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Marine Spatial Bill targets ocean resources…

Bill to bring order to marine economy…

In the light of President Zuma’s emphasis in his recent speeches on oil and gas issues, it is important to couple this in terms of government policy with the tabling of the section 76 Marine Spatial Planning Bill (MSP Bill).  The proposals are targeted at business and industry  to establish “a marine spatial planning system” offshore over South African waters.

The Bill  also says it is aimed at “facilitating good ocean governance, giving effect to South Africa’s international obligations.”

A briefing by the Department of Environmental Affairs (DEA) on their proposals is now awaited in Parliament. The Bill until recently was undergoing controversial hearings in the provinces as is demanded by its section 76 nature.

Water kingdom

The MSP Bill applies to activities within South Africa’s territorial waters known as Exclusive Economic Zones, which are mapped out areas with co-ordinates within South Africa’s continental shelf claim and inclusive of all territorial waters extending the Prince Edward Islands.

The Bill flows, government says, from its Operation Phakisa plan to develop South Africa’s sea resources, notably oil and gas.   The subject has recently been subject to hearings in SA provinces that have coastal activities. This importantly applies to South African and international marine interests operating from ports in Kwa-Zulu Natal and the Eastern and Western Cape but also  involves coastal communities and their activities.

International liaison

Equally as important as maritime governance, is the wish to assist in job creation by letting in work creators.  Accounted for also are international oceanic environmental obligations to preserve nature and life supporting conditions which DEA state can in no way can be ignored if maritime operations and industrial seabed development are to be considered.

South Africa is listed as a UNESCO participant, together with a lengthy list of other oceanic countries, agreements which, whilst not demanding total compliance on who does what, are in place to establish a common approach to be respected by oceanic activity, all to be agreed in the 2016/7 year.  South Africa is running late.

Invasion protection

Whilst the UNESCO discipline covers environmental aspects and commercial exploitation of maritime resources, the MSP Bill now before Parliament states that in acknowledging these international obligations, such must be balanced with the specific needs of communities, many of whom have no voice in an organised sense.

As Operation Phakisa has its sights set on the creation of more jobs from oceanic resources therefore, the MSP Bill becomes a balancing act for the Department of Environmental Affairs (DEA) and the Bill is attracting considerable interest as a result.

The hearings in the Eastern Cape have already exposed the obvious conundrum that exists between protecting small-time fishing interests and community income in the preservation of fishing waters and development of undersea resources.  What has already emerged that the whole question of the creation of future job creation possibilities from seabed-mining, oil and gas exploration and coastal sand mining is not necessarily understood, as has been heard from small communities.

The ever present dwindling supply of fish stocks is not also accepted in many quarters, with fishing quotas accordingly reduced.

Tug of war

All views must be considered nevertheless but from statements made at the political top in Parliament it becomes evident that the potential of developing geological resources far outweigh the needs of a shrinking fishing industry.  At the same time, politicians usually wish to consider votes and at parliamentary committee level, the feedback protestfrom the many localised hearings is being heard quite loudly.

As one traditional fishing person said at the hearings in the Eastern Cape, “The sea is our land but we can only fish in our area to sustain life. The law is stopping us fishing for profit.”

Local calls

The attendees at many hearings have said that the MSP Bill and similar regulations in force restrict families from earning from small local operations such as mining sand; allow only limited fishing licences and call for homes to be far from the sea denying communities the right to benefit from the sea and coastal strips for a living.

Hearings last went to the West Coast and were held with Saldanha Bay communities.

Big opportunities

Conversely, insofar as Operation Phakisa is concerned, President Zuma, as has been stated, said clearly in his latest State of Nation AddressZuma that government has an eye for much more investment into oil and gas exploration.   He has since announced that there are plans afoot to drill at least 30 deep-water oil and gas exploration wells within the next 10 years as part of Operation Phakisa.

Coupled to this is the more recent comment in Parliament that once viable oil and gas reserves are found, the country could possibly extract up to 370 000 barrels of fossil fuels each day within 20 years – the equivalent of 80% of current oil and gas imports.

According to the deadline set by the Operation Phakisa framework, the MSP Bill should have been taken to Parliament at the beginning of December 2016 for promulgation as an Act by the end of June 2017, making it appear that things are running late.

Environmental focus

As the legislation is environmentally driven, with commercial interests coming to the surface in a limited manner at this stage, the matter is being handled by the Portfolio Committee on Environmental Affairs.    It is understood that later joint meetings will be held with the Trade and Industry Committee and with Energy Committee members.

Adding to the picture that is now beginning to emerge, is the fact that Minister of Science and Technology, Naledi Pandor, has signed a MOU with the Offshore Petroleum Association of South Africa.

Minister Pandor said at the time of signing, “The South African coastal and marine environment is one of our most important assets.   Currently South Africa is not really deriving much from the ocean’s economy. This is therefore why we want to build a viable gas industry and unlock the country’s vast marine resources.”

Moves afoot

OPASA is now to make more input with offshore oil and gas exploration facts and figures.   Energy publications are now bandying figures around that developments in this sphere will contribute “about R20bn to South Africa’s GDP over a five-year period.”   If this is the case, the Energy Minister might be compromised once again, as she was with renewables, on the future makeup of the planned energy mix.

Amongst the particularly worrying issues raised by opposition parliamentarians and various groupings in agricultural and fishing areas is that there is a proposal in the MSP Bill on circuit states that the Act will trump all other legislation when matters relate to marine spatial planning. DEA will have to answer this claim.

Opposition

Earthlife Africa have also stated at hearings in Richards Bay that in their opinion “Operation Phakisa has very little to do with poverty alleviation and everything to do with profits for corporates, most likely with the familiar kickbacks for well-connected ‘tenderpreneurs’ and their political allies.”

This is obviously no reasoned argument and just a statement but gives an indication of what is to be faced by DEA in the coming months.

Giants enter

With such diverse views being expressed on the Bill, President Zuma and past Minister  of Energy, Mmamaloko Kubayi cannot have missed the announcement that Italy’s Eni and US oil and gas giant, Anadarko, have signed agreements with the Mozambique government to develop gas fields and build two liquefied natural gas terminals on the coast to serve Southern African countries.

Eni says it is spending $8bn to develop the gas fields in Mozambique territorial waters and Anadarko is developing Mozambique’s first onshore LNG plant consisting of two initial LNG trains with a total capacity of 12-million tonnes per annum.  More than $30bn, it has been stated in a joint release by those companies, is expected to be invested in Mozambique’s natural gas sector in the near future.

Impetus gaining

In general, therefore, the importance of a MSP Bill is far greater than most have realized. The vast number of countries called upon to have their MSP legislation in place also indicates international pressure for the Portfolio Committee on Environmental Affairs to move at speed.

This follows a worldwide shift to exploiting maritime resources, an issue not supported by most enviro NGOs and green movements without serious restrictions.  Most parliamentary comments indicate that the trail for oil and gas revenues needs following up and the need to create jobs in this sector is even greater.

Ground rules

Whilst the oil and gas industry and the proponents of Operation Phakisa also recognize that any form of MSP Bill should be approved to provide gateway rules for their operations and framework planning, the weight would seem to be behind the need for clarity in legislation and urgency in implementation of not only eco-friendly but labour creating legislation.

Operation Phakisa, as presented to Parliament particularly specified that the development of MSP legislation was necessary and Sean Lunn, chairperson of OPASA has said that the Bill will “add tangible value to South Africa’s marine infrastructure, protection services and ocean governance.”  He said it will go a long way in mitigating differences between the environmentalists and developers.

Not so nice

On seabed mining, the position with the MSP Bill is not so clear, it seems.    Saul Roux for the Centre for Environmental Rights (CER) says that the Department of Mineral Resources granted a few years ago three rights to prospect for marine phosphates.

He also stated that the marine process “involves an extremely destructive form of mining where the top three metres of the seabed is dredged up and consequently destroys critical, delicate and insufficiently understood sea life in its wake.”   Phosphates are predominantly used for agricultural fertiliser.

“These three rights”, he said “extend over 150,000 km2 or 10% of South Africa’s exclusive economic zone.”

Something happening

One of CER’s objectives, Roux says, is to have in place a moratorium on bulk marine sediment mining in South Africa.   He complains that despite the three mining rights having been gazetted, he cannot get any response from Minister of Mineral Resources, Mosebenzi Zwane, or any access to any documents on the subject.

He stated there were two South African companies involved in mining sea phosphates and one international group, these being Green Flash Trading 251, Green Flash Trading 257 and Diamond Fields International, a Canadian mining company. All appeared to be interested in seabed exploration for phosphates although not necessarily mining itself.

Roux called for the implementation of an MSP Bill which specifically disallowed this activity as is the case in New Zealand, he said.

Coming your way

The MSP Bill was tabled in April 2017 and once provincial hearings are complete it will come to Parliament. The results of these hearings will be debated and briefings commenced when announced shortly.

Previous articles on category subject

Operation Phakisa to develop merchant shipping – ParlyReportSA

Hide and seek over R14.5bn Ikhwezi loss – ParlyReportSA

Green Paper on nautical limits to make SA oceanic nation – ParlyReportSA

Gas undoubtedly on energy back burner – ParlyReportSA

 

Posted in cabinet, Energy, Enviro,Water, Finance, economic, Home Page Slider, Labour, LinkedIn, Mining, beneficiation, Special Recent Posts, Trade & Industry0 Comments

Parliament set for tough questioning

Editorial…

…..Busy session to get some answers

….  In the absence of any move by the National Prosecuting Authority, particularly the somnambulant National Director of Public Prosecutions Shaun Abrahams whose department seems confused as to whether 100,000 leaked Gupta e-mails constitute prima facie evidence of fraud or not, it falls to a parliamentary committee in Cape Town once again to be the first official venue for any debate of consequence on the State/Gupta corruption scandals.

In one of the first meetings of the recently re-opened Parliament, the Public Enterprises Portfolio Committee is to receive a report back from legal experts on the setting up of the Eskom enquiry.

Party vs the Church

Oddly enough, it was in also Cape Town, at St George’s Cathedral, in early June, where the fight first began.    Later, the venue was room 249 in the National Assembly, where the Public Enterprises Portfolio Committee was addressed by Bishop of the South African Council of Churches (SACC). He had then just released a report on corruption by the SACC Unburdening Panel.

It fell to the Bishop the first shot and there was a sobering moment of silence in parliamentary room 249 when he finished talking. It felt like a small moment in South African history.  What came after that seemed like a little bit of a parliamentary let-down in the following weeks but it is important that what the Bishop had to say is further reported for the record.

Take that

Bishop Mpumlwana reminded all present, and particularly parliamentarians who claimed that the Church should not be “fiddling in politics”, that the same politicians had repeated the phrase, “So help me God” when taking office.

He said that the Church had no intention of ignoring the evil that was being perpetrated on the people of South Africa and asked all to note that the Constitution ended, “May God bless South Africa.”

He also said that systematic looting of resources had created a crisis for South Africans, particularly the poor. He called upon all parliamentarians to look to their consciences and assist with “the righteous cause of tracking down all those involved” in what was now an obvious state capture plan hatched during President Zuma’s watch in which the President himself, he said, was involved.

