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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 thrashes out debt relief Bill

Credit Regulator calls for defined debt relief… 

MacDonald Netshitenzhe, of Department of Trade and Industry (DTI), has told parliamentarians that his department in general endorses the call  by the National Credit Regulator (NCR) for the Minister of Trade and Industry to provide for debt relief provisions under the National Credit Act (NCA). The call will be answered by a Bill generated by Parliament because of its cross-cutting nature.

DTI’s input came after the portfolio committee last year held two meetings on the debt situation in South Africa, following a decision taken earlier in the year to gain input from the public and appropriate state entities on the possibility of debt forgiveness.

Parliamentary initiative

The parliamentary subcommittee, formed by Joan Fubbs (ANC), chair of the Trade and Industry Committee, was established last year to investigate possible debt relief systems for over-indebted households. The objective was to provide with consultation for as many parties as possible and to obtain a legal background to enable debt relief regulations to be drafted as an extension of the NCA.

It was tacitly accepted at the time that the result of the investigation would turn out to be a parliamentary committee Bill drafted on the subject to amend the anchor Bill after an initial policy review was carried out on indebtedness nationally. Documents before MPs showed that the World Bank had noted that South Africans currently owed R1.63-trillion to lenders and SA consumers were the most indebted in the world.

Basics

To draft the Bill, it was agreed that technical support would be given by DTI and that a Socio-Economic Impact Assessment (SEIAS) was to be undertaken when the Bill was agreed as a completed draft.

Meetings on debt relief have been held by the parliamentary subcommittee with South African Reserve Bank, the Financial Services Board, the National Credit Regulator (NCR) and the National Consumer Commission. Already implemented are revised cuts in interest and fees and the well publicised garnishee order changes for public servants.

National Treasury is also working on a draft Insolvency Bill with Department of Justice (DoJ) and input from DoJ has included the Debt Collectors Amendment Bill and the Courts of Law Amendment Bill both now before the PC on Trade and Industry, in separate meetings.

Debt relief per se

In recent meetings, Netshitenzhe who is Chief Director of Policy and Legislation at the DTI, when asked to contribute to the sub-committee’s work, outlined first whom he thought debt relief should apply to.    He replied that DTI recommended that such relief could be for retrenched consumers, victims of unlawful emolument attachment orders (EAOs), victims of unlawful social grant deductions and victims of reckless credit lending.

 

In answer to questions, it was explained that an EAO, more commonly known as a garnishee order, was a deduction by an employer from a wage as distinct from the more sophisticated administration order where an appointed administrator paid one or more creditors from an allocated sum for which a fee was charged.

Flexibility

In expanding on debt levels generally and in talking on counter measures, Netshitenzhe said the position on levels of debt that were currently being experienced would not always be the same and therefore, in allowing the Minister to provide debt relief measures in some form, DTI recommended that it be understood right from the start that the provisions could altered from time to time and the position should remain fluid.

It was DTI’s view that the Minister of Trade & Industry should consult carefully with the appropriate members of the credit industry before drafting the first such amendments in the form of the Bill and making any subsequent changes later. Naturally, he said, National Treasury had to be drawn into the debate immediately.

Domestic debt targeted

As well as providing remedies for household debt relief, strong counter measures also should be adopted, he said, in cases where indebtedness resulted from the behaviour of unscrupulous credit providers. This had become a major problem in SA.

Parliamentarians were told that over-indebtedness had worsened with the slowdown in economic growth and ever-increasing joblessness. Some 40% of the 24m credit card consumers had currently an “impaired record”, which was defined currently as three or more months in arrears or were listed with a credit bureau or who had been subject to a court judgement or administration order.

Causes

Consumer over-indebtedness resulting from prejudicial behaviour by unscrupulous credit providers, he said, was a further major problem, followed by borrowers borrowing more to redeem debt with no checks being carried out by lenders.

In outlining DTI plans, Netshitenzhe said that proposals may have to be provided to alleviate or support those in debt for reasons to be defined and the State therefore would no doubt need to establish a fund reserved for debt relief interventions to either partially or fully pay off the debt of qualifying consumers dependant on their circumstances.

Credit checks

Who qualified for relief of any kind and how to define the circumstances was the next big issue coming under debate. He added that it was DTI’s view that the possibility had to arise whereby credit providers should provide debt relief to over-indebted consumers who have already paid “a significant portion” of their debt. This whole concept had to be fleshed out, he inferred.

