee on Finance hearings were both comprehensive and virtually unanimous in support of the principles and the aims of the Bill. There might have been some wording differences here and there with some of our witnesses, but this was in all respects almost a unanimous effort. I’m glad that Mr Nene has reassured us that this is firmly in line with ANC policy and that is why it was introduced. I may say it is firmly in line with DA policy and that is why we are very happy to support it. Thank you.

The DEPUTY SPEAKER: Order! The hon N Singh. This will be the hon member’s maiden speech.

Mr N SINGH: Phini likaSomlomo, ngiyabonga. Phini likaSomlomo, abahlonishwa, ngiyaxolisa ukuthi namhlanje inkulumo yami izoba yisiNgisi – ulimi luka- George. [Thank you, Deputy Speaker and hon members. Deputy Speaker, I am sorry that today my speech is going to be in English, the language of King George.]

Madam Deputy Speaker, hon members, it is indeed a great honour for me to deliver my maiden speech in the National Assembly today. I would like to thank the president of the IFP, the hon Dr Buthelezi, and my party for giving me this opportunity to represent the voters.

Madam Deputy Speaker, co-operatives are not a new phenomenon in South Africa, having been used in the past to pool the resources of especially the agricultural community and farmers. Together with targeted state support, these co-operatives formed the backbone of many a farming community in the past and still continue to do so.

The IFP welcomes the introduction of a regulatory framework for co- operative banks, which has been provided for in the Bill. There are millions of South Africans that are still unbanked by the commercial sector and bringing co-operative banks into the regulatory system would provide such citizens with another avenue to access financial services they need for development.

We also support the Bill because it will protect the interests of … [Interjections.]

The DEPUTY SPEAKER: Order, hon members. We can do better than that for a maiden speech, please.

Mr N SINGH: We also support the Bill because it will protect the interests of members of co-operatives and should unleash their true potential, especially for rural development. Protection is particularly important as some of the communities that will benefit are extremely poor and underdeveloped and have low levels of financial literacy.

The IFP has long been a champion of self-help and self-reliance, and co- operatives provide an ideal opportunity for especially rural communities to pool their resources for development and upliftment. Such communities can now also gain access to a range of financial services that could be provided by co-operative banks.

We further welcome the creation of the Co-operative Banks Development Agency to support co-operative banks. This support will take the form of training, auditing and general support with compliance within the law. The agency, we were told in the committee, will be funded by Treasury to the tune of some R25 million in the first year and will be staffed by about 40 specialists. The development role of the agency is particularly important for co-operative banks and for those that may lack the necessary skills and capacity to reach and assist rural communities.

We believe, Madam Speaker, that there is huge potential to be unlocked via co-operatives and co-operative banks. One international example is the Grameen Bank, which the hon Nene referred to.

I want to close, hon members, by reminding all of us that, in 1994, the majority achieved political emancipation but it is clear that economic emancipation still eludes vast numbers of South Africans. In our opinion, this Bill has the potential to be a step towards economic emancipation and development of the second economy. I thank you.

Mr J BICI: Madam Deputy Speaker, hon Ministers, hon members, one of the elements of the agreement that was signed during the financial sector summit held in August 2002 was the need to ensure access to basic financial services. The Minister of Finance later instructed National Treasury to draft a policy paper on co-operative banks and a co-operative banks Bill.

The current Bill states that the introduction of the Co-operative Banks Bill seeks to create a development strategy and a regulatory environment for deposit-taking financial services co-operatives. In addition, it will ensure the sound and safe management of depositor money by financial services co-operatives. This will in turn promote access to financial services for people in rural communities who have no access to formal banking services.

The Bill seeks, amongst other things, to promote and advance the social and economic welfare of all South Africans by enhancing access to banking services under sustainable market conditions. This will enable the “unbankables” to become “bankables”.

This Bill sets out the prudential requirements for co-operative banks. A co- operative bank that is unable to meet or maintain these prudential requirements must immediately report its inability and reasons therefor to the supervisor.

This Bill finally provides for general provisions, which include offences and penalties and matters relating to fair administrative action, access to records, the powers of the Minister of Finance, civil liability of directors or managing directors, exemptions from the Bill and transitional provisions. If these aims and objectives are strictly maintained, there can be no failure.

The UDM therefore supports the Bill. Thank you, Madam Deputy Speaker.

Mr S N SWART: Madam Deputy Speaker, hon Minister, this Bill, as has been pointed out, is intended to create an appropriate regulatory framework for deposit-taking second-tier and third-tier community banks. Only those deposit-taking institutions that meet the requirements and, due to size of investments, start posing a systemic risk will be registered under this Bill. Those co-operatives that do not meet the requirements, such as certain stokvels and insurers, would remain deposit-taking institutions under the existing Co-operatives Act.

Registration will depend upon ability to demonstrate sufficient human, financial and operational capacity to function competently and all banks will have to have an audit committee and a supervisory committee.

The development agency that is going to be set up will have an important role in accrediting and developing such co-operative banks and assisting them to become self-supporting. The agency will also ensure that they are able to carry out audit costs for a limited period on a case-by-case basis as well as funding premiums for deposit insurance on a reducing sliding scale. I’m sure all depositors will be pleased that there will be that insurance.

The ACDP supports this Bill as it will undoubtedly provide protection for members who deposit their funds into such banks. It will also, as has been pointed out and which we fully support, enhance and promote the social and economic welfare of citizens by encouraging access to banking services under sustainable conditions as well as encouraging a culture of saving which we undoubtedly, as a nation, desperately need.

I thank you, hon Minister, and the ACDP will support this Bill.

Mr R B BHOOLA: Madam Deputy Speaker, it is amazing that over half of the South African population is unbanked. The MF supports the accessibility that this Bill brings in terms of banking to the people, especially in respect of rural South Africa that has minimal access to banking facilities. This initiative indeed will inculcate a culture of responsibility and provide the poor in our young democracy with great opportunities to deliver themselves from the shackles of poverty.