Cry, the beloved country

In a particularly moving address, he reminded all that SACC had come out in vocal support of the ANC during the apartheid years when President PW Botha was in power.   Now was the time to speak up again on the unbridled abuse of power by an ANC Cabinet and a President “who had lost his way on moral issues.”

The Church, he said, must intervene and as a result of the SACC “unburdening” process which had been conducted some months ago, he now knew that “mafia-style control” was being exercised by a political elite in Eskom, Transnet, Denel, and other government agencies.

Ignored

An attempt was in process to gain control over public funds destined particularly regarding rail, arms and nuclear projects, the last being a totally unnecessary burden placed upon the country, he said.    He concluded with an appeal to parliamentarians present to expose the crimes committed and “restore the dream that had built a rainbow nation admired the world over.”

It was gratifying to hear in following days that the Public Enterprises committee, under chairperson Zukiswa Rantho, had instituted an enquiry into Eskom’s accounts (and also Transnet and Denel it turned out) with legal opinion to be discussed in the in the next session of Parliament.

That time has now arrived and one hopes that a lot of explanations will emerge and a lot more untruths discovered in meetings with the Department of Public Enterprises (DPE) and its apparently confused but certainly compromised leader responsible, Minister, Lynne Brown.

Looking ahead

Parliament has now a busy schedule in August to catch up on lost time with delays incurred by staging a “secret ballot” on the no-confidence in President Zuma vote.

One issue will involve the passage of the contentious Mineral and Petroleum Resources Development Amendment Bill, scheduled for a meeting with the Select Committee again towards the end of August; the Expropriation Bill; and the implementation of all Twin Peaks regulations – including those for the Financial Intelligence Centre to operate in terms of the “money-laundering” changes.

This last-named body is quoted as having handed over some 7,000 cases of suspicious money movements to SAPS/Hawks and Themba Godi, chair of the Standing Committee on Public Accounts (SCOPA), has made the public comment that any parliamentary finance joint meetings must see such matters on oversight resolved in the short term, preferably immediately.

Energy up and down

Minister of Energy, Mmamaloko Kubayi, was to be informing her Portfolio Committee on the can of worms opened with her suspension of the board the Central Energy Fund stated by her as being in connection with the suspicious sale of South Africa’s oil reserves held by the Strategic Fuel Fund.

Past Minister of Energy, Tina Joemat-Pettersson, seems to have possibly lied earlier to Parliament over the sale of these assets and she, in her subsequent silence, appears to be joining what is now a whole roomful of past ministers and director generals involved in the tangled web of deceit and manipulation at the edge of business and commerce  – some of it linked to Gupta e-mails, some just motivated by plain criminal greed.

But all Energy Portfolio Committee meetings on any subject have now been abruptly halted in the light of matters involving the possible suspension of the DG of Energy Policy and Planning, Omhi Aphane, (a long-time and experienced government staffer) on on an issue regarding of nuclear consultancy fees, according to the media.   It would appear a whistle blower is at work in DoE.

Minister Kubayi is certainly causing waves and many hope that the responsibility for Eskom is to be handed over to this Minister from the DPE, back to where it was originally rooted with all other energy resources.

Untouched as usual

The issue of debt relief legislation under the aegis of Chair Joan Fubbs of the Trade and Industry Committee will be important as will meetings on energy involving electricity, IPPs, nuclear and clearing up the PetroSA mess.   But first, this committee should sort out what is to be done with a draft Copyright Bill amending and updating anchor legislation, laws that have not been touched since 1976.

What DTI have so far come up with has legal experts in complete confusion since there appears no understanding by DTI in their draft of the difference between paintings, works of art and the high-tec world of data authorship which underwrites commerce and industry and on which depends a massive IT industry both here and mostly abroad.   Fortunately, with a person like Joan Fubbs in charge, basic misunderstandings such as this will get sorted out.  However, that such unintended consequences might have occurred worries many.

The various Finance Committees will meet for joint sessions for a number of tax and money Bills and amendment proposals and Posts and Telecommunications will hear its Department’s comments on public hearings, all regarding the ICT White Paper Policy.

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Parliament embroiled in state capture

State capture emerges as a fact  …

An impression might have been given recently that parliamentary meetings only occur as and when e-NCA cherry picks a meeting for the evening news on the subject of state capture.   Therefore, one might think, every parliamentary meeting is either about the SABC or Eskom, Transnet or Denel.   Nothing could further from the truth.

Although the perverse facts behind the carefully planned act of state capture, involving Bell Pottinger, the Gupta family, their friends and associates, the actual crime in parliamentary terms  is non-disclosure to Parliament committed by public servants in the name of the same “prominent” persons, plus lying and falsification in terms of an oath taken to serve the nation.

Parliament, as a structure, has remained untarnished as the second pillar of separated powers. It is the players who have broken faith.

Hundreds of meetings

This is not to say that truth has always been exercised in Parliament in the past nor to claim that from the President down to backbenchers, all have been unaware that fake news has been fielded in parliamentary meetings.  But what is heartening is that the parliamentary process has been an enormous hurdle for the crooked to overcome.

In any one of the four sessions a year, each roughly equating in timelines to the terms of a school calendar, there are some three to four hundred committee meetings in the National Assembly and National Council of Provinces.

The subject matters covered represent the activities of forty seven government departments, literally hundreds of SOEs and all legislation which is tabled for the Statute Book must be debated.   All this is conducted with two audiences. It is a daunting programme.

Standing out

But soon it was noticeable that it was the meetings on SOEs, particularly those with their own boards and where tender processes were involved, that there was  a common theme emerging.   In each case it was a matter of strategic decisions not being taken to Parliament for approval; balance sheets not squaring up to meet the requirements of the Auditor General and the sudden arrival of newly appointed board members with little or no experience of matters under discussion.

It all stood out like a sore thumb.   Meanwhile, investigative journalism was to become a major force in parliamentary affairs.

In fact it was the parliamentary system that began slowly to reject  the manipulative processes being fielded.  Many an MP started demanding investigative reports from Cabinet ministers with cross-party support;  parliamentary rules were enforced in order to restrain the passage of  mischievous legislation and the pointing of fingers and the use of the kind of language that is only allowed under  parliamentary privilege contributed to the wearing down of the cover-up machine.

To the rescue

Eventually, between the AmaBhungane team and the BDFM team and others such as City Press, investigative journalism saved the day.   It could then be seen in writing that many of the issues so slowly being uncovered in Parliament, where nobody could pierce the web of intrigue and see the picture in its entirety, the full story was beginning to  take shape.

The extent of the theft is still not known and still emerging are new players in the list of “prominent persons”.  There is also still no apparent follow up by either SAPS or the Hawks, nor matters acted upon by the National Prosecuting Authority.

Worse, many do not expect this to happen – so cynical has the taxpayer become and so deep are the criminal waters.  But, as the saying goes, “every dog has its day”.

In the engine room

Despite the bad publicity for Parliament and the institution itself being under fire as to whether or not Parliament is a reliable democratic tool, a good number of MPs, especially opposition members, have been slaving away.     This is despite the appointed Secretary to Parliament, Gengezi Mgidlana, going on “special leave” whilst allegations into his possible violations of the PMFA are investigated.

Mgidlana was appointed as “CEO” of Parliament by the Presidency.     His jaunts overseas accompanied by his wife are the subject of investigation and have been the cause of strike action by parliamentary staff for nearly a year, whilst their own pay packets are frozen.

This matter seems to have mirrored the very issues being debated in Parliament.   Fortunately and most responsibly, the strikes have been orchestrated so as to have little major effect on the parliamentary schedule

Top heavy

Meanwhile, despite the top guy being a passenger in his own system, notices are going out on time, the parliamentary schedule is available every morning and the regular staff are hard at it. Now is the time in the parliamentary diary when the April budget vote is activated; money is made available and departmental programmes initiated.    Hearings have been conducted on many important pieces of legislation.

There is an extraordinary team in Cape Town which runs Parliament, especially researchers and secretaries to committees.

Train smash

Added to this, if it was not enough, a normally busy schedule was further complicated by urgent meetings on poor governance; tribunal findings; briefings for new members of Cabinet and the fact that to match President Zuma’s ever-expanding Cabinet with appropriate government departments there were some fifty portfolio and select committees all being served by a reduced Parliamentary staff.

The extent to which corruption is embedded into government’s spending programme makes parliamentary oversight a difficult and lengthy task, especially when under performance or poor governance matters are involved.   It all reflects the times we live in. In one day alone there  is not enough parliamentary time for a whole range of public servants to be “in the dock” to answer questions on matters involving millions of rand.

No court of law

To be fair, it is often as difficult for the respondent to get around to answering as it is for parliamentarians to get to the truth.  When you know the boss is on the take, how does one answer?   Issues tend to go around in circles.

Sifting out the rhetoric when the truth is shrouded in political intrigue is no easy task in Parliament especially when people are frightened of losing their jobs.

As the millions of rand stolen turn into billions of rand during the early part of 2017 and parliamentary committees were introduced to new “acting” directors in charge of government funding, TV cameras popped up in all corners of the parliamentary precinct.    One was constantly tripping over metres and metres of black cable to caravan control rooms enabling the public to watch the latest saga.

Camera shy

At the same time, Parliament is clearly now being side-lined by members of the Cabinet or avoided by Directors General and this maybe because of this new found public form of entertainment of spotting the good guys and shaming the captured ones.

In the past, the abuse of parliamentary rules by the incumbent President used to be considered as country-boy innocence but now the position has changed.     As any election approaches, parliamentary rhetoric always descends into low grade babble in the National Assembly but this time it is very different.  there is a clear disconnect between Parliament and the President.

With the addition of the now infamous “white minority capital” campaign to the debate, orchestrated ostensibly as we now know from London (as probably was the over employed expression of “radical economic transformation”) most of the forty-seven ministers and deputy ministers hammered out the same slogans in their budget vote speeches 9r at any given opportunity to speak, as if orchestrated.

Looking back: 2nd session

Going back to the beginning of 2016/7, Parliament has ploughed through the Nkandla mess; the SABC crisis; the Eskom governance exposures; the troubles at SAA; the failures and manipulations at Denel; crookery at Transnet; the PRASA scandals and in the losses at PetroSA, the latter being just sheer bad management it seems driven by political desire.

All of this has involved a lot of committee time far better spent on enlightening issues to assist the economy and create jobs. The “blame game” simply led to a jungle of write offs with no explanations but, suddenly, an ill-timed series of cabinet re-shuffles rattled a hundred cages.

D-day

Friday, March 31, 2017 will always be remembered following a period of stun grenades and parliamentary brawling in the House as President Zuma announced yet another set of choices to make up his Cabinet.  In committee meetings, in no less than eight portfolios, new or changed Ministers and Deputy Ministers appeared at meetings with little background.

The second session of the 2017 Parliament had this extraordinary start and on it ending, the arrival of the Gupta emails has now confirmed and named many involved in the whole issue of truthful depositions before Parliament.  No doubt a lot more shocks are yet to come.