At that stage, Opposition members welcomed the propositions in general but were deeply concerned, as were many parties, that the very offer of forgiveness of debt might provide encouragement of reckless borrowing or spending. They wanted to see strong counter measures in the form of affordability assessments when credit was granted.

National Treasury

In a follow-up meeting led again by Chair Joan Fubbs with National Treasury (NT), MPs were told by Katherine Gibson, Senior Adviser for Market Conduct at Treasury (who also handles Twin Peaks regulatory measures) that in economic terms, further research was needed to determine the impact of possible debt relief packages which as an outcome, she said, could heavily impact on retailers and microlenders.

Treasury, she said, had previously introduced a debt amnesty to assist poor and indebted consumers and they also were considering many options including ‘extinguishing’ some or all of debt to help people get a fresh start. “However, the underlying principle that if a person can pay, he or she should pay is adopted at Treasury in all considerations”, she said.

Early days

Ms Gibson told MPs that such research was essential since the impact of any kind of debt relief packages was likely to affect retailers and microlenders which could have a knock-on effect of further inability for consumers to access credit. This would, in turn, cause further “worst case scenarios” pushing the more desperate creditor into the hands of illegal

operators. In all considerations, protecting the poor and focusing on the poor was paramount, she said.

In her briefing, she noted that whilst the new requirement that registration of credit providers applied to only those granting credit of over R500,000 or at least 100 agreements, reckless lending was playing a large role in the deterioration of household debt.

Overload

Ms Gibson said it also concerned Treasury that a great number of credit providers had provided credit to already totally over-indebted consumers and had failed to conduct affordability assessments. To this end government, through the Treasury, had appointed a service provider (consultant?) to investigate all EAOs issued to public sector employees.

The service provider had tested the EAOs against various parameters and the credit provider involved was asked to withdraw the arrangements if certain criteria could not be met.

Overhaul

The next phase, said Ms Gibson, was to check on the types and details on EOUs that were currently being applied. It had been noted in discussion with paymasters in government service that employees with the largest level of exposure had instalment values ranging between R1 200 and R6 500.

The state departments with the largest number of EOUs were the SA Police Service (SAPS), followed by the Department of Education, the Department of Health and then the Department of Correctional Services. SAPS also had the largest exposure of different types of credit providers, she said.

Ms Gibson commented, in answer to questions from MPs, that mostly credit providers had corrected their processes and credit arrangements voluntarily after an enquiry by the team investigating. Those not doing so were now subject to litigation in court. This was happening across the various state departments but in answer to a question, Ms Gibson said she was not referring to SOEs.

In need

She also identified many areas where Treasury agreed in principle with DTI as to who were the groups were most likely to receive relief in the final analysis.

These categories were those who had no money or assets; those who had low income and low assets but according to circumstances needed relief; those who had been defrauded and those who clearly had no basic understanding or capability to understand what they were signing because of lack of explanation, lack of understanding of a financial arrangement or lack of a needs assessment.

Any international precedents on the issue of whom should be assisted that had taken placed in developing countries should sought, said Ms Gibson. She said she understood this was in process at DTI.

Debt clearance

Treasury had stated that a procedure must be established, she said, whether the debt was to be written off completely; whether it should be restructured; whether write-off should apply to people who were poor and whether the credit should never have been given in the first place and therefore how it was granted followed up on.

Other cases could involve people who were only insolvent for the moment and therefore needed only a debt restructuring plan to tide over. MPs flagged that they saw problems ahead with instituting such processes in practice but would await a further briefing from DTI and take matters up with them.

OK so far

Ms Gibson concluded that Treasury had already found it had common ground with DTI about debt relief. She acknowledged that the tailoring of measures to meet the circumstances was going to be difficult but most important was to install simplistic check systems.

However, she said, it was also important to control better with strict applications any credit availability and to “change the behaviour of reckless borrowers.” She understood that education processes were to be organised by DTI for borrowers on the subject of borrowing without conscience or thought of the implications of debt.

Big stuff

Chair Joan Fubbs explained to members that the whole issue of mortgages, secured loans, various banking arrangements and pawning were not discussed at this stage, this being left to further final debate and parliamentary presentations after the parliamentary recess in August.

Many inputs have, however, have already been made by the banking industry, business entities and employee representatives during initial discussions but with no draft Bill as a consideration.