The MF, however, is in support of giving the co-operative banks what is called in Spain a “tax holiday” by exempting them from paying tax for 10 years. We acknowledge that the bank is not set to operate as a normal banking facility but rather as a means to draw people into saving.

This Bill indeed allows for a breathing space for the co-operative banks to develop, grow and intensify their aims. However, the MF is in no way supporting the distortion of our tax base but feels that the removal of the tax burden shall assist service delivery in this regard.

We strongly support this Bill and what it is bringing to the South African people. Our nation has not been taught how to save and in a majority poverty-stricken nation it is difficult to establish a savings method.

The MF will support the Bill. [Applause.]

Mr B A MNGUNI: Madam Deputy Speaker, as outlined by the chairperson and speakers before me, in short, this Bill seeks to offer those who do not have access to finance an opportunity for such access through community, village or co-operative banks as outlined in this piece of legislation, unlike with commercial banks where the poor are regarded as high risk and thus subject to high interest rates and unequal treatment compared to the rich.

As stated in the Bill, there should be at least 200 members or more and R1 million or more worth of members’ deposits before the bank can be registered under this Bill. This might appear onerous to small and poor communities who would like to have a co-operative bank, but key to this requirement is the viability of the bank itself and, most importantly, the promotion and advancement of the social and economic welfare of all South Africans.

Clause 3 ensures that a few individuals cannot come together to form a co- operative to the exclusion of many people whose lives would be improved by a co-operative bank. Also key to the establishment of a co-operative bank are the skills required of those who will be the directors of the bank. As the Bill states, every member of the co-operative bank who wants to be a director must have experience, skills and qualifications to operate the bank and must be a fit and proper person as detailed in clause 9 of the Bill. When looking at this clause, the committee felt that the requirements were a bit onerous and might exclude a lot of members of our community. However, this, on the other hand, ensures that members’ deposits will be protected and that the banks will be run properly by those individuals on the executives of the banks.

The argument of clauses 7 and 9 is that the Bill, as I have said, excludes those entrepreneurs who are not discouraged by the failure of their businesses at the first attempt, or after many unsuccessful attempts for that matter. Thus it is a concern that the supervisor has wide-ranging powers to disqualify such entrepreneurs. For instance, yesterday I visited two construction projects in my constituency which have been outstanding since 15 July 2007 due to nonpayment of labour by small contractors. Allegedly, this was due to the municipal council not effecting payment on time due to whatever reasons. But who bears the brunt? It is the struggling individual who is now deemed unfit by the supervisor to run or be on the board of the co-operative bank just because of association with the failed project.

I do not condone the involvement of people who might lead to the misuse of members’ funds. However, care should be taken that we do not exclude people who are honest in their failures.

Clause 55 ensures that even those co-operative banks that do not qualify, qualify by involvement of the development agency. Some of the concerns raised in clause 7 are somewhat covered by clause 55.

Due to the unanimous consensus in the committee, I will yield the rest of my time to hon member Fubbs to deal with the rest of the issues. Thank you.

Mr L M GREEN: Deputy Speaker, the Co-operative Banks Bill provides a strengthened legal framework and coverage for lower-paid workers and rural communities regarding financial management and potential improvement in financial capacity. Co-operative banking is one step in the right direction to facilitate competition on behalf of its members. The benefits accrued as a result of the regulatory system suggested by the Bill will formalise the sector into one that should meet the developmental objectives underlining the functions of co-operative financing. Co- operative banking has the advantage that members have a direct interest in the management and regulatory provisions of the sector.

The Bill will encourage weaker co-operatives, those with fewer than 200 members, with a financial threshold of below R1 million, to become aware of the competitive advantages of the new regulatory system. Smaller co- operatives may also be encouraged to expand their growth since regulating the industry provides protection against systemic risk as co-operatives grow in size and responsibility.

The Bill will have a positive impact on co-operatives by improving the quality of service to their members as well as adopting appropriate business models to boost their capital growth. The successful implementation of this Bill will lead to greater demand for co-operative banks across a wider spectrum of services as long as the lives of people are positively impacted on and some level of financial security can be attained through such banks.

We may witness the start of a self-sustaining economic model devised by people themselves in tackling the issues of poverty and underdevelopment. It is for this reason that the FD wholeheartedly supports the Co-operative Banks Bill. I thank you. Ms J L FUBBS: Madam Deputy Speaker, hon members of this House and people of South Africa, today is a momentous day in the lives of the unbanked millions of people in our country because today, I believe, we will pass the Co-operative Banks Bill, which opens the doors to financial access but also, given that we have an ANC government ruling us here and providing good governance, because this entrance is sustainable and that a platform is created to underpin the ANC government’s commitment to the eradication of poverty and the creation of an enabling environment to create jobs.

Indeed, hon Deputy Speaker, the Co-operative Banks Bill has widened financial access for the poor. Today, we again see the ANC government implementing the terms and the pillars of the Freedom Charter … [Interjections.]

The DEPUTY SPEAKER: Order! Hon members, there are too many meetings taking place in this House. If this continues, we will have to ask you by name to leave the House and continue with your meetings elsewhere. Please continue, hon Fubbs.

Ms J L FUBBS: Thank you, Madam Deputy Speaker. I have pointed out the Freedom Charter, but today we also see the implementation of one of the transformational instruments, the RDP. In fulfilment of the letter and spirit of the Freedom Charter, people - whether employed or unemployed according to the statistical definition - will enjoy ownership of the financial fruits of their labour through their membership of co-operative banks.

Yebo, abasebenzayo nabangasebenzi bazohlomula. [Indeed, the employed and the unemployed will benefit.]

Yes, indeed, co-operative banks are member-based and deposit-taking financial services co-operatives which offer a series of banking services.

Deputy Speaker, what I think is important for the people of South Africa, especially the millions who are unbanked, is that this will also address an issue that we are all aware of, namely our people drowning in debt to the omashonisa, what are commonly “loan sharks” called by liberals.