The next session of Parliament will represent one of the arenas where the gladiatorial challenge will be played out on state capture together with the battle to avoid fusion in the separation of powers.

It is to be hoped that spring at the end of the third session will herald more than just another summer.

 

Previous articles on category subject
Zuma vs Parliament – ParlyReportSA
Parliament awaits to hear from Cabinet – ParlyReportSA
Parliament goes into Easter recess – ParlyReportSA

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Parliament goes into Easter recess

….editorial….

Now you see it, now you don’t

……    It has now become almost impossible to avoid the use of the time-honoured expression “politics aside” when following legislative developments in Parliament.

The body politic affects most things all the time – from drafting a Bill to a
government media briefing, from debating a departmental investigation to public hearings on new legislation. It all involves the ideology of who is in charge.

In fact, the Oxford Dictionary describes “politics’ as follows: the activities associated with the governance of a country or area, especially the debate between parties having power.

From this one can see how politics will always continue to dominate government policy, legislation, and the parliamentary process, since in the end all permeates down from Cabinet decisions. That’s the way it works. Until of course the moment occurs that corruption, cronyism and state capture dictate the parliamentary process itself.

Then the fine line between policy and politics gets rather tacky. Shady motives such as personal gain or protection from the law become evident. What started out as well-meaning policy can get warped by politics and the passage of legislation becomes erratic, if not unconstitutional.

Coded language

Clearly there are now two Cabinets in South Africa. Also, there are various government departments that tend to follow one faction or another, all reporting to their respective portfolio committees. Of these, some seem to adhere to parliamentary rules on oversight and others seem to be less deep in their probing.

This explains why Jackson Mthembu, Chief ANC Party Whip who conveys ANC messages to the party loyal in Parliament, plays such a critical and pivotal role.

When it becomes ‘a given’ that those in control willfully use the top-down structure to their advantage and become joined at the hip with the party list system, then the decision to follow the orders of the party begin to involve a fear of being unable to pay the school fees or pay the lease on the recently acquired BMW.

It is the party list system that is our constitutional blind spot. It encourages cronyism, defined once again in the Oxford Dictionary as: the appointment of friends and associates to positions of authority, without proper regard to their qualifications.

No change

When this aberration of the democratic process occurs on a regular basis, the expression “politics aside” seems to come back into usage. This time for a different reason.

Understandably, one cannot go through the whole laborious process in every debate and with every turn of inexplicable behaviour explaining the manipulation of facts or non-disclosure of relevant information; the influence that certain business persons have upon policy decisions; or the behaviour of state department heads who seems oblivious of their duties.

Therefore politically-correct shortcuts become necessary in order that one’s own opinion is not involved. It’s a sort of coded language that straight up and down people use as a replacement for the real thing.

So, politics aside, President Zuma is still holding up the Financial Intelligence Centre Bill to combat money laundering. Politics aside, Minister of Mining, Mosebenzi Zwane, is still attempting to get fifty-six changes adopted under the already approved Mineral and Petroleum Resources Amendment Bill and, politics aside, the Expropriation Bill is back with Parliament once again.

The good news

Far more interesting is that, politics aside, the separation of powers is still working to a greater or lesser degree; the legislative process is still being respected by most and irritating some; and the Constitutional Court is still out there as our standard bearer, minus a number of computers.

 

…. and, politics aside, we could be doing so much better.

editorial.... parlyreportsa....27 march 2017

Posted in cabinet, earlier editorials0 Comments

FIC Bill hold up goes to roots of corruption

Bill originally approved by Cabinet

.….. sent to clients 20 Aug…..Going to the heart of the issues facing National Treasury on money launderingzuma9 and financial crime, or in this specific case the Financial Intelligence Centre Amendment Bill (FIC Bill), is the failure of President Zuma to give assent to the Bill and to sign it into law.

The delay in adding his signature gives yet another signal that there is lack of interface in constitutional terms between the Presidency, the Cabinet, National Treasury and Parliament and all of this adds more uncertainty in the economic sphere.

fic-logo-2The main objective of the FIC Bill is to conform with international pressure placed upon South Africa to update its governance ability to monitor international financial crime. During the passage of the Bill, however, it became quite evident to interested parties that the Bill could expose a lot more about South Africa’s own internal money laundering, inflows and outflows, than simply making a contribution to the global money laundering problem.

This, of course, was the original point made by international agencies when calling upon countries to agree to such legislation.    Countries have to clean up their own affairs in the process.

Crime busting

Africa MoneyThe Bill intends enhancing South Africa’s anti-money laundering (AML) processes to combat more effectively the crime of financing of terrorism to be achieved by amending the anchor Financial Intelligence Centre Act “so as to define certain expressions”.

However, in exposing monies destined for terrorism, a lot more than just terrorism could become evident in the category to be classed as “prominent persons”, a fact which has been endlessly debated in Parliament and why the Bill has come to the fore in the media.

More entrants

The fact that some in the Cabinet may not like the preamble to the Bill is evident, particularly expressed byzwane Minister Zwane in his ridiculous call for a judicial investigation to investigate the motives for calling the banking sector to report to Treasury on individual groupings and persons and for an investigation into the banks themselves for closing the accounts of certain “prominent persons”.

The target of Minister Zwane’s diatribe, the major banks, are a grouping simply preparing for the FIC Bill to become law since they know it was tabled by the Minister of Finance, having been approved by the Cabinet in the first place and having made considerable input to the parliamentary process. Also they must realize that the Bill in turn will make considerable demands upon them in terms of time and money and will be a test of integrity for all.

Split in the ranks

ramaphosaThe delay, even if for a moment, is one of many factors giving rise to the belief that the Cabinet is “at war with itself”, a fact which Deputy President Cyril Ramaphosa admits. President Zuma attempted dismally at first to distance himself from Minister Zwane’s attack on the banks, then seemingly relented but suspiciously will not let the banks proceed with the FIC Bill by making it law to set up the paper trails.

Commentators say the President is effectively involved in a web of issues involving alleged “state capture” and perhaps therefore instructions to hold up the Bill maybe upon advice from elsewhere from parties involved in the bigger picture.

No stroke of the pen

However, the very act of signing or not will eventually show if it is the President is alone in this matter since a cabinet statement in 2015 stated that the Cabinet had approved for the Bill for tabling.Parliament awaits, holding its breath, for clarification from the Presidency.  President Zuma is now, of course, embroiled on issues over the Public Protector’s report on “stature capture” by the Gupta family and, like so many other important state issues, the FIC Bill has gone on to the back burner.

In the meanwhile others, including actors who would definitely be defined as “prominent persons” as defined by the new Bill, are now crowding the stage and expressing their views, so the FIC Bill must be touching a raw nerve somewhere.

The old argument

jimmy-manyiDespite the Bill being passed by State Law Advisors, now one Jimmy Manyi, previously a corporate public affairs head, a DG in the Department of Labour and previously a Cabinet spokesperson and recently President of the Progressive Professionals Forum – all in a short period of time – has lodged a constitutional challenge to the Bill, presumably on the basis of invasion of rights regarding pr1vacy. 

MPs have complained that the Bill in question has been debated at length over one year at portfolio committee level; hearings were conducted with public expression therefore being accounted for and finally the Bill was passed by a unanimous vote in the National Assembly.  Whether nefarious or not, one must assume that any delay by the President is for good financial reason and bearing in mind the call is in fact an international call to upgrade the SA money laundering watch, the stakes are high.

At this stage nothing is stated as fact and rumours abound.     An exasperated Minister of Finance Gordon Pravin stated in an interview run by E-NCA, “Well if I can’t get the Bill through then we must just try something else.” He added, “They had just better come and arrest me. What have I done?”, he asked.

The aim

pravingordhanIndeed, the parliamentary record shows quite clearly what Minister Pravin has done.    By introducing this Bill and having had it agreed to in the National Assembly, a paper trail  is to be established in conjunction with banks on any suspicious movement of money involving “prominent persons”.   Locked cupboards will be looked into therefore and it seems as if someone or a section in the Cabinet  has had second thoughts about the Bill.

Hopefully, the stall is only temporary and the Public Protector’s report is released

Aims of Bill

Treasury originally said in their briefing to Parliament that the four principal objects of the Bill were to align the country with international standards on AML and to counter terrorist bodies; to enhance customer due diligence within financial institutions; to provide for the implementation of the UN security council resolutions relating tomoney laundering the freezing of assets of persons suspected of financial crimes; and for the FIC to introduce a risk-based approach by financial entities to the current aspects international financial crime.

Treasury countered any argument that dis-investment would be encouraged by the Bill with the answer that a lack of compliance with international rules by South would be worse but now the silence on the FIC Bill seems to have taken a back seat in National Assembly questioning in the face of rows over state funding, “state capture” and individual financial investigative probes.

Prominent persons

yunus carrimMuch debate, took place at the time within the Standing Committee on Finance when the Bill was originally debated over the definition of “prominent persons both domestic and foreign”. These were the persons who were to be monitored as part of the Treasury’s appeal to banks “to know their clients better”. The meetings were chaired by the obdurate, diligent and politically respected Yunus Carrim (SACP) and finally recommended to the House.

Treasury’s Ismail Momoniat was at pains to state to Parliament at the time that “there was no implication or presumption that prominent persons being investigated were presumed to be involved in any financial crime.”

Getting to know you

Probably the provisions most likely to affect entities operating in South Africa are the clauses affecting due diligence. Those that are accountable in terms of the Act will be required to undertake ongoing customer due diligence overviews in order to establish the identity of “the beneficial owner” and a customer’s full identity and whereabouts.

This might be where the problem lies for Cabinet, not necessarily just about the “G people”, as referred to indavid maynier Parliament by David Maynier, Shadow Finance Minister (DA), but which might involve issues of party funding – the sources of which at the moment do not have to be declared to Parliament.

Objective views

As put by Roger Southall, Professor of Sociology, University of Johannesburg and quoted in précis form by Creamer Polity, “The ANC is appropriately anti-corruption in its official stance, and indeed has put in place important legislation and mechanisms to control malfeasance. Equally, however, it has proved reluctant to undertake enquiries which could prove embarrassing.” Parastatals still account for around 15% of GDP, Southhall notes.

Whilst Minister Lynne Brown said she was determined to overhaul all state entities, nobody its seems was ready for President Zuma to assume the chair of the new idea of a State Owned Enterprises Council, meaning that he is in charge of para-state strategy – the policy of which was announced many months ago in that government wants a greater slice of the R500m spend on goods and services to go to emergent suppliers.

President Zuma said in Parliament on that issue that the reason for the consolidation was to bring about cross-cutting coordination as a policy within state utilities.

Getting control

Southall continues in his article in similar vein, “The ANC continues to regard the parastatals as ‘sites of transformation’ with certain corporations distributing financial largesse to secure contracts and favour from government. However, their success in so doing is hard to prove given the secrecy of party funding. Secondly, ANC politicians at all levels of government have sought to influence the tender process in their favour.”

On the good side, the Department of Public Service and Administration has, for instance, a draft a Bill underway for Parliament that will require all government departments to put in place measures to prohibit employees and those in special consultancy positions from “directly or indirectly” doing business with government.