Finance Regulatory Bill

Ms Gibson added that much would change upon the implementation of the “Twin Peaks” banking and finance institutional programme where Treasury’s influence upon the banking industry and debt collectors in general would come into play.

Legislation is being concluded by DG Roy Havemann of Treasury, she said, and “Twin Peaks” would change the aspect that the Treasury did not have the power to monitor debt collectors and banks but would have so shortly.

She said the banks had been highly co-operative but had expressed deep concern over long term debt effects and its effects on banking costs, as distinct from immediate short-term relief most of which was in place already as far as consultation with their own clients was concerned

However, she said, the proposed impact assessment on debt relief to attempt to measure outcomes on the proposals for both the private sector and public service sectors was now essential.

Final mix

In conclusion, she said that there was a need for correlated action by all role players since there were many different players, consumer groupings and regulators involved and the views must be heard again of the various entities granting and dealing with credit when the Bill is in final stages of the Bill.

Consumer bodies dealing with debt relief should also be asked to comment, she said. Ms Gibson concluded by saying that there had to be a better understanding how debt was incurred by different South African groupings, why it was so easily incurred and to identify the most appropriate remedies and options that were available to various groups and cultures.

PMQ & A

Questioning from MPs was direct bearing in mind that the proposed Bill was to be a parliamentary submission for tabling. One MP noted that most debtors were litigating against creditor providers whereas it was the collector, such as a state department, that had wittingly or unwittingly entered an illegal garnishee and not necessarily the credit provider.

It was also suggested as not ideal that in some retail-to-consumer arrangements, the credit provider sold the debt to the debt collector in the first place. Then it was the debt collector who arranged the garnishee order and worked on a collection fee.

Ms Gibson responded that this kind of situation had to be accepted and, furthermore, it was not of consequence, providing the credit provider who granted the credit was registered and obeyed the rules and the arrangements fell inside of what was to be allowed in the Bill.

Dave Macpherson (DA) asked about the progress regarding the fraudulent EAOs and asked for a list of the deregistered credit providers who were still operating despite the restraint. Ms Gibson said she would supply such a list to the committee which would be confidential but such a list existed.

Debt collectors

Ms Nomsa Motshegare, Chief Executive Officer: National Credit Regulator (NRC), also said that the “policing” of credit providers could not be controlled with existing legislation but that on the sale of debt, debt collectors were required to register with the NCR to allow monitoring. NCR had a mandate to ensure that the purpose of pensions should not be to pay off debt but to cater for retirees’ welfare

Charmaine van der Merwe, Parliamentary Legal Adviser, entered the discussion to say that not everything that debt collectors did was illegal, by any means, but it was incumbent upon any regulated debt collection profession to reported shady arrangements in credit provision, especially if it involved a legal application.    Sadly, she said, reckless lending could not be reported because it was a matter of opinion and in most cases the facts were unavailable to governance authority.

Learning money

Chairperson, Joan Fubbs asked for the number of teachers involved in debt education in government service since there were many consumers who resigned from the workplace in order to cash in their pensions and pay off debts resulting in skills being lost to the country. Ms Gibson advised that this was a problem that existed throughout South Africa and in any country.

On the issue of rigged auctions, which subject had arisen in earlier meetings, Fubbs said, that although banks were proven to be complicit in some cases, consumer conduct needed also to be addressed in this area since consumer fraud and unmanageable debt had arisen. The committee said this would have to be once again investigated.

Around in circles

MPs warned that in providing for stricter conditions on loans, it might become more difficult for the poor to secure credit. Chairperson Joan Fubbs said that all were aware of this problem but she charged that the most serious issue facing her Committee were poor people losing their homes because they had become jobless, a poor economic climate and unavoidable debt with school fees added to food costs. Frivolous debt was not the issue under discussion, she said.

Department of Justice will now see through the associated Bills and the question of debt relief moves to a final wording with approval of Treasury and ending with hearings. Being a parliamentary Bill, the NEDLAC process will be short-circuited.
Previous articles on category subject
Treasury proposals on debt control approved – ParlyReportSA
Credit regulations to squeeze racketeers – ParlyReportSA

Posted in Finance, economic, Labour, Trade & Industry0 Comments

Parliament may see delays on Mining Bill

Mining and petroleum bill to hit snags

Overwhelmingly evident is the cloud hanging over the Mineral and Petroleum Resources Development Amendment Bill (MPRDA), linked inextricably to a troubled Mining Charter, some movement on the MPRDA being necessary to restore stability to the mining industry in the form of legislative clarity.