Currently, there are 27 million adults in our country, of whom more than 13 million do not have basic transactional facilities. Of these 13 million unbanked South Africans, 11 million are Africans who fall within the bottom half of the distribution of income, reflecting the continuing realities of an apartheid legacy. Amongst the unemployed, 83% do not have a bank account as I stand here before this House, and 60% of those who work in the informal sector remain unbanked. Now you can see the critical role that the Co-operative Banks Bill, once it is enacted and passed in this House, will play in transforming the structural fractures in our society. As a policy intervention, translated into legislation, the Co-operative Banks Bill seeks to reduce poverty. I don’t want to talk about reduction; it’s the eradication of poverty that is the goal. But of course we have several instruments serving that goal. So this is contributing to the reduction of poverty within that. It provides working capital for the purchase of inputs.

How many millions of our people are on the land? Others are saying: “Don’t give them any land, look what happens when you give them land, they can’t farm the land.” Well, I’ll tell you: Once you have a co-operative banks Bill, people will be able, through their own efforts and working capital, to provide capital alongside government subsidies. [Applause.] It will also allow for consumption smoothing. By “consumption smoothing” I mean how, in the business sector, you pick up the phone and say: “Listen here, Harry, man, you know us at Anglo or whatever, just organise a quick transfer.” The poor fellow on the farm who has just been given this piece of land, does he know Harry? Of course he doesn’t know Harry. But he knows the fellow next door. Yes, he does – it’s Mokoena. He says: “Mokoena, man, let’s to the co- operative bank and we get this credit.” They get the credit. [Laughter.]

Regarding saving, this Bill will enable people to save and the saving facilities will be of their own making; people who know them saying: “We know that we are going to work together and put this to bed.” Cash surpluses can also create a barrier for the foreseen and unforeseen expenses of the future.

Deputy Speaker, I am a great admirer of Amartya Sen, the Nobel Prize economist. But I sometimes think that it is people like me who forget that people like Julius Nyerere were already speaking about the developmental state long before Amartya Sen spoke about it. He said: “We have to run while others walk!” But we run together, that’s why we are going to get there.

Deputy Speaker, I don’t want to forget a point that I intended making and that is the importance of people, ordinary people, being given financial access. [Laughter.] And bear with me as I say the following.

Omama namadodakazi, obaba namadodana bazoba namabhange lapho bezokwazi ukulondoloza nokuboleka khona, ukuze bakhe inzuzo. [Mothers and daughters, fathers and sons will have banks where they will be able to save and borrow so that they can make profit.]

That is very important. What we are saying is that it has become very critical – it enables our mothers, our daughters, our fathers and our sons to have access to finance.

Indeed, the ANC supports this Bill because it is going to be a formidable instrument in the eradication of poverty in the rural areas. Thank you. [Applause.]

The MINISTER OF FINANCE: Deputy Speaker, the hon Fubbs fluffed her line; she was meant to say what a wonderful Finance Minister I am. I don’t know why she didn’t do it. [Laughter.]

Firstly, let me express appreciation because, clearly, it’s not even a Bill of the government, it’s a Bill that is supported by all parties in this House and that consensus, I think, is a very important foundation for the co-operative banking movement. I think the movement is much bigger than the institution and that is what we have to focus on. It has taken us a long time to ensure that we can provide depositors and owners of these co- operative banks with the regulatory environment and the depositors’ insurance within the Reserve Bank to ensure that we can raise the trust that people would have in these institutions. That I think is very important.

A number of years ago I was one of the people involved with an institution called the Community Bank that went belly-up. It was like this but it kind of grew too fast. The one experience that I think we have from that is that the trust levels were very low. People left sufficient money in there because they could borrow from it but their salaries and financial transactions were the big fallbacks. The issue of trust is very important and this won’t come merely because we pass this legislation.

If you want a movement, you have to build a movement. So I plead with all members of this House and with all parties, now that we will get this legislation, hopefully, through the NCOP - the President will accede to it quite soon - we have to ensure across party lines that we make the co- operative movement in South Africa happen and that will happen because we put energy and something of ourselves into this movement and into the financial institutions that will drive this movement to ensure that we can indeed provide a better outcome and better security for those most in need of access to financial services.

Thank you very much for supporting the legislation. [Applause.]

Debate concluded.

Bill read a second time.

  SPECIAL ADJUSTMENTS APPROPRIATION BILL (2007/2008 FINANCIAL YEAR)

                           (Introduction)

The MINISTER OF FINANCE: Thank you, Deputy Speaker. I am glad that the Table sequenced the legislation because I certainly hope that the same level of consensus will be carried forward.

In terms of section 213 of the Constitution, the withdrawal of money from the National Revenue Fund as a direct charge must be provided for in an Act of Parliament. In terms of section 77, read with section 73 of the Constitution, a Bill that authorises a direct charge is a money Bill that has to be introduced by the Minister of Finance.

The Special Adjustments Appropriation Bill appropriates additional amounts of money for the requirements of the Departments of Public Enterprises, Communications, Agriculture, and Sport and Recreation in South Africa in respect of the current financial year.

The additional appropriation to Public Enterprises will enable the department to make transfers to certain state-owned enterprises to address urgent cash requirements. The proposed adjustment of R2,090 billion to the budget of the Department of Public Enterprises will be recorded as transfers to Alexkor R44,7 million, Denel R222 million, and the Pebble Bed Modular Reactor R1,823 billion.

The Department of Communications will transfer through it, if the Bill is approved, R500 million to Sentech. The funding will contribute to the capital requirements associated with establishing a broadband wireless telecommunications network.

The additional appropriation of R700 million sought for the Department of Agriculture will be transferred to the Land Bank. The proposed adjustment is necessary to address liquidity shortages and cash adequacy ratios of the bank.

In respect of the Department of Sport and Recreation, an additional appropriation of R1,9 billion will be allocated through the department and recorded as 2010 Fifa World Cup stadium development conditional grants. The proposed adjustment is necessary to ensure that stadium construction programmes are not constrained by cash-flow shortages. It is in fact not additional money over the period; it is bringing forward next year’s spending into this year to ensure that the stadiums are completed ahead of schedule.