Furthermore, the Public Finance Management Act, signed by President Zuma, has proven to be a well-tuned tool to control misdirected state expenditure. The FIC Bill will be the anchor legislation needed to dig deeper into AML money movements.

Who blinks first

fic-bookWith the FIC Bill, the next move then must come from the Presidency, if he remains in  office, to give good reason to send the Bill back to the Parliament despite the agreement of the South African banking system to comply with Treasury requirements to report. This is a day-to-day developing issue.

Quite clearly, some banks have forestalled their problems by refusing to handle certain business banking accounts of “prominent persons”, perhaps pre-empting that the Bill would receive Presidential assent and thus earning the ire of Minister Zwane “in his personal capacity”.

Whether the FIC Bill might get further to the very roots of the party funding system is another matter but for the moment the focus was on “prominent persons” and the necessity to get the banks into action in terms of the law.

Meanwhile, the Portfolio Committee on Trade and Industry will continue to debate the “Twin Peaks” legislation which will again tighten up on banking and financial procedures on both regulatory and prudential aspects. But here again, there might be delays.

Previous articles on category subject
Red tape worries with FIC Bill – ParlyReportSA
Parliament, ConCourt and Business – ParlyReportSA
PIC comes under pressure to disclose – ParlyReportSA

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Restitution of Land Rights Act reversed

Concourt says land bill “improperly” passed

…,sent to clients 25 August….  The Constitutional Court has upheld anconstitutional-court application that amendments to Restitution of Land Rights Act were improperly processed by Parliament.  The Bill was tabled by Land Reform Minister, Gugile Nkwinti.

Groupings opposed to the legislation successfully argued that the amending Bill went through Parliament without sufficient consultation with affected parties.

The proposal made by the Bill was that further claims may be lodged going back to the 1913 Natives Act but the Bill, about to become an Act, had been in any case “put on hold” for 24 months to allow for existing outstanding claims, some 8,000 of them in terms of previous legislation, to processed first.

Existing claimants brought that particular application against the Bill on the basis that those who lodged claims under the new amendment to the Act would be “jumping the queue” and their claims might or were being ignored. The re-opening of the restitution of land process was therefore greeted by a mixed re-action, a fact not expected by the ANC amongst the populace concerned.

More haste less speed

madlangaOnce again the particular habit now regular of the governing party of hammering legislation through Parliament at the last minute before recess has bounced back on the Cabinet and the Presidency.    Justice Mbuyiseli Madlanga said in his finding that the Constitutional Court could find “no cogent reason” for the apparent haste to sign the Bill into law.

He said that there had been a complete lacking in the required public consultative process by all nine provinces as the Bill went through the NCOP process of approval. He described Parliament’s behaviour with regard to the passage of the Bill as “improper”.

How it started

When the Bill was first tabled in a meeting of the National Assembly’s Rural Development and Land Reform Parliamentary Portfolio Committee, Minister Gugile Nkwinti confirmed that the whole process of land restitution for black persons dispossessed of their land was to be re-opened for a period of five years.

Under questioning,he confirmed that no constitutional changes were envisaged, despite the fact that the new Bill would mean an Act that backdated claims to 1913.    Critics of the Bill noted at the time that the tabling of such legislation was, as they put it, “politically motivated” in the light that it was being processed before national elections and with the then forthcoming provincial elections in mind just around the corner. The outcome of those elections would confirm the Minister’s fear and that of the Cabinet.

Critics also stated that there was insufficient time to process the Bill properly. ANC MPs chose to ignore this warning. Thw whole process has therefore been a waste of public funds.

In the kitty

Minister Nkwinti then announced that Cabinet had set aside R47bn for theGugile_Nkwinti envisaged exercise over a period of five years. Opposition members were again alarmed, stating the country had neither the resources nor court time to process such a plan and, in any case, the Department of Rural Development and Land Reform was already facing an uphill struggle to process and finalise the existing claims it had on their books. Opposition members also called for sight of Treasury approval.

During the course of the Minister’s departmental presentation on strategy leading to the budget vote a week later in Parliament, when confronted by opposition MPs asking for a direct answer as to whether he would call for constitutional change on property rights or not, he replied that there was “no such question arising.”

The whole truth

Since that time the tandem Expropriation Bill has also been returned to Parliament unsigned and similarly passed in haste before a recess but, in this case, in the light of a possible adverse opinion by the Constitutional Court.

Minister Nkwinti chose to issue a statement on the the passage of the Expropriation Bill upon its being voted through the National Assembly although not in the domain of his Ministry.

cronin2This statement completely contradicted the declared motivations of Deputy Minister of Public Works, Jeremy Cronin, who had steered that Bill through Parliament declaring his legislation to be necessary for public works to execute infrastructure projects.

Nkwinti’s statement  claimed  that the Expropriation Bill “would bring about the possibility of at last of speeding-up land restitution and reform” thus laying the groundwork of his new land Rights Bill and contradicting the assurances of Cronin.

The numbers game

In his original briefing on the tandem Restitution of Land Rights Bill, Minister Nkwinti stated at the time that since its inception, the state’s restitution programme had benefited some “370,000 households”.    Normally one refers to “claimants” but it was his way of getting to his point using self-serving mathematics.

This meant, he said, that some “1.83m persons had benefited so far from theland-reform process, as against an estimated 3.5m people who had been forcibly removed from their land as a result of colonialisation and racial and discriminatory laws”.

A new closing deadline for lodgement of land claims was set by the Act as mid-2019 and a booklet on how to lodge a claim published.  Mobile lodgement offices were to visit all areas, the department told subsequently told MPs, and the lodgement process required no fees.

Tough words

Whilst the Constitutional Court has now re-affirmed that the right to restitution “could not be overstated” and that “restitution of land rights equals restoration of dignity”, Justice Madlanga was not prepared to overlook the fact that the time line of the parliamentary process had been manipulated.

“As an example, the process of public participation in the Northern areas was reduced to a shambles by haste”, he said, “and as a result of the truncated process of the NCOP, the whole parliamentary procedure had been tainted”. The NCOP was found to have “not applied its mind to the task.”

Give it time

Pending re-enactment of the Act, the Commission on Restitution on Landland-claims-court Rights may continue to receive claims and acknowledge receipt but only process them once existing outstanding claims that had a closing deadline of 1998 are finalised. After 24 months, further consideration can be made on the possible re-enactment of the legislation.

In conclusion, Opposition parties fear that the new Act will allow traditional chiefs with the additional powers granted in terms of legislation favoured by President Zuma to supersede rights on land already granted to communities.

One way only

Disquiet was also expressed by some MPs with the land acquisition claim alternatives as financial compensation was mainly the choice for claimants.

Some MPs expressed the view that they were “uncomfortable” with a monetary solution as a solution to dispossession since this almost amounted to a bribe.

DA MP Thomas Walters said in his view the reason for the slow rate of land occupation was not, as the ANC claimed, the result of whether or not there was a solution on the willing-buyer, willing-seller principle but rather a reflection of the fact that 92% of land claimants preferred to take cash pay-outs instead of working the land and creating jobs.

Minister Nkwinti strongly denied this as did the Department of Rural Development and Land Reform.

Previous articles on category subject
New approach to land reform – ParlyReportSA
Land reform: Something very sad is going on – ParlyReportSA
Minister says need for legislation on land reform a priority
Agri-SA gives views on minimum wage – ParlyReportSA

Posted in cabinet, Land,Agriculture, LinkedIn, public works, Special Recent Posts0 Comments

Anti Corruption Unit overwhelmed

Focus on top down elements of patronage 

….editorial….As Parliament went into short recess, the Anti-Corruptionhawks-2
Unit, the combined team made up of SARS, Hawks, the National Prosecuting Authority and Justice Department, divulged that some 400 cases of public service corruption have been “successfully prosecuted since 2014”.

Out of hand

To have that number of public service thieves arrested is no small number but there is a worrying afterthought.   One wonders how many Anti Corruption Unit cases have been dropped or unsuccessfully prosecuted, given the fact such icebergcases are difficult to prove and there is often poor performance of by investigation teams. Like an iceberg, probably only one seventh of corruption in the public service is apparent.

sars logoCases currently under investigation in both the public and private sectors were given as 77, now 78 since Tom Moyane, head of SARS and member of the Anti Corruption Unit itself, at the time admitted to the Committee that he had not spoken to the Hawks about his second in command, Jonas Makwakwa.

Laundry list

The question by MPs was about the mysterious R1,2m deposited into Makwakwa’s private banking account.  According to reports it appears Moyane has subsequently rectified the situation and reported the event.  So yet another enquiry must start, which will only exacerbate the relationship problem between Moyane and the Minister of Finance, Gordhan Pravin.

Added to these national events in Parliament is the fact that corruption investigation remains particularly problematic at provincial and local government levels where it can go on undetected. The story emerging from the Tshwane Municipality is a case in point. The National Council of Provinces has no part to play in such matters.

Top down problem

Over the last few weeks, events in the parliamentary precinct have dominated the domestic media and consequently there is no need to repeat what is patently obvious.  South Africa clearly faces a leadership problem as far as financial governance and policy initiatives are concerned.

hawks logo
Doubt has placed, in the media in main, on the leadership integrity of the Hawks, NPA and, to some extent, with the Anti Corruption Unit inasmuch as their relationship with the President is concerned. A weary public waits for the next story of public service patronage.

Public service heads appear at times uncomfortable when they are reporting to Parliament and seem to be looking over their shoulder at times to see if what they have done or said is politically correct. Troubling is the fact that regulatory bodies are at odds with the ministries that founded them.

Bottomless pits

Although progress has been made on the national level in developing legalmoyane frameworks with provisions and regulations to address theft of public funds, such as the Prevention and Combating of Corrupt Activities Act and the Public Finance Management Act (PMFA), the good guys are still behind in the race to catch the bad guys.   A sad conviction rate of 28% on cases brought before the court by the Assets Forfeiture Unit overall was quoted to the Standing Committee.

Poor leadership

On the same subject, the surprising failure by the President to sign into law the Financial Intelligence Centre Bill to fight money laundering in terms of international prudential agreements has represented a further setback. Hopefully this is only temporary since the country needs to join up the dots to encircle organised corrupt financial activity.

Worse, some government SOEs appear to conducting their own affairs without approval by Treasury. Cabinet members are involved. Witness the extraordinary offer made by the Central Energy Fund, reported in the media, to Chevron for its refinery in Cape Town and downstream activities in the form of 850 fuel outlets, presumably backed by the funds emanating from the sale of the Strategic Fuel Fund (SFF) reserves unauthorised by Treasury.

Upstream mayhem

Tesliso MaqubelaDDG Tseliso Maqubela of Department of Energy has now told the media that SFF sold the 10 million barrels of crude in storage in December at rock bottom price of $28 a barrel to a unit of Glencore, Vitol and a company called Taleveras. The condition of the sale was apparently, Maqubela said, “that the oil (will) not be exported and so the government considered it remaining as part of its strategic reserve stockpile.”