Legislative clarity will also allow the petroleum and gas industry to hopefully go into a development phase.  Here the players need an equal playing field, the State in this case getting a free stake possibly at 20% but paying no development costs since the State now has ownership of the resources.

Free lunches

There is one further possible hurdle on the horizon.      Aside from issues surrounding the Charter, which is technically a non-parliamentary issue, the application of Parliamentary Rules regarding the great number of changes that are being made to the Bill raise procedural issues.

It is indeed a very different Bill to that which was voted through Parliament earlier and passed by the National Assembly.

For the moment, now that provincial opinion on the more recent changes to the MPRDA have been returned,  the provinces each having voted and recorded their nine mandates on the subject, the idea is that the Bill can then finally be returned to the Presidency, possibly via the NA Committee to lodge the changes.

First things first

There is a sense emerging that the offshore gas industry is a little happier with the free carry proposals but on the other side of negotiations it appears, from the media, that the Chamber of Mines is struggling to find common ground with Minister Zwane on the Mining Charter, referred to in the MPRDA but not legislatively part of it.

It is difficult to imagine any Mining and Petroleum Resources Development Act, as amended, being in force without an agreed and new Mining Charter in place. However,  developments in this area will have to be watched.

Last in queue

In the list of Bills before Parliament the MPRDA has been listed last (and therefore the longest under debate) for nearly three years, except for a short period when it went to the President.   This reflects the long tussle involved.

The four major hindrances were the extended negotiations with the offshore petroleum industry on the free carry issue; the fact that President Zuma returned the Bill approved unsigned insisting that it be considered by all nine provinces; issues surrounding what the Minister has defined as “strategic minerals”; the thorny question of mineral beneficiation and the completion of the mining charter, to which the MPRDA refers but remains not incorporated.

Next process

Many more issues have still to be debated, whilst the basic parameters will have to come to a head on the parliamentary “rules of the game” regarding the passage of the legislation itself.    Meanwhile, NCOP hearings on the Bill have been scheduled for the last two weeks of June 2017.

Throughout, the “elephant in the room” for the mining industry has remained the Charter itself which Minister Zwane has stated will be “the most revolutionary Charter ever produced.”

Possible slow down

Meanwhile on the MPRDA, Opposition members will no doubt study closely the Rules of Parliament which state, as was the case with the FICA Bill, that if a Bill is returned unsigned then only the issues for which the Bill was returned may be altered and then only once.

However, unlike the FICA Bill which was returned on the basis of one issue, that of unwarranted searches the MPRDA Bill was returned on the basis of lack of consultation with the provinces.

To amplify, if the President only returned the Bill on the basis that the NCOP and National House of Traditional Leaders had not been consulted, it may be a contested issue as to whether the Bill will be challenged under these Rules. This is a legal issue.

The Legal Resources Centre is quoted as being interested in such a challenge.

Looking ahead

For years, it has been the view of many that both industries that each should have its own “MPRDA”, especially in the light of the fact that both have their own specific and very different Charters.

Whilst crude oil, subsequently refined to petroleum and gas, are certainly natural resources now owned by the State, theoretically the only resources that are ‘mineral’ are those which have a crystalline molecular structure and are “mined”.     This would naturally exclude extracted crude oil and gas.

Two is not one

Consequently, both industries, which fall under two government departments and which are distinctively different from one another, have historically been under one piece of legislation governing all geological resources.

This difference between the two industries is expressed in many ways.   The petroleum industry is centred around its refineries, very much technical industries with ‘upstream’ components in importation and exploration and ‘downstream’ interests  involving distribution, retailing and property interests. Their product is very directly linked to the cost of doing business and the cost of living.

Meanwhile, the mining industry is essentially involved in extraction with massive labour factors, high capital costs, sophisticated export involvements and beneficiation.  Its product is closely linked to the survival of industry in general and is directly linked to GDP.

Legislatively, therefore, one garment certainly does not fit all  –  despite each industry having its own charter.  Inevitably separate legislation will have to be developed but such changes are seen as being down down the road for the moment.

Damaging delays 

Whatever route the Bill now takes in Parliament, any challenge to its progress will be particularly frustrating for investors if there are more delays.    Those issues mainly arise in the mining sector where far more is at stake and consequently rating agencies are flagging Minister Zwane’s actions.  The gas exploration industry is clearly tired of waiting.