This is what the Bill contains and I have pleasure in tabling this Special Adjustments Appropriation Bill. Thank you, Deputy Speaker. [Applause.]

Bill referred to the Portfolio Committee on Finance for consideration and report.

                  NATIONAL GAMBLING AMENDMENT BILL

                       (Second Reading debate)

The MINISTER OF TRADE AND INDUSTRY: Madam Deputy Speaker, colleagues, hon members of Parliament, I am honoured to table the Second Reading of the National Gambling Amendment Bill. This amendment provides legislation for the regulation of interactive gambling. It seeks, amongst other things, to protect society from the negative effects of gambling; to protect minors and other vulnerable persons from exposure to gambling; and to prevent gambling from being a source of crime and a conduit for money laundering.

Having recognised certain shortcomings in our law, this Bill addresses the socioeconomic implications of an unregulated interactive gambling industry by establishing an effective and efficient regulatory framework in line with government’s broad policy framework for the regulation of all forms of gambling.

A draft Bill was approved by Cabinet in December 2006 and published for comment on 18 December of that year. Written comments were received from stakeholders and public consultations took place over an extended period of time. In summary, the amending Bill deals with player protection, problem gambling, advertising, money laundering, enforcement and compliance, licensing and other matters such as taxation, provision of games, and so on.

Madam Deputy Speaker, allow me to elaborate on each of these aspects. Firstly, in respect of player protection the Bill provides for everyone engaged in interactive gambling to be registered with a licensed interactive gambling provider. Strict verification procedures that are compliant with the Financial Intelligence Centre Act, Fica, will need to be complied with. Statutory requirements, such as attaining a sworn statement from the player that they are 18 years or older, will ensure that minors do not have access to interactive gambling.

In addition, players must nominate an account held with an authorised financial institution and this account will be the only account through which transfers of monies will be carried out. The Bill will make any gambling activity provided by an unlicensed provider unlawful and will prohibit South African players from engaging in interactive gambling activities with unlicensed providers.

Secondly, one of the key problems associated with interactive gambling is its accessibility and availability around the clock. This Bill therefore obliges the interactive provider, through licensing conditions and regulations, to ensure that there is an electronic system for the monitoring and reporting of registered players. Players will be required to set limits on accounts. The principle of know-your-customer will apply and providers will be required to audit playing patterns and behaviour. Players will be exposed to self-diagnosis systems and notices on websites of service providers in respect of voluntary player exclusion and treatment of addictive gambling.

Thirdly, the Bill makes the advertising of interactive gambling unlawful, irrespective of whether such advertisers are based offshore.

Fourthly, the Bill will be governed by the Financial Intelligence Centre Act requirements as far as money laundering is concerned. One of the main provisions on money laundering is that gambling equipment, which includes the server and other key records of players’ transactions, be located in South Africa. Also, registration of players, verification of player identity and only allowing players from selected countries that comply with the Financial Action Task Force or designated organisations to engage in interactive gambling licensed in the Republic will apply.

Other control measures include the establishment of player accounts, the verification of nominated accounts, regulating the method of payment to the provider such as the electronic methods of payment only and the requirement that a provider must not convert any funds in a player account into any other form of value. The interactive provider has an obligation to report suspicious and illegal activities. The provision of control systems will therefore be prescribed to ensure compliance. Interactive gambling is borderless, therefore, the fifth area we deal with is our view that the enforcement and administration of this Bill should be discharged at a national level. In support of this principle, the National Gambling Board will ensure compliance with the National Gambling Act and conditions of licence. The board will supervise and enforce compliance by licensees with the Financial Intelligence Centre Act requirements and conduct inspections in respect of interactive gambling websites and premises where interactive gambling equipment and software are located. The board is empowered to revoke or suspend interactive gambling licences for noncompliance and, as part of co-operative governance, may delegate some of its enforcement and compliance powers to the provincial licensing authorities.

In regard to the sixth key issue addressed by the Bill, namely licensing in general, the Bill provides for the licensing of interactive gambling and that these licences will be issued as national licences due to the borderless nature of this activity. The interactive gambling licences include operator licences and employee licences for key employees, management staff and directors or shareholders. There is also licensing or testing of certification requirements for interactive gambling software, equipment, manufacturers, suppliers and maintenance providers of interactive gambling equipment.

Finally, the Bill provides for the imposition of taxation which will be catered for in a separate money Bill. The DTI is currently in consultation with National Treasury on the procedure for the imposition of such a tax. It is our view that taxation will be optimised to create a level playing field and, at the same time, be used to curb any proliferation of gambling.

As we all know, constant developments in technology have a direct impact on conventional methods of product and service offerings. To allow for flexibility in the ever-changing environment of information and communications technology, many of the provisions in this regard will be provided for in the regulations.

In conclusion, I would like to thank the Portfolio Committee on Trade and Industry for its guidance, support and important contributions. The committee has done a sterling job by further strengthening the provisions of the Bill, especially in the areas of advertising, tightening provisions on player registration, money laundering and the establishment of foreign company presence in South Africa, among other things.

I also extend my gratitude to other government departments, key stakeholders in the industry, our provincial counterparts and members of the public for their inputs into these amendments. Their commitment to ensuring that this amending Bill is appropriate and consistent with government’s broad policy framework for the regulation of all forms of gambling has been extremely helpful.

Madam Deputy Speaker, I commend this Bill to the House. [Applause.]

Prof B TUROK: Chairperson, I would like to start by thanking the Minister for thanking the committee. We heard earlier this afternoon that the Minister of Finance expressed appreciation to the Portfolio Committee on Finance for assisting and helping a Bill to be improved. I honestly do want to say that I think our committee, the Portfolio Committee on Trade and Industry, similarly improved the Bill.