Shadow Minister of Energy, Pieter Van Dalen MP, citing Business Day, said the sale has been connected with Thebe Investment Corporation – “the ANC linked investment arm”, he added.   Vitol is the company that has allegedly bought the fuel stock and which owns Burgan Cape Terminals next to Chevron, the deal being linked by Van Dalen with Thebe for the building of its new storage tanks. Burger had just been awarded a 20-year lease by Transnet for land needed.

cape-town-harbourChevron brought to Parliament its case against Burger saying it was improper to build a new tank terminal next to its refinery for Burger to store oil for trading whilst they had no Transnet pipeline to Gauteng as did others from Durban but the chair of the portfolio committee accused Chevron of monopolistic behaviour. Subsequently the complaint was rejected. It was shortly after that Chevron announced its intention to sell its refinery.

Twisting path

Whether the Minister of Energy, Tina Joemat-Pettersson knew all of this when she appeared before the Portfolio Committee of Committee on Energy,tina-joematt her attendance covered in this report, is a moot point.   If she did know something, she is culpable in that she withheld the information, both from Parliament and possibly Treasury.

Alternatively, if she didn’t know that an offer was made to buy Chevron and that SFF had sold the state’s oil fund’s reserves to Swiss giant Vitol, possibly involving Thebe Investments, she should resign immediately as an incompetent.  Where the R4.4bn odd involved in the sale by SFF has landed up is not clear and when the oil will leave SFF’s Saldanha terminal and move to Burger in Cape Town is also not clear.

Clearly, in our view, this has been a major transaction known about at Cabinet level and the DA has called for an urgent enquiry. This will presumably bring the Asset Forfeitures Unit’s number of cases under investigation up to 79.   And so it goes on.  Tegeta and Eskom included.

Nothing but the truth

One senses a continuing cover up by government departments in reporting to Parliament for fear of upsetting any Minister’s apple cart, whereas Parliament should be a refuge of openness, accountability and public oversight on state activities and act as an arbiter to represent the people of South Africa.

vincent-smithIn the darkness, we saw a flash of light and a refreshing change when ANC MP, Vincent Smith, in grilling the Hawks as part of the Anti Corruption Unit interview, reminded them fiercely “This Is Parliament. If you cannot speak the truth, then do not speak at all.”  Whilst that remark may encapsulate the current problem, it may be also the cause of some Ministers and government officials choosing not to speak at all.

Legal jungles

Concurrent with the number of judicial enquiries into strange contracts, bad senior appointments, misuse of privileges and a litany of unaccountable expenditure without proper approval, what also has increased is the statement used by many when speaking to Parliament, including ministers, that the full facts cannot be given “because the matter is sub-judice”.

The number of matters that are sub-judice would not be so great if powers were given back the Treasury to re-assume its proper place in the parliamentary process.  Expenditure, if not approved by Treasury, would never see the light of day.

In conclusion

parliament 6Bad governance and corruption is the fodder that feeds the right wing anger sweeping the world and creates the spectacle that we see almost daily in our National Assembly, the creation of which institution is supposed to be one of the three pillars supporting the Constitution.

Previous articles on category subject

 Parliament, ConCourt and Business – ParlyReportSA

Parliament and the investment climate – ParlyReportSA

Anti-corruption law is watered down, say critics – ParlyReportSA

Nkandla vs NDP: the argument rages – ParlyReportSA

Parliament closes on sour note – ParlyReportSA

 

 

 

Posted in cabinet, Earlier Stories, Facebook and Twitter, Finance, economic, Fuel,oil,renewables, Home Page Slider, Justice, constitutional, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Parliament awaits to hear from Cabinet

Same Parliament, same Cabinet, different mood

..editorial……Parliament has now resumed with the same Cabinet, the same 400 MPs, the same ANC Allianceparliament 6 majority instructed whips and the same names in the party benches but the ambiance is very different.     This subtle fact, however, matters little in the immediate future.   Legislation before the National Assembly (NA) will still be subject to a simple numbers game when it comes to voting. Well, almost.

In the case of a Section 76 Bill, that is a Bill that needs not merely the concurrence of that portion of the 400 MPs that sit in the NCOP but subject to full debate by all nine provinces and a mandate returned in favour or not, there might be the beginnings of healthier opposition. Power at local level has been emboldened since Parliament last met.

So far, matters of consequence have been that the Department of Energy has presented its REIPPP plan with support from most other than Eskom with no Minister present and the Mineral Resources Portfolio Committee has re-endorsed a revised Minerals and Petroleum  Resources Development Amendment Bill for process by the NCOP using its ANC majority. Again no Minister was present. Eskom will be presenting on this and matters regarding coal any day.

Old tricks

jacob zumaHowever, presuming the picture in Parliament stays as it is until the 2019 national election with Jacob Gedleyihlekisa Zuma at the helm as President, it will be interesting to see what type and how much legislation is hammered through the NA by the ANC using the same old tactic of deploying party whips with threats of being moved down on the party list system for a total majority, timed last year in a rush just before a recess.

Notably, now in the case of three Bills sent for assent after being voted through, the three were not signed by President Zuma into law acting on legal advice.

With this trio now back with Parliament on the grounds of either suspected unconstitutionality and/or incorrect parliamentary procedure, the issue is now whether the coterie of Cabinet Ministers that surround the President, with Director Generals appointed by and who report to those Ministers, will take Parliament more seriously.

Not hearing

Good advice is not good advice when it comes in the form of a last minute warning not to put signature to any Bill thereby turning it into an Act of law. Plenty of such advice not do this in respect of a number of Bills was previously given during parliamentary portfolio committee debate, at parliamentary public hearings from affected institutions, business and industry and even earlier in public comment when the Bills were first published by gazette in draft form.

Similarly, the lesson seems not to be learnt in higher echelons that the independent regulatory entities are also not to be ignored – institutions from the Office of the Public Prosecutor to ICASA, from NERSA through to the board of the Central Energy Fund and from National Treasury to international courts, the UN and international bodies protecting human rights. Parliament is due to hear from ICASA any moment.

Most worrying, however, are the attempts to by-pass Treasury when presenting policy to Parliament. Ideological bullying can bankrupt a country in no time.

Such issues as Minister Aaron Motsoaledi’s National Health Insurance dream and Minister Joemat-Pettersson/President Jacob’s Zuma’s dream of six nuclear energy reactors – plans that the country should not possibly not countenance from a financial aspect – have neither been presented to Parliament in the proper national budget planning form or officially and financially endorsed.

Missing money details

Minister of Health, Aaron Motsoaledi, has gone as far as a White Paper to Parliament on the NHI and Minister Joemat-Pettersson has briefed Parliament on nuclear tendering. Treasury have said nothing about a financial plan in each case. Money is short, as evidenced by Treasury stepping in on the provisions for BEE preferential procurement. Somewhere there is a disconnect.

As for President Zuma’s continued pressure to bring traditional leaders into the equation with what amounts to two separate judicial systems and has even talked of the equivalent of four tiers of government – one therefore not even reporting to Parliament and certainly no idea of local government and nor subject to the PMFA  has its problems. President Zuma has used his ally, the Minister of Justice, to table the Traditional Courts Bill before Parliament. Opposition parties will walk out on that one, we are sure.

The Speaker of the House, Baleka Mbete, as part of the same coterie, has made a mild signal that the days of Cabinet maverick behaviour, even arrogance, towards Parliament and no respect for the separation of powers may be coming to an end. The SACP is clearly not happy. That is where the new ambiance felt in an unchanged Parliament may play an unofficial part and pressure may start building.

 
Previous articles on category subject
Parliament to open Aug 16 – ParlyReportSA
Parliament under siege – ParlyReportSA
Radical White Paper on NHI published – ParlyReportSA
Zuma’s nuclear energy call awaits Treasury – ParlyReportSA
Here it comes again…. the Traditional Courts Bill – ParlyReportSA

Posted in cabinet, earlier editorials, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Health, Justice, constitutional, Trade & Industry0 Comments

Special cabinet statement might correct damage to SA

Editorial…..

At last, a sensible special cabinet statement……

Sent to clients 15 Jan…On 13 January, a Special Cabinet Statement was issued and, as compared to previous irregular missives, the word “special” indicated some hope.   Instead of just containing the usual reasons for having to rejoice on certain public holidays, details of the passing of MK operatives and certain Bills approved, the latest document was full of economic facts and financial fiscal information placing a positive spin on the current economic gloom. At last, an acknowledgement that there is a hand on the tiller.

Clearly there has been a palace revolution, if only in this sphere alone.

As the Cabinet Lekgotla is planned, Parliament also prepares to receive it’s parliamentarians all fresh from the respective political party get-to-gethers. A lot has changed since they all parted company and quite likely a lot more is to change before MPs gather for their first meetings.

No doubt the EFF will try to make a circus out of things but nevertheless the show will go on.    However, EFF or not, it is becoming more and more difficult to sort out between political comment, which is not our focus, and the mechanics of State policy and its direction, oversight on financial issues and legislative alerts that affect business and industry.

Bad four days

Rob-DaviesRed lights are flashing in all camps, not least of which is the fact that it is difficult to tell who did the most damage to South African markets – China or President Zuma. In parliamentary terms, the Portfolio Committee on Trade and Industry seems determined to stand by SACP Minister of Trade Industry, Dr Rob Davies, in all matters dealing with BEE and trade agreements- as does DTI itself – and the Public Works Portfolio Committee seems unable to wear down SACP Minister, Jeremy Cronin, on issues regarding the Expropriation Bill.

Similarly, Lumka Yengeni’s Portfolio Committee on Labour Committee has no hope of a good outcome when it ordered, in the last session, an end to the shambles and confusion in Minister Mildred Oliphant’s Department of Labour, another Kwa-Zulu appointee of President Jacob Zuma.

Always a problem

Finally, despite some excellent MPs from all parties sitting in the Portfolio Committee on Energy, the vague report backs made to them by Department of Energy is leading to a sense of frustration in that particular Portfolio Committee which is not effective either as a result. In the area of good communications, Minister of Energy, Tina Joemat-Pettersson can only be described as a menace.

The good news is that stalwart ANC Joanmariae Fubbs remains Chairperson of the Trade and Industry Portfolio Committee  and holds the ship steady with her disciplines. SACP executive Yunus Carrim stays as Chairperson of the Standing Committee on Finance and one wonders if he will see eye to eye in view of his ideologies with Minister Pravin Gordhan.

Overlooked as well

A Jacob Zuma appointee, Ebrahim Patel of COSATU fame but a hard worker and very leftist, remains Minister ofebrahim patel Economic Affairs but even he was overlooked for Minister of Finance when the President came up with name of David van Rooyen, who, to be quite frank, we had great difficulty in recalling his presence in Parliament over the last few months. A close shave but costly.

Back onto legislation. Whatever happened to the Private Security Industry Bill nobody knows but one hopes that the President was not using it to play silly games with the Obama administration on the AGOA issue. Maybe it gets discussed at the Lekgotla. Maybe not.