The results of three days of parliamentary hearings on the Bill, which have included some side issues such as Shell SA on the future of shale gas and any demands from the House of Traditional Leaders, should prove interesting.

The major issue remains as to what is government policy is on the whole particularly regarding labour  as distinct from just Cabinet ambitions for BEE participation percentages.

Next stages

Most attention will now fall upon the complementary non-legislative document, the Mining Charter, despite the unclear parliamentary situation.   Following the public hearings, the NCOP Select Committee will summate these meetings and the relevant departments will respond over the following days.

Possibly, at some stage, Minister Zwane will address Parliament on the issue to clarify the situation of government’s view and relevant comment on the Bill will also no doubt arise from media briefings by the Ministry on both subjects. For the moment, much of the issue will be dictated by events outside of Parliament.

Previous articles on category subject
MPRDA Bill returned to National House of Leaders – ParlyReportSA
MPRDA Bill to be amended urgently – ParlyReportSA
MPRDA Bill brings changes in BEE and exploration rights – ParlyReportSA
Mineral and Petroleum Resources Bill halted perhaps – ParlyReportSA

Posted in BEE, Finance, economic, Fuel,oil,renewables, Labour, LinkedIn, Mining, beneficiation, Special Recent Posts, Trade & Industry0 Comments

Treasury goes with health pundits on sugar tax

Sugar tax threatens jobs say suppliers

With the publication by Treasury of the policy paper on a sugar tax on sugar-sweetened beverages of 2.9 cents percanning gram of sugar, Treasury is set to raise some R3bn from fizzy or carbonated drinks and the possibly of a total R4.5bn from the food and beverage industry as a whole. Others in political circles estimate that revenue could exceed R11bn.

Minister of Finance, Pravin Gordhan, promised that such a tax would be forthcoming in last year’s budget speech. As this figure quoted by the Minister is minuscule in terms of the total country’s overall budget needs and the administration may outweigh the costs of actually collecting it the Minister has pointed out in mitigation that there are easier ways to garner tax revenue.

With that disclaimer, the release from Treasury also says the tax “flows from work undertaken by the health department on non-communicable diseases and obesity.”   They said, “The problem of obesity has grown over the past 30 years in South Africa resulting in the country being ranked the worst in sub-Saharan Africa”.

In the background

sars logoWhat Minister Gordhan says is usually the truth but most of the influence is more likely to be coming from the Ministry of Health.     At the most, Minister Gordhan says that the idea in Treasury is to “nudge consumers into better choices to fight obesity.”  Whether this move will in fact contribute to a cut in obesity deaths remains in the strange area of whether an increase in the price of whisky reduces the number of whisky drinkers.

Treasury is following the theory that by making the cost of cool drinks higher and thus less affordable, it will make sugar-sweetened beverages (SSBs) less appealing to consumers, a theory also which appeals to the Minister of Health whoaaron motsolaedi has been most vocal on the subject.    Such an idea also conforms to sugar-related food and beverages studies conducted by Wits University, they both say.

Not medically holistic?

Most objectors to the idea of a “sin” tax on SSBs say that if one wishes to really succeed in a fight against high obesity rates in SA, then only a whole package of measures will achieve the desired result.    In the UK apparently, where the argument also raged, it was stated that a sugar tax was an impractical answer without a tax on crisps and snacks, a whole range of harmful foodstuffs and, especially with children, other “goodies” sold to them from tuck shops and cafés.

In SA, many have said that to isolate SSBs, when they are sometimes more available than potable water in a number of rural areas, is counter-productive. There will be more “unintended consequences”, they say.

Who suffers most

From a political viewpoint, the Democratic Alliance (DA) and the Beverage Association of SA both echo the same sentiment that all the tax will do is “hurt the poor and will most likely fail in its objective to reduce obesity”. The debate will obviously become quite intense in this area alone.

The DA has already gone on record as saying “It is difficult to compel consumers to eat healthier foods by making unhealthy foods expensive. There are always cheaper, fizzier and sweeter alternatives on offer.” This does of course make that point that SSBs, in their view, are unhealthy.    The DA added it would reject Finance Minister Pravin Gordhan’s proposed sugar tax if its purpose was “simply to raise more revenue under the fig leaf of a public health benefit”.