By the way, I would like to say that I hope the press take note of these comments by these two Ministers because we are rather tired of the negative reporting on the activities of this House and some of us who work so hard in the committees feel that the press ought to take notice that when a Minister says a Bill has been improved, it has indeed been improved. [Applause.]

I would like to add that when the Bill initially came to the committee it looked very much as though it was a technical measure designed to regulate a new industry, which was one feature of the draft Bill, and secondly, that there was a suggestion that the Bill would make money for the fiscus.

Our committee took a slightly different view and, indeed, if I emphasise the moral aspects of the discussions of the committee, it is because the committee took a very strong view on gambling.

The committee felt that revenue collection should not be a primary motive in legislation about gambling at all. Of course, there could be a by- product for the fiscus but it shouldn’t be the main purpose for which a Bill on gambling is legislated. It can be a by-product of the activities but it shouldn’t be the main focus.

Secondly, we believed and we argued very strongly with the department - or not argued, but presented a case - that gambling is not in itself a desirable activity and it had to be curbed. It is because of that strong position that the word “curbed” was introduced into the long title of the Bill and indeed I would say that the Bill has a slightly different flavour because of the moral stance of the committee about the need to curb gambling.

We know, and the evidence is overwhelming, that lots of people suffer serious consequences from gambling of all kinds and we thought that the moral issues in our regulation of gambling were very important and so we find in the long title the phrase that the Bill is designed to “protect society against the stimulation of the demand for gambling”, “to protect minors and others” and that “gambling should not be associated with crime in any way”.

Those moral aspects were introduced in the Bill in various places. For example, the initial draft allowed for a degree of advertising. The committee was against that and so all advertising is prohibited in the Bill as it stands. We do not want to see that the interactive gambling industry should, in any way, advertise its activities, so that young people should not be drawn into this kind of stuff because, as we know, lots of young people have access to computers; they know the Internet better than many adults and therefore the temptation to go into interactive gambling will be there.

Fortunately, players must now register, as the Minister has indicated. The stakes are monitored, excessive indebtedness and addiction are seen to and there is an elaborate registration system which we went through in great detail. Gamblers have to identify themselves. They have to state their age and other personal details and, critically importantly, there are dedicated bank accounts which have to be used in a particular process of interactive gambling.

I also want to add that extensive consultation and public hearings were held because there are many financial interests in South Africa. We are involved in gambling of all kinds and we also asked the department to ensure that the list of bodies that they had consulted should also include civil society organisations, religious bodies and so on because, as I say, the fundamental question for the committee was not the technical question of regulation and control but the moral fibre of our society. So we added several civil society institutions, religious bodies and so on so that, ultimately, in all the discussions, the moral issues of gambling came to the fore.

We understand that interactive gambling is an international phenomenon. It lays itself open to money laundering and the Treasury certainly had a lot to say on that and certain measures have been built into the legislation, as the Minister has indicated, including the fact that international providers have to have a presence in South Africa. Thereby we follow the procedures and the tradition of the banking sector whereby foreign banks have to have a local presence and in the same way international providers have to have a local presence here too.

I want to thank the department. We worked with them very well. The officials were very sensitive to what we had to say, especially on the moral issues and so we produced what I think is a better Bill and certainly it made one feel that all one’s activities in Parliament are worthwhile and I would ask the media to report exactly that. Thank you.

Dr P J RABIE: Chair, the DA supports this Bill. The object of this piece of legislation is to capture the socioeconomic implications of an unregulated interactive gambling industry by establishing an effective regulatory framework.

Interactive gambling currently provides little or no protection to players. There is uncontrolled exposure to minors and persons vulnerable to gambling. The current untenable situation compromises our reputation as a responsible member of the international gambling industry. Interactive gambling is generally accepted to mean all forms of remote gambling taking place via the Internet or other related forms of telecommunication.

The Portfolio Committee on Trade and Industry had public hearings and received a number of submissions from a wide number of bodies and organisations and a number of issues were discussed.

The Bill provides for the registration of players and for player exclusion. It also provides for the resolution of disputes between players and interactive providers by the National Gambling Board. This Bill is also very clear and prohibits the advertising of interactive gambling – which differs from the National Gambling Act of 2004.

The Bill provides for the Minister to prescribe procedural requirements for licensing by the board in order to ensure compliance with technical requirements for equipment, software and premises. During the public hearings it was mentioned that money laundering can take place through interactive gambling. This Bill places an obligation on interactive gambling providers to report any suspicious and illegal activities. The financial implications of the amending Bill will be paid by the National Gambling Board and the additional personnel that will be required to regulate and administer it as follows. The memorandum on the objects of the National Gambling Amendment Bill states, and I quote: “Certain expenses will be recouped from the interactive gambling licence revenue”.

Mnr die Voorsitter, interaktiewe dobbel is ’n werklikheid en dit kan ’n baie belangrike verdiener van buitelandse valuta vir die fiskus word.

Om op te som – hierdie wet sal in wese poog om ’n vorm van dobbelary te wettig, te reguleer en te orden wat reeds bestaan en waaraan derduisende Suid-Afrikaners reeds deelneem.

Die internet is ’n medium wat toenemend deur individue oor die wêreld gebruik word. Wat belangrik is betreffende die wetsontwerp, is dat daar gepoog word om die verbruiker, en veral minderjariges, te ontmoedig om interaktief te dobbel. Mnr die Voorsitter, ek dank u. (Translation of Afrikaans paragraphs follows.)

[Chairperson, interactive gambling is a reality and it can become a very important earner of foreign exchange for the fiscus.

In summary, this Bill will indeed attempt to legalise, regulate and order a form of gambling that already exists and in which thousands of South Africans are already participating.

The Internet is a medium which is increasingly being used by individuals around the world. What is important about this Bill is the fact that it attempts to discourage consumers, especially minors, from gambling interactively. I thank you.]

Prof E S CHANG: Chairperson, hon Minister, ladies and gentlemen, interactive illegal gambling is in South Africa. Nowadays, with great technological developments and the rapid expansion of the Internet and other interactive communication options, it is affecting our society to a great extent.