Politics ahead of economics 

In the meanwhile, one hopes that the message is got through at the Cabinet Lekgotla that what the President says vitally affects each one of his citizens and that that the private and personal politics being played out at the moment are particularly damaging to the business of Parliament and its relationship with commerce and industry.

Just as importantly, there has to be a better understanding in government departments when reporting to Parliament why business institutions need clarity of policy to gain investment confidence.

opening parliamentParliament is an important and independent tool of democracy in the fight against autocracy but so many departments seem more in awe of the auditor general than they are of the need for answers to parliamentary questioning and attempts to get the truth.

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The big SA cabinet crunch

Editorial….

Cabinet hopes are Brown, Ramaphosa, Gordhan…..

Public Enterprises Minister, Lynne Brown, reports that she is to introduce as a cabinet draft, the Lynne BrownShareholder Management Bill as part of a plan to introduce leadership ability and some form of continuity for the state owned enterprises (SOCs) under her control.   This includes Eskom, Transnet, Denel, SA Express, Alexkor and Safcol.

We hope this is the start of something big.

The last few weeks have been an exercise in disaster, so let’s try and take a positive spin on things from a parliamentary viewpoint. Whilst troubled SAA is now an independent, falling under National Treasury and if President Zuma minds his own business, Minister Pravin Gordhan is to sort out National Treasury itself and also the troubled SARS, which he re-designed in the first place and which became such a success working with Trevor Manuel.

More problem children

Meanwhile, PetroSA is in real deep water falling, the entity falling under Central Energy Fund (CEF) reporting to Department and Energy (DOE). With Minister Joemat-Pettersson not back from COP21 or wherever, the country still faces some serious energy issues. But at least the PetroSA problem is now all in the open, with somebody obviously having to take over the reins and the mess, probably CEF itself.
Oddly enough there are people in CEF who know exactly what the problem is but once again politicians pushed experts in the wrong direction, it appears.

In addition, the Passenger Rail Association (PRASA) is very much on the slippery slope and, together with SANRAL, both present highly contentious transport issues which are now in the hands of Minister Cyril Ramaphosa to untangle. Troubling times indeed.

Public Enterprises comes to the party

lyne brown 2Now Minister Lynne Brown appears to be getting the senior management of her portfolio under control and whilst we could still have shutdowns at Eskom she says, because “machines can break down unexpectedly”, the leadership is there she says, as is the case with her Denel.
Lynne Brown recently reported that there are around 700 SOCs, an extraordinary fact, but bearing in mind the fact that South Africa is reputed to have the largest head count in public service per population count, this would appear quite possible.

On the road again

With Deputy President Cyril Ramaphosa chairing an Integrated Marketing Committee, which will hopefullyramaphosa designate which entities should remain SOCs and those which should be absorbed back into their relevant departments, there appears some hope with regard to containing the ballooning public service machine which has characterised President Zuma’s presidency.

Hands off appointments

An essential element of Minister Lynne Brown’s plan is to remove the appointment to the boards of the entities under her domain away from cabinet and Ministers, including herself, to a shareholder management team that creates a leadership operational plan for all SOCs and appoints, through due process, a tightly run appointment book.

A brave proposition indeed but it does indicate that Minister Brown is her own person.

Whilst the proposals might look like state control, in fact it is a clear signal that government may have heard the message that the current system of Ministers appointing board members is not working, is open to abuse and what is worse, the consequent “jobs for the boys” system results in taxpayer’s money being thrown away through bad management, corruption and what the auditor general calls “useless and wasteful expenditure”.

On the drawing board

The Shareholder Management Bill, Minister Brown said in Johannesburg, will first need a concept paper (perhaps she means a White Paper) and such could be released after the February Cabinet Lekgotla in February, with an intention of introducing such as system by the end of 2016.

Whilst it is pretty obvious who should not be on such an appointment team, the plan begs the question of will be chosen to occupy such critical posts but it is far too early to cogitate on this one. With Ministers changing their portfolios as if it was a game of musical chairs, there is reason to congratulate Minister Brown on the statement that she herself as a Minister would be excluded from making appointments in her own SOCs.

Leadership needed

During the same address, she added that Eskom was “not out of the woods” yet and there was still not sufficient electricity to facilitate economic growth, but the leadership issue was being addressed satisfactorily with the right people being appointed. Brown said none of the entities under her control “would be approaching the National Treasury with begging bowls”.

Perhaps this is the principle being adopted behind the scenes with the SABC, which whilst not affecting business and industry other than travel costs, unlike trade and investment hurdles and industrial strategic changes, SABC is threatened by the possibility of being returned to its parent government department which at first glance appeared to be a move by President Zuma to gain control of state financed media, Mugabe style.

However, in a broad sense it seems to be Minister Brown’s idea that appointments to the top echelons running the country should be as a result of finding those qualified to do so rather than being handled by totally unqualified persons, some with solicitous intent, and others trying to retain power with dubious appointments such as having friends, in the case of the SABC, to broadcast “the truth” to specific rural audiences.

Unprincipled governance remains the one of the biggest problems facing South Africa, intrinsically coupled to (and in some cases causing} lack of growth and lack of jobs.

Croneyism

Bad appointments by Ministers and of Ministers has been the cornerstone of control by patronage, the route for corruption and the reason for sheer bad management, a practice now openly exposed but not yet controlled by any means. From a parliamentary viewpoint, let us leave it there. The rest is being said by the media but most MPs when they return to Parliament in late January 2016 will have realized that sheer stupidity can ruin their own futures and their pensions.

But if Minister Lynne Brown, in her practical and down to earth manner, can come up with the remarkable idea of Cabinet Ministers, hopefully including the Presidency as well, not interfering in who does what as far as expertise is concerned, then perhaps this can be applied to all 47 government departments and agencies.

One small step

No doubt as far as confirmation of an appointment, the Minister involved may still have to “approve” such a decision but it is worth watching the outcome of the debate on the shortly-to-be tabled Broadcasting Bill, if only to see if the appointment of inept senior appointments can be halted or reversed.

What has come out of the Eskom, PRASA and PetroSA issues is that a bad leader with no qualification or right to be in a position of leadership, or worse led by one who has supplied fraudulent qualifications, leads to frustration and anger by those with genuine skills and high academic qualifications lower down the ladder at the coalface. This is in the space of government service where technical skills are located and badly needed.

We hope Minister Lynne Brown has more of these “eureka” moments.

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Budget vote speeches: Out of touch with each other

Editorial….

DTI does flip flop on B-BBEE pointing…..

elephant and bayThere have clearly been were two big elephants in the room during budget vote speech time in the National Assembly over the last two weeks – Eskom and BEE.    Then, suddenly, with DTI reversing their decision to reduce B-BEE pointing award benefits for broad-based employment schemes – one of the elephants disappeared.  It was an amazing flip flop in government policy.

But in actual fact this represents no change, in reality – just simply the fact that the whole structure of what was proposed was seen by all as impractical, unenforceable and to industry, unacceptable.

Backstage dramas

Whether it was business and industry pressure that forced the change, the Chamber of Mines or even the trade union movement itself, after two surprising gazettes announcing reduced awards in terms of black empowerment for broad based shareholder schemes, including employee schemes so carefully Rob+Daviesworked out in the last two years, and the second gazette correcting the fact that such changes were not retrospective, what happened behind the scenes will never be known. We think it was minister Rob Davies himself who put his foot down.

In a private comment, when sympathising with the minister for having to reverse his department’s announcements so publicly, his answer was “When something goes wrong you have to put it right.”  We admire for that and told him so.

Energy issues remain at the core

As far as the first elephant in the room, the energy crisis, it remains.    Unusually, this year despite all the speeches, the amount of media briefings and portfolio committee debates, including the millions of rands spent on airfares with some forty odd departments and SOEs fielding full teams reporting, it was only the minister of energy, Tina Joemat-Pettersson, who really tackled electricity and the issue of Eskom – all the other ministers appearing avoiding the issue like the plague, even public enterprises.

Correcting the past

What indeed was noticeable, at portfolio committee level as well, that each reporting team and each minister seemed to be more anxious to report on transformation and state ownership issues, as if some very clear dictate had been received that the ANC was not delivering on its election mandate in these areas and this was really the main priority.

Whilst lip service seems to have been paid, and then only in some instances, to the need for foreign investment and issues of the country’s rating image, the lacklustre address by the minister of trade and industry gave only more credence to the belief that redress for past injustices was the only big elephant in their lives and in Union Buildings.

Transformation not economics at forefront

In the committees, where all departments have been reporting on progress towards annual targets, this now being the last quarter, the most important slide in any PowerPoint presentation (following clarity on the audit process) was always the racial makeup of the department concerned in terms of reaching transformation targets and what race ratios currently existed. The theme was obvious.

We have listened to many thousands of words spoken over the month and more is yet to come as we write, but it is all too evident that there is a massive discord between business and industry and President Zuma’s cabinet on priorities.

Final word

Trade and industry minister, Rob Davies, warned parliamentarians in his budget vote speech, when mentioning BEE matters , that members should  be aware that the President had indicated that the central task was to bring about radical economic transformation.      Which really said it all.

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Expropriation Bill has now to be faced

Much of the sting goes out of Expropriation Bill…..

landseizuresThe subject of expropriation, not necessarily of land but any property, has now reached the stage of a considerably watered down third Bill which has now been tabled and whilst there are grumbles from many quarters, it appears that the new Bill has not caused the same furore as its predecessors.

The long awaited Expropriation Bill (B4-2015) came before Parliament in the form for a briefing to the portfolio committee of public works attended by the minister of public works, Thulas Nxesi, the briefing itself remaining very much in the hands of the deputy minister, Jeremy Cronin.

Great emphasis was laid by both ministers on the difference between expropriation as a “public purpose” and expropriation “in the public interest”, a difference they said that was clearly laid out in South Africa’s Constitution.

Public purpose, public interest

nxesiMinister Nxesi in his introduction said if there was a need to put up electricity lines or build a road, it was then for a “public purpose” and he saw that there could be no argument – a statement which was later queried by opposition members.

However, minister Nxesi said, expropriating property for “public interest” had to pass a rigorous rationality test as stipulated in the Constitution but a major problem with all Bills previously tabled was that there was no recourse to the courts and on this issue the cabinet had decided to withdraw them. Jeremy Cronin seemed to come to the rescue with a far more detailed and rational presentation.  

He argued that expropriation was an essential mechanism or tool for any state in any country to acquire property under certain instances but much emphasis had been laid in South Africa on the issue of land and white commercial farmers.

He admitted that whilst “public interest includes the nation’s commitment to land reform” in the Bill before them, a fact emphasised in the preamble to the Bill, the proposed legislation was very much in the nature of a mechanism to deal with expropriation rather than say who it applied to.

Expropriation just a “tool”

croninMinister Cronin added that this was one of many reforms taking place to bring about equitable access to all South Africa’s natural resources and reforms to redress the results of past racial discriminatory laws or practices. Such a preamble existed in much of South Africa’s legislation since 1984.

He said, “The Constitution requires “just and equitable” compensation to be determined by having regard of all circumstances without placing undue weight on any single or particular factor. National, provincial and local government were empowered to expropriate property to varying degrees through several pieces of legislation, he noted.

Deputy minister Cronin tracked the history of the Bill before them stating that the 1975 Expropriation Act was totally unconstitutional as it gave draconian powers to the state and was “wisely” withdrawn. A further 2007 Bill was also removed on these grounds and the current Bill was unable to be processed for Parliament before the 2014 elections.

In line with Constitution

settlement_law_justice_However, he said, the Expropriation Bill B4-2015 seeks to ensure consistency with the Constitution and to provide uniformity of procedure of all expropriations without interfering with the powers granted to the expropriating authorities.

Opposition members claimed that the Bill enlarged upon the definition of “public interest” contained in the Constitution and the Bill could not do this constitutionally. Nor did the Bill talk to in broad terms to the issue of compensation, whether it be a commercial farm or alternative accommodation for a shack dweller.

They argued that the new Bill did not talk to the issue of the interest of a bank in terms of a mortgage and where the bank might stand on such issues. The Bill now tabled, minister Cronin said, detailed the manner in which the expropriating authority had to follow, as well as setting up the process of evaluation and the authority to do this “in a just and administrative way”.  

On mortgages and loans from a bank, he said it was the bank that will be expropriated and not the individual.

Credibility of Bill challenged

masangoDA member Masango contradicted this and said any agreement or loan was between a person and the bank and not the state and the bank and he asked how the Bill could have possibly got through the NEDLAC process.

He also raised the issue of poor people not be able to afford litigation if the process of expropriation was contested. ANC member Madlopha said “whilst the media had been rubbishing the Bill, saying that it targets white commercial farmers”, the Bill in her mind gave the state power to expropriate with only a simple notice to the property owner, a process which seemed to contradict with common law.

Blaming apartheid and more

Minister Cronin responded along the lines that in expropriation, the property clause in the Bill of Rights guided the process. Indeed, argument, he said, will no doubt occur on “just and equitable compensation matters” but this did not remove “the consideration of colonial injustice”.   

It was the Constitution, he said, that insisted that in determining “justice and equitable” compensation it should include the process of “restitution”. Deputy Minister Cronin commented that expropriation did not just affect white commercial farmers and any compensation would consider the amount of bond outstandings. 

He concluded that the new Bill was attempting to shorten the process of any litigation. He added that the NEDLAC findings on the Bill would be supplied to Parliament and suggested that the committee ask Agric-SA to appear before them to obtain their views.

Other articles in this category or as background

Zuma goes for traditional support with expropriation –

ParlyReportSA New approach to land reform – ParlyReportSA

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Eskom goes to the brink with energy

Editorial…..

What war room?….

black bulbFor those who have been associated with a war, they will know that a war room is a pretty busy place. However, one gets the impression that the South African war room, mandated to sort out Eskom and energy planning, has no red telephone and little understanding of working overtime in a time of crisis.

Spokesperson, Mac Maharaj or his  replacement, has certainly issued no statements headed with such a title, the President being busy visiting Egypt, Algeria and Angola with the deputy president calling in on the Kingdom of Lesotho.  President Mugabe has come and gone, more presidential visits are planned…… and the World Bank report on South Africa has been published.

Teetering on the edge

Meanwhile, the Eskom issue is still boiling over, the question of the fourth round of IPP tenders and more to come has been announced by the minister of energy but little evidence exists that a war room exists, let alone a high powered advisory council to advise the war room.  Parliament was, of course, on Easter recess which added to the uncanny political silence on urgent matters, particularly the energy issue, although the story at Medupi with a return to work and the appointment of a new CEO at Eskom seems  calming.

At last public servants are re-appearing from extended Easter holidays but the so-called war room gives the impression of having bunkered down. Hopefully the report in the coming weeks on Eskom, as South Africa tackles some of the other serious matters facing the country, will not only show with what went wrong but what the war room intends to do about it.

Perhaps a picture of the war room sitting and debating might actually help us believe there is one.

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Zuma goes for traditional support with expropriation

Editorial….

Session ahead may bring clarity on expropriation…….

NAIt is a difficult time for business and industry to establish exactly where they are in terms of the legislative environment in South Africa, land expropriation and state or BEE participation being mainly the issues.  However, the cabinet must be aware of the need expressed in many circles for more certainty in terms of the investment climate.

The Bills held back by the Presidency for re-consideration or signature are re-emerging slowly back into the public sphere.   Aside from the highly controversial Traditional Courts Bill adding power to the arm of President Zuma’s supporters in rural  leadership roles but offending women’s rights groups, now re-tabled in Parliament in a different form, as a section 76 Bill, is the Expropriation Bill.

Being a 76 section Bill means that the proposed changes and the formation of a state valuator’s office as thezuma traditional final arbiter on land restitution will have to be debated in all nine provincial legislatures and a mandate provided to the National Council of Provinces to gain concurrence with any vote on the Bill taken in the National Assembly. 

It is interesting to note that some time ago, President Zuma let it be known that he would also like to see this Bill considered by the House of Traditional Leaders. This is probably in the light of the debate now emerging that traditional chiefs were not consulted properly, if at all, in terms of the Restitution of Land Rights amendments.

Serving notice

Crucially, the Expropriation Bill still seeks to allow any ‘expropriating authority’ to take property by serving a notice of expropriation on the owner stipulating the value the state will pay, presumably according to the state valuation if there has been an appeal.

Commentators have noted that the new Bill differs in that the state may then serve a further notice of expropriation, which could be less, more or not necessarily revised at all, and the owner will be deemed to have accepted that transfer of land to the state unless the owner commences litigation within 60 days.

The short amount of time to respond and appoint and brief counsel and the fact that litigation, a highly costly process (costs being to the owner not the state), will no doubt be an issue debated extensively in Parliament. At this moment the main opposition party has been caucusing on the Bill. The fact that the Bill will now have to be debated in all nine provinces will leave a fluid situation for some time yet.

Struggling to produce

The Protection of Investment Bill remains an unknown quantity. Speaking to the DTI legal advisor, all he could say was “We are struggling with it”. 

Similarly, no tabling notice has been published with regard to the Private Security Industry Bill.

No energy  outcome

At the time of writing the “Five Point Energy Plan”, promised by the cabinet “war room”, has also not been presented to Parliament, the minister of energy advising all that it was necessary to have first a trip to the DRC and discuss the Grand Inga Hydro project.

Instead of her unadvised non-appearance in Parliament, a presentation by the department of energy took place, monitored in this report. What did emerge however was that future regarding the intended energy mix is also very fluid, there clearly being a division of interest in what is necessary to bring about in the short term better service delivery to the poor and in the longer term the needs of investors.

Traditional support

Time and time again, since his state address to the nation, President Zuma, where land matters are concerned, has made reference to the Council of Traditional Leaders, the majority party having no doubt realised that this base of power can either be pacified or radicalised – a very sensitive area and where the least service delivery by government occurs.

In his speech opening the National House of Traditional Leaders, he encouraged traditional leaders to take advantage of the 2013 Restitution of Land Rights Act as amended and rushed through at the end of the last Parliament and for them to put in claims.

The amendment Bill passed reopened the window for lodging restitution claims, but retains the restriction that dispossession must have taken place after 1913. The hints by the President in subsequent days in further briefings that the date of 1913 “is negotiable” have led to further claims being notified some of them apparently going back many hundreds of years. 

Once again, this will only be finalised when parliamentary debate finally takes place as the issue is bound to be raised but the whole matters adds to current uncertainty.

Hole in the pocket

Meanwhile the budget for what can be paid out in the form of restitution has been decided by minister of finance Nene and was presented in the last budget to Parliament in the current session.

President Zuma’s reference in Parliament to land held by foreigners in the state of nation address produced an unfortunate atmosphere which was somewhat mollified by off-the-record remarks by ministers to the media but no legislative clarity for Parliament to consider has emerged.

Indeed, a difficult time for business and industry, not forgetting that the Eskom issue is about to be raised again in forthcoming portfolio committee meetings in the coming week, hopefully bringing some clarity to the issue of reliable electricity supply.

Editorial only

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Debate on Nkandla to intensify

Facts on Nkandla with MPs…..

effIn an internal parliamentary question paper, M Khawula, an MP of the IFP-KZN, asked for a reply in writing from the minister of police to his question, “Which structures, buildings and/or areas have been declared national key points and, secondly, what qualifies such to be declared national key points.”

He was not to know that minister of police, Nkosinathi Nhleko, would be forced out of blustering and show that president Zuma’s country homestead in the hills of KwaZulu-Natal, Nkandla, was indeed a national key point whereas, as illustrated by a newspaper in the parliamentary recess, nuclear experimental station, Pelindaba, north of Johannesburg, was not.

The reply in writing from the minister in the parliamentary replies of 19 September, in response to Nhleko’s question, was as follows, “To publish or to make known a list of all national key points would to a large extent defeat the purpose of the National Key Points Act 102 of 1980, namely the protection of such NKP’s. It is therefore not policy to provide such a list for public knowledge.”

When is a key point not one?

The minister added to the written note, “In terms of the National Key Points Act, section 2 deals with the declaration by the Minister of Police and I quote; “Declaration of any place or area as a National Key Point.

(1)  If it appears to the Minister at any time that any place or area is so important that its loss, damage, disruption or immobilization may prejudice the Republic, or whenever he considers it necessary or expedient for the safety of the Republic or in the public interest, he may declare that place or area a national key point.

(2)The owner of any place or area so declared a national key point shall forthwith be notified by written notice of such declaration.

That was the full extent of the reply from the minister.      Meanwhile in the recess, the opposition has written to the Speaker of the House, requesting that President Zuma be forced to respect the Constitution and answer questions from MPs in the National Assembly orally on a regular basis.

Weight of the law

settlement_law_justice_In the meanwhile during the recess, Judge Roland Sutherland in the Johannesburg high court  ordered the minister to hand over the list of national key points and national key point complexes in “the next thirty days” to the parties complaining, who were the Right2Know Campaign and the South African History Archive. Such was finally acceded to.

It is now understood from a statement made at the proceedings by the Mail and Guardian, who joined the action as a friend of the court and who were represented by advocate Matseleng Lekoane, that according to the Act, security guards are allowed to search and seize peoples’ belongings if the people were in a national key point. “They were also allowed to use guns to do this”, she said.

Adv. Lekoane argued that if this was the type of reaction that people, including journalists, might face, then they had the right to be prepared for it. “You need to know the status of a place so you can inform your conduct,” she argued.

Just so we know

The advocate representing Right2Know campaigners, Steven Budlender, had earlier complained that his client was only asking for the names of the places not the addresses.

In any case, he added, it would not make a difference to the country’s security if places like OR Tambo International Airport were publicly known as national key points.  This is because, Budlender said, the “dark forces” that the minister’s counsel feared would inflict harm on the country do not need to be told that a place is important. They would already know.

He was responding to argument made by counsel for the minister of police who said that revealing which buildings and places were NKPs would place national security at risk. “This does not stand up to logical scrutiny”, said Budlender.