Whether we do or do not approve or agree with interactive gambling, the true scenario is that interactive gambling is taking place in South Africa but it is not regulated at the moment. The current unregulated nature of interactive gambling allows underage children to access this activity with ease and there is the scope for the development and expansion of criminal activities such as money laundering as well as the negative consequences that it could have for the poor.

The authorities must be aware of and take action against some of the concerns raised if the Bill is to truly attempt to regulate interactive gambling. We must remove all criminal and illegal elements and activities from gambling while at the same time ensuring that the most vulnerable members of our society are protected and taught about the harsh realities of gambling.

Of course, Minister, there will be economic benefits to be gained from the efficient regulation of interactive gambling, such as additional revenue and job creation. These benefits must not, however, be pursued at all costs and at the expense of addressing the social ills that interactive gambling will cause if it is not properly regulated.

We hope the relevant authorities would have the necessary capacity and expertise to regulate and monitor the Bill as the interactive environment is very dynamic and constantly changing. The IFP supports the Bill. Thank you.

Mrs C DUDLEY: Chairperson, hon Minister, the ACDP in general does not support legislation that facilitates gambling and strongly objected to the National Gambling Act in 1996 – legislation that was of course supported by the ANC, the DA and many others.

We again point out that this amending Bill is yet another concerted but in the end futile effort to shut the stable door when the horse has already bolted. The ACDP wholeheartedly agrees with the hon Mr Ben Turok’s comments in the committee that the only reason to legislate on Internet gambling or interactive gambling, as the Bill calls it, should be to abolish it or to curb it.

The gambling industry exploits people’s weaknesses and undermines efforts towards moral regeneration. The detrimental social and economic effects of gambling and the destruction it brings in the lives of individuals and families have been increasingly evident since the National Gambling Act came into being.

While this amendment is an attempt to prevent crime and to protect vulnerable people and minors from harm and exploitation, loss of revenue to the national fiscus was also a concern. As the hon Mr Turok pointed out, this is a moral issue; it is a social evil that we may have to regulate to curb, but we must not make money out of it.

This amending Bill also deals with advertising, licensing, compliance and enforcement, problem gambling and money laundering, and follows a comprehensive international study.

The ACDP will support efforts to contain the effects of gambling only because the abolition of all forms of gambling in South Africa has not yet been achieved. Gambling clearly undermines nation-building and is an attack on our young democracy and the moral fibre of society. Thank you.

Ms S RAJBALLY: Chairperson, the MF acknowledges that South Africa has some of the world’s most effective and well-formulated legislation governing land-based gambling and we trust that we shall follow with similar provisions for interactive gambling.

However, the MF brings to the table a number of concerns as many South Africans have been noted to be addicted to gambling and this has destroyed many lives. Our great concern is that if we are extending access to gambling into our homes, even though legislation may provide some control, how, honestly, can it be managed effectively?

In the United States of America, Internet gamblers are reported to have more serious gambling problems than those who use slot machines and lotteries. How different do we expect our situation to be and what has the department done to safeguard against the abuse of Internet gambling? Furthermore, children are able to access pornographic websites, even though these too are controlled by law and by the over-18 age limitation. How are we to truly secure minors from accessing these sites?

The concern of the Casino Association of South Africa needs to be taken into consideration as we are not to introduce Internet gambling to the detriment of our people. We do however respect that the Bill has attempted to cover and manage a number of problem areas. There is a concern in terms of money laundering. A trial period needs to be exercised to evaluate the South African situation and the response to Internet gambling.

The MF will support the National Gambling Amendment Bill. Thank you.

Mnu S J NJIKELANA: Sihlalo obekekileyo, naba phathiswa abahloniphekileyo malungu ePalamente kunye nani baseMzantsi, ndiyanibulisa nam namhlanje. Ndithanda ukucinezela eliya lika Prof Turok ukuthi noko kuhle xa izithuku thuku zokubila kwethu zisamkeleka noko kubonakale ukuba nathi siyiPalamente sinegalelo, asikruqi ngasemva nje sinalo igalelo esilenzayo kwimithetho esiqulunqayo apha. (Translation of isiXhosa paragraph follows.)

[Mr S J NJIKELANA: Chairperson, hon Ministers, members of Parliament and the people of South Africa, I greet you today. I would like to put emphasis on what Prof Turok said, namely that it is good when our hard work gets appreciated because it indicates that, as Parliament, we are not lagging behind but are making a contribution in the making of laws here.]

Whilst the gambling legislation has been in operation for a couple of years, it emerged that interactive gambling had escaped coverage by regulation. Recent observation by the DTI presented a conclusion that there is an emerging risk of, inter alia, illegal gambling by minors.

The obvious solution was to close the open flank. The process of amending this existing Act was to allow inputs by various stakeholders during preparliamentary processing as well as holding public hearings by the Portfolio Committee on Trade and Industry. This process was a telling experience, especially when the DTI was accused of not having consulted with stakeholders in the industry.

To our surprise, when the list of stakeholders was furnished to the Portfolio Committee on Trade and Industry, it became clear that the DTI had done its best and stretched itself as wide as possible during the consultation process.

Addictive gambling always finds its way to those who make themselves vulnerable to vices such as gambling. Since interactive gambling is based primarily no Internet-based gambling, the extent of effective scrutiny and checks and balances on responsible behaviour is still to be tested.

Furthermore, what if irresponsible parents allow their underage children, who are prohibited by the law, to engage in interactive gambling? Surely, the challenge stretches beyond the DTI to the portfolio committee itself, on behalf of this National Assembly, to do its utmost and ensure that such wanton activities – and here I underline Prof Turok’s words – are curbed to the optimum.

As the portfolio committee, our experience and analysis of the public hearings are as follows: Firstly, in his submission Prof Joe Kelly, who has assisted in drafting online gambling legislation in various jurisdictions, claims that “it stands to reason that any new legislation regulating online gambling should be rigorous and thorough”.