Judge Sutherland said minister Nhleko’s refusal to release the list was unlawful and unconstitutional, and ordered the ministry to pay the legal costs.   The matter will no doubt be tabled for discussion in the next parliamentary session by which time it will be even clearer what the realtionship  between President Zuma and Parliament will be after his State of Nation Address.

Maybe appeal

However, debate at parliamentary committee working level will now be at a different level in the new session . The facts are there and what was fog in a bucket is now in the open for proper debate.

Other articles in this category or as background
http://parlyreportsa.co.za/cabinetpresidential/nkandla-debate-rekindled-da/
http://parlyreportsa.co.za/cabinetpresidential/nkandla-ndp-argument-rages-go/

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South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

dipou Peters2In a written reply to Parliament on the whereabouts of the promised Green Paper on rail policy, transport minister Dipuo Peters told her questioners that such a document which has the intention of outlining South Africa’s rail policy was to be presented to cabinet in November. GCIS statements for cabinet meetings for November and the final cabinet statement in December 2014 made no reference to any such submission having been made – alternatively, the minister might have failed to have it put on the agenda. The country therefore went into Christmas recess once again without an established government policy on both freight and passenger rail transport matters, worrying both industrialists, investors and, not the least, built environment planners.

Just talking together

A draft Green Paper was first submitted to cabinet a year ago but cabinet instructed that more consultation on the proposals was necessary, particularly interchange between the transport and public enterprises departments. The portfolio committee on transport stated that policy on freight rail upgrading and infrastructure development was unclear, plans for commuter and long-distance passenger services confused and no clear picture had emerged on Transnet’s promised policy of structural re-organisation. Subsequent to this, the department set up a national rail policy steering committee to oversee the consultation process and introduce the required changes to policy. It has also divested itself of a number of non-core assets but no clear picture has emerged in statements on the promised policy of giving direction on the privatisation of branch lines.

Since time began…

According to the minister at the time, cabinet’s concerns had also involved the adoption of a standard gauge, private sector participation and economic regulation.  Subsequently, DoT indicated that standard gauge has been selected as the most suitable gauge for the South African rail network and as a result a final revised Green Paper was tabled before the steering committee in October 2014. Nothing has emerged. In the absence of any agreed policy, particularly to meet the proposed idea of rail freight re-assuming its dominant role over road transport in the light of the deteriorating national road picture, a number of developments have indeed taken place with regard to the purchase of diesel and electric train stock, signal systems upgrades and station re-building and passenger coach rolling stock manufacture. Nevertheless, no clear picture has emerged on the road ahead with regard to the freight/road picture, branch line privatisation, commencement dates for full long distance passenger services nor satisfactory plans and targets expressed on domestic commuter rail services.

All said before

Jeremy Cronin, when deputy transport minister, told Parliament in April 2011 that by establishing a local manufacturing base for the new rolling stock, benefits would ensue by creating a substantial number of local jobs. He added that as a result of the redevelopment of rail engineering capacity, skills that have been lost over decades of underinvestment in the local rail engineering industry would be recovered. The then deputy minister also said, “We are currently (2011) in the Green Paper phase with the primary objective of preparing the way for effective stake holder engagement. We are poised to reverse the decline in our critical rail sector that began in the mid-1970s and gathered pace in the late 1980’s.” In April 2015 therefore the country will be the fourth year of waiting for South Africa to outline its rail policy, “a system critically in decline” according to minister Cronin.

Recent update from Maties

A few months ago, a most important paper on rail transport, now in the in the hands of DoT, was published and out into the public domain by Dr Jan Havenga, director: centre for supply chain management, department of logistics, Stellenbosch University, who led a team of transport logistics experts to complete this erudite and informed report. The report is entitled “South Africa’s freight rail reform: a demand-driven perspective” and opens with a definition of government’s responsibilities in rail transport matters. “The role of the government is, primarily, to facilitate the development of a long-term logistics strategy that optimally equilibrates demand and supply through ‘anticipation’ of the market character.” “The definition of a national network of road and rail infrastructure and their intermodal connections will flow from this, presupposing neutrality across modes by taking full account of all relevant social, environmental, economic and land-use factors.” “This ensures that the mix of transport modes reflects their intrinsic efficiency, rather than government policies and regulations that favour one mode over another. The strategy is subsequently enabled by a clearly defined freight policy, a single funding regime for the national network and, lastly, the establishment of appropriate regulatory framework.”

Volume of freight critical

The report notes that “the American Trucking Association (2013) forecasts that intermodal rail will continue to be the fastest-growing freight mode in the next decade. Only the very busiest railway networks, which can exploit the density potential of volume growth, are likely to generate sufficiently high financial returns to attract substantial risk capital in long-term railway infrastructure.” “The Association of American Railroads as well in 2013 also highlights the impact of density on efficiency, revenue and, ultimately, the ability to reinvest.”

Lacking in market intelligence

Dr Havenga says, “The failure of South Africa’s freight railway to capture this market is attributable to a lack of policy direction regarding the role of the two modes (road and rail) in the surface freight transport industry and according to the Development Bank of Southern Africa, caused by the absence of sufficient market intelligence to inform policy.” He goes on to confirm that “one of the key requirements for an efficient national freight transport system is better national coordination based on market-driven approaches.”

Pressing need

“To avoid the ad hoc policy responses of the previous century, which led to sub-optimisation, increasing complexity and decreasing end-user quality, the pressing reform issue for South Africa, therefore, is agreement on the design of an optimal freight logistics network based on a market-driven long-term strategy that holistically addresses the country’s surface freight transport requirements.” Dr. Havenga’s final comment in the report, only a few weeks old, states that South Africa’s freight task is expected to treble over the next 30 years, with further concentration on the long-distance corridors. He points out that the country desperately needs a profit-driven market related core rail network to serve industry and manufacturing, as well as a developmental-driven branch line network to serve rural development. Other articles in this category or as background http://parlyreportsa.co.za/transport/minister-comments-taxis-e-tolls-road-rail/ http://parlyreportsa.co.za/finance-economic/prasa-gets-its-rail-commuter-plan-started/ http://parlyreportsa.co.za/uncategorized/transnet-says-freight-rail-operations-coming-right/ http://parlyreportsa.co.za/uncategorized/rail-is-departments-main-focus-in-year-ahead/

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Zuma vs Parliament

This weeks editorial comment……

ANC internal problems dominate…

zuma-Sonanational assemblyWhilst the task of  a parliamentary monitoring function such as ParlyReportSA is to observe impartially the workings of Parliamentary portfolio committees as they affect the business and the industrial scenario, it would be absurd to go to a concert and ignore the music.

The problem with Parliament at the moment is an unpleasant background sound which affects to a great extent not only the focus of any business to hand but which also points to a disconnect between the conductor and the orchestra within the governing party.

Most things that happen in the precincts of Parliament will affect the commercial world to some degree or in one way or another but currently, if our observations are correct, there is an overriding obsession within the Presidency to convey to voters an image that “all is well”.  In Parliament it is all too evident that things at times are not that well.

Watching their backs

The top priority with the presidency appears not to be with the commercial and industrial body corporate and dealing with the country’s economic issues but to battle on with the image problem the ANC Alliance’s relationship has with its own historical audience.  It was minister Jeff Radebe who had to make the statement on country’s most important issue, the energy crisis.

Raymond Suttner, a former ANC underground operative, political prisoner and leader, who rarely misses an opportunity for sanguine comment, said recently, “The ANC has become an organisation in which only one man can be acknowledged as a leader.”

He continued, “Before local government elections, the ANC is burdened with a president who is literally running away from Parliament, the country’s main democratic institution. In subordinating democracy to the needs of “uBaba”, fundamental democratic principles are being jettisoned.”

Pulling the donkey’s tail

The legislative and government departmental policy issues that involve our watchful eye rarely involve the EFF circus but it is interesting to note that at parliamentary working portfolio and select committee level, the few EFF members and not so many but nevertheless much emboldened DA MPs, are tending to ask better and more direct questions.

However, a lot of this is designed to get under the “ANC’s skin”, as distinct from informed, serious and challenging commercial questioning.   Much will play out in the coming months, particularly once the municipal elections are over and the posturing in that direction ceases.  All the same, President Jacob Zuma’s relationship with Parliament is not currently a happy one. Inordinate delays are common.

Slow moving policy decisions

In regard to the analogy of the irritating background sound caused by this disconnect, for the moment then the music will just play on.   Fortunately, it does not affect to any great extent the work of the more dedicated chairpersons of committees but it still seems that in order to get policy decisions out of cabinet, nobody seems to move without the assent of President Zuma and no convoy is faster than its slowest ship.

This irritating factor will also not affect parliamentary oversight to any great extent as better systems are now in place for checking departmental financial performances and the reporting of departments and utilities to reach their service targets.

Unless of course, as happened with Eskom, material facts are withheld.  In this regard, the maintenance of freedom of speech and an unencumbered media remain vital.

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Energy gets war room status

Cabinet creates energy crisis committee…..

Editorial…….

eskom logoIn retrospect, for the cabinet having had to resort to establishing an energy war room is probably a good thing inasmuch that a meeting of minds appears to have taken place at all levels of the ANC Alliance on energy matters. The situation is indeed serious.

The message from business and industry that the “energy crunch” is not only immensely threatening to the economy appears to have got through, accompanied probably by the realisation that so many regular failures, power or otherwise, are threatening to the ability of the ANC to stay in power.

Foggy outlook

Perceived at first as an issue mainly affecting the rural poor, the failure of Eskom to deliver on most of its promises; the bumbling of the department of energy on independent power producer parameters and the to-ing and fro-ing of cabinet on the adoption of nuclear energy into the energy mix, has been somewhat of a pantomime.

For months we have been reporting from Parliament on the ambivalence of Eskom and the reluctance of the department of energy and public enterprises to chart a course on energy.

The whole truth…

NA with carsHowever, what is a matter of concern is the fact that in all those lengthy power point presentations and detailed reports to parliamentary committees that we have witnessed or read, the ball has been completely dropped on the energy issue and badly so.   At the very least Parliament were not given the full facts, particularly in the case of Eskom, thus threatening the parliamentary oversight process.

Deputy President Ramaphosa has now been designated to oversee the turnaround of SAA, SAPO and Eskom. The cabinet statement says regarding this, “Working with the relevant ministries, SAA will be transferred from the department of public enterprises to national treasury. The presidency will closely monitor the implementation of the turnaround plans of these three critical SOCs that are drivers of the economy.”

Maybe next year

It is comforting therefore to some extent to know that such a “war office” has been established and that cabinet has adopted a five-point plan to address the electricity challenges facing the country but it just seems incorrect that a relatively empty, tired statement such as “more cross cutting meetings to meet the challenges facing  the country will be adopted” was all that could be added in the form of action before ministers disappeared for the Christmas recess, including, we understand, the contractor’s staff at Medupi.

elec gridIt seems that nobody is in charge over the same period nor interested enough to be there and nobody is really looking much beyond January 15, when South Africa starts switching on again.

 

Perhaps in 2015, some reality will return to South African politics and amongst the governing party. They may learn that there is a direct relationship between being in power and keeping the power on and we foresee many more direct confrontations on this issue and others in Parliament during the coming year.

 

 

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