The Justice Alliance of SA, whilst strongly opposed to legalising and thus condoning and encouraging any form of gambling, had major concerns which, amongst other things, placed emphasis on the probable impossibility of being able to “ensure children do not gamble in this manner, particularly as credit cards become widely used by parents. The real danger is that children will have their appetites whetted to what can so easily become an addiction.”

A legislative amendment of this nature may appear routine. However, the socioeconomic context within which the activity of interactive gambling exists may have results too ghastly to contemplate if this is not firmly and tightly managed. Whatever the case may be, the Portfolio Committee on Trade and Industry has several tasks and challenges when it comes to the expected oversight work on this additional regulation.

Whilst the usual trend, especially from the ANC’s side, is to ensure enabling legislation, in this instance the focus was on tightening regulations to ensure that unintended consequences are avoided as far as possible. The world is littered with social wrecks caused by irresponsible behaviour that results in addictive gambling.

I trust that the National Assembly will provide the required support to the portfolio committee to effectively engage in its new oversight role of a special type, that of oversight of interactive gambling. I thank you.

Mr L M GREEN: Chairperson, gambling is a social cancer that must be destroyed and no number of amendments to the Gambling Act will have the desired effect. If we want to fight on behalf of poor, we cannot take any half measures. Interactive gambling, like all other forms of gambling, including the National Lottery, should be outlawed and not encouraged.

The Bill, as stated in the purpose of the Act, is supposed “to provide a legal basis for the regulation and control of all licensed gambling activities”. South Africa has legalised gambling, which has a dire impact on many individuals and families addicted to gambling, especially the poorest of the poor. The Bill requires that interactive gambling should be controlled and regulated for reasons relating to access, loss, crime and other dangers.

The irony is that gambling is a source of manipulation and control which entices victims into a deepening pit of addiction. No amount of legislation can uproot the inherent social dangers of gambling. It may only assist in deepening the stealth of criminal activity.

Gambling in whatever form ought to be dissuaded and outlawed. We do not need legislation to regulate or control the industry; we need political leadership to legislate against the practice as being harmful and dangerous to individuals, families and social security and safety.

Crimes related to gambling involve human trafficking, drug abuse, sex slavery, family violence, emotional trauma and so forth. The FD will be in favour of any legislation that places stringent measures upon persons and that urges restrictions on access and exposure to gambling. We believe that the industry is still not regulated strongly enough towards these aims and although this Bill aims to impose restrictive laws on interactive gambling, we are of the opinion that it does not go far enough. The FD therefore cannot support this Bill even though the Bill aims to regulate gambling.

What we call for is the total outlawing of interactive gambling as well as all forms of gambling. I thank you.

Mr S M RASMENI: Chairperson, Minister and members of the House, the introduction of the National Gambling Amendment Bill before the Portfolio Committee on Trade and Industry triggered mainly the question whether gambling as a principle was a necessary industry in our country. Development of a country such as ours means multidimensional processes involving economic growth, better education, reduction of inequality and eradication of poverty.

When you look at gambling itself, we were unanimous that the gambling industry brings about social and economic hardships in all developing countries and can also contribute to political instability through high levels of unemployment. As a result, parents would spend their money on gambling, money that is meant for the education of our children and the maintenance of their livelihood – the future of our country. It could contribute to high levels of inequality where owners of the industry become richer and richer at the expense of the poor majority. It leads to political instability, poverty and unemployment – which lead to more resentment of the political system and those in power.

During the interaction of the committee during the various stages of debate on the Bill, it became apparent that transformation had not taken place in the gambling industry. In land-based gambling activities, which are casinos, limited pay machines, etc, and even in the current forms of interactive gambling, which means electronic gambling, there is no implementation of broad-based black economic empowerment. It is the committee’s considered view that the gambling companies themselves must take a leading role in the process of broad-based black economic empowerment through partnerships with emerging black co-operatives and small, medium and micro enterprises. Most of these are on the database of Cipro in the Department of Trade and Industry. They can get all those co- operatives from Cipro.

The government and Parliament must work closely together to monitor and ensure that the industry is transformed and complies with the national objectives of our country. The committee supports the policy framework for regulating legal gambling in the Bill, especially when the intention is spelled out in the long title: “To protect society against the stimulation of the demand for gambling.” We believe that this marks the beginning of a process to minimise gambling and ultimately phase it out in the future. Thank you. [Applause.]

The MINISTER OF TRADE AND INDUSTRY: Chairperson, I would like to thank all the members for their participation and I also want to reiterate what I said at the beginning, just for emphasis, hon Turok, that indeed the work that was done by the committee strengthened and improved this particular Bill. I think that it has to be recognised that the issues of emphasis that emerged in the committee stage of this process do, I think, answer some of the issues raised by members in the House.

Hon Dudley and hon Green, we do acknowledge the strong views and the strong feelings about and against gambling. Our stance as government is one that emphasises regulation of this industry but it is also a stance that recognises the socioeconomic risks of an unregulated industry. I think that currently one of the risks is that we do have Internet gambling taking place in South Africa that is unregulated. We do acknowledge the strong feelings and views. At the end of this debate, I would like to thank all members for their participation in the process as well as in this debate. Thank you very much, Chairperson. [Applause.]

Debate concluded.

Bill read a second time (Federation of Democrats dissenting).

The House adjourned at 15:40. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                      FRIDAY, 7 SEPTEMBER 2007

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Draft Bills submitted in terms of Joint Rule 159 (a) National Regulator for Compulsory Specifications Bill, 2007, submitted by the Minister of Trade and Industry. Referred to the Portfolio Committee on Trade and Industry and the Select Committee on Economic and Foreign Affairs.

(b)    Standards Bill, 2007, submitted by the Minister of Trade and
     Industry. Referred to the Portfolio Committee on Trade and
     Industry and the Select Committee on Economic and Foreign Affairs.

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Health

(a)    Report and Financial Statements of the South African Medical
     Research Council (MRC) for 2006-2007, including the Report of the
     Auditor-General on the Financial Statements for 2006-2007 [RP 172-
     2007].

                      MONDAY, 10 SEPTEMBER 2007

ANNOUNCEMENTS

National Assembly

The Speaker

1. Membership of Assembly (floor-crossing)

Membership status of the following member has in terms of Schedule 6A
of the Constitution (floor-crossing) changed as follows:


  • Mr M T Likotsi has left the Pan Africanist Congress of Azania (PAC)
    and joined the African People’s Convention (APC) with effect from 6
    September 2007.

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Communications

 (a)    Report and Financial Statements of Sentech Limited for 2006-
     2007, including the Report of the Independent Auditors on the
     Financial Statements for 2006-2007.

1. The Minister of Labour

 (a)    Report and Financial Statements of the National Productivity
     Institute (NPI) for 2006-2007, including the Report of the
     Independent Auditors on the Financial Statements for 2006-2007.

 (b)    Report and Financial Statements of the Local Government Sector
     Education and Training Authority (LG-Seta) for 2006-2007,
     including the Report of the Auditor-General on the Financial
     Statements for 2006-2007 [RP 69-2007].

 (c)    Report and Financial Statements of the Transport Education and
     Training Authority (Teta) for 2006-2007, including the Report of
     the Auditor-General on the Financial Statements for 2006-2007 [RP
     76-2007].

1. The Minister of Trade and Industry

 Please note: The following item amends item 3(f) under the entry
 “Tablings” published on page 1692 of the Announcements, Tablings and
 Committee Reports of 6 September 2007:

 (a)    Report and Financial Statements of the Estate Agency Affairs
     Board for 2006-2007, including the Report of the Independent
     Auditors on the Financial Statements for 2006-2007.

COMMITTEE REPORTS

National Assembly and National Council of Provinces

CREDA PLEASE INSERT REPORT - Insert T070910 reprint – insert - PAGES 1698- 1714

                     TUESDAY, 11 SEPTEMBER 2007

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Introduction of Bill

 (1)    The Minister of Finance

     (a)     Special Adjustments Appropriation Bill (2007/08 Financial
          Year) [B 37 – 2007] (National Assembly– proposed money Bill)


          Introduction and referral to the Portfolio Committee on
          Finance of the National Assembly, as well as referral to the
          Joint Tagging Mechanism (JTM) for classification in terms of
          Joint Rule 160.


          In terms of Joint Rule 154 written views on the classification
          of the Bill may be submitted to the JTM within three
          parliamentary working days.

1. Assent by President in respect of Bills

(a)    Transnet Pension Fund Amendment Bill [B 30B – 2006] – Act No 6
     of 2007 (assented to and signed by President on 3 September 2007).

(b)    Municipal Fiscal Powers and Functions Bill [B 9B– 2007)] – Act
     No 12 of 2007 (assented to and signed by President on 3 September
     2007).

National Assembly

The Speaker

1. Membership of Assembly

(a)     Mr A Harding lost his seat in the National Assembly with effect
     from 22 August 2007.

    The vacancy caused by the loss of seat by Mr Harding has been
    filled, with effect from 5 September 2007, by the nomination of Mr
    M H Hoosen.

1. Membership of Committees

(1)     The following changes have been made to the membership of
     Portfolio Committees:

    Defence
    Appointed:     Bhengu, Mr F
    Discharged:    Tobias, Ms T V
    Public Works
    Appointed:     Tobias, Ms T V
    Disharged:     Bhengu, Mr F

(2)     Mr S D Montsitsi has been elected as Chairperson of the
     Constitutional Review Committee with effect from 7 September 2007.

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Trade and Industry

 (a)    Report and Financial Statements of the National Gambling Board
     for 2006-2007, including the Report of the Auditor-General on the
     Financial Statements for 2006-2007 [RP 142-2007].

COMMITTEE REPORTS

National Assembly

1. Report of the Portfolio Committee on Communications on the appointment of 12 non-executive members of the SABC Board, dated 11 September 2007:

   The Portfolio Committee on Communications, having considered and examined the matter of the appointment of 12 non-executive members of the Board of the South African Broadcasting Corporation, referred to it for consideration and report on 5 June 2007, reports as follows:

   The Committee invited the public to nominate persons for consideration and recommendation to the President for appointment on the Board by means of advertisements in the print media. Responses were received from 143 individuals.

   On 15 August 2007 37 candidates were selected to be interviewed, namely

   Ms N Bulbulia, Ms M Bhengu, Prof MJ Cock, Mr BM Dlamini, Mr E Funde, Ms A Gilwald, Dr F Ginwala, Mr DK Golding, Ms PM Green, Dr S Gulube, Prof AM Habib, Mr R Howard, Ms Z Jaffer, Mr M Judin, Mr B Khumalo, Ms F Lagadien, Ms L Lloyd, Mr A Mbeki, Adv NY Memani- Balani, Ms K Mkhonza, Ms M Mohlala, Mr C Msomi, Mr L Mtimde, Ms C Qunta, Dr DM Rajab, Mr P Raleigh, Mr N Rau, Dr WP Rowland, Mr M Seleoane, Ms GT Serobe, Mr SH Shezi, Mr OI Shongwe, Ms RA Smith, Adv P Tlakula, Mr A Trikamjee, Mr M Tshume, Mr BP Vundla.

   Two candidates, namely Ms M Bhengu and Mr E Funde, withdrew from the process.

   After having interviewed the above candidates in open meetings in Parliament on 14, 15, 21, 22, 28, 29 and 31 August and on 4 and 5 September 2007 the Committee resolved that the House, in accordance with section 13 of the Broadcasting Act, (No 4 of 1999), recommends to the President that the following candidates be appointed as non-executive members on the SABC Board:

   Ms N Bulbulia, Ms A Gilwald, Mr DK Golding, Mr B Khumalo, Ms F Lagadien, Mr A Mbeki, Ms K Mkhonza, Ms C Qunta, Ms GT Serobe, Adv P Tlakula, Mr A Trikamjee and Mr BP Vundla Report to be considered.