The proposed date for the enforcement of such a sugar tax is April 1, 2017, and bottlers such as Coca Cola state thatcoke bottle sugar is in most food and drink and they ask how far this form of tax will go.  Already government has announced regulations restricting the amount of salt in most foods, including bread and processed foods, in an effort to reduce the cost to the State in respect of heart attacks.

Health objectives

Dr Aaron Motsoaledi has set out the intentions of the Department of Health (DOH) to reduce obesity by ten percent in South Africa by 2020.

The DA have argued that by that date any sugar tax would have contributed as a major item in driving drive up food prices, whereas the answer they say lies in a “holistic healthy lifestyle campaign”. They have also said that they  would object to Finance Minister Pravin Gordhan’s proposed sugar tax if its purpose was “simply to raise more sweet counterrevenue under the fig leaf of a public health benefit” but its difficult to see how they could stop the tax as most Bills on tax are incorporated in ‘money’ Bills.

The DOH paper on obesity points to a US report that “sugary” drinks may lead to an estimated 184,000 adult deaths each year globally and that South Africa was ranked second in the world. That seems a rather unsupported figure but is an example of the rather extraordinary claims being thrown around.

World view

Most bottlers seem to have unsweetened versions on the market it is noted, so technically the matter remains a consumer choice but marketing people say people don’t like switching.   Confirmed by Treasury is the fact that other countries such as Denmark, Finland, France, Hungary, Ireland, Mexico and Norway have all levied taxes on SSBs.

The DA point out that Mexico is the only case comparable with South Africa with such a large sector of poor and there the tax has failed to reduce obesity. Treasury disagrees and says “a tax on foods high in sugar is potentially a very cost effective strategy to address diet related diseases”.

Written comment on the proposals is invited until 22 August 2016.
Previous articles on category subject
Sugar tax possibilities – ParlyReportSA
SA health welfare starts in small way – ParlyReportSA

Posted in Health, Home Page Slider, Labour, LinkedIn, Trade & Industry0 Comments

Immigrant visa problems dominate debate

sam mototabaNorthern agriculture seen as visa defaulter…….

sent to clients 15 June…..Sam Morotoba, DDG of Public Employment Services, Department of Labour (DOL), told parliamentarians that it was DOL’s view that visa immigration policies for South Africa must involve cutting down on the flow of unskilled immigrants into the country.

From the nature of the debate, it was evident that DOL was more concerned on the creation of jobs for South Africans and not the issue of visa granting to specialist cases, a fact which gained the support of most  MPs.

Sam Morotaba said that amongst the massive inflow of undocumented persons crossing what is some 4,000kms of border there were those that did find work, had no entry visa and were totally exploited in the process. Most of the border was totally “porous”, he said.

More facts emerged during the particular Labour Portfolio Committee meeting when both DOL and the Department of Home Affairs (DOHA) jointly made presentations on immigration policy.   The practical aspects of the issue of work permits to foreigners, normally called “temporary visas” were discussed.

Not asylum seekers

Over 70% of the non-documented labour problem occurred in Limpopo Province, according to DOL figures.    It was also shown that there were approximately 300,000 illegal immigrants in the country at present, whether they were working or not.   Refugees from war and refugees seeking asylum were a completely different issue, Morotaba said, and they represented a much smaller number, .

sa border beit bridgeSpecially conducted “raids” on farms and businesses in the Northern areas and which were carried out by the few inspectorate staff that were available to DOL were frustrated by the advent of the cell-phone.    Messages were simply sent ahead by immigrant employees advising that a “raid” was in progress and workers who had no documentation but wanted the work simply went into hiding.

Some employers told their employees not to come to work when appointments with DOL inspectors were made. “Raids”, in conjunction with South African Police Services,were extremely difficult to undertake unless the matter was serious enough to consider that a possible breach of the law had taken place.

Traffickers

The problem was exacerbated, said Morotaba, by traffickers that postured as labour “sellers” and went from farm to farm offering cheap labour in the form of immigrants without documentation looking for work.    Inspectors had resorted to “raids” on Friday “paydays” and also at night.  Employers were generally unhelpful; gaining access to farms was difficult; and the success rate in finding illegal immigrants was therefore low, said DOL.

Farmers remained the major culprits, it became apparent – an issue which has been the main theme of chairperson Lumka Yengeni of the Portfolio Committee on Labour for a number of years.

DOL said that there were more than five million legal immigrants in the country and the laws of South Africa demanded that all workers be protected, whether illegal or not, in terms of the Constitution. This had to be borne in mind, they said.

Desperate people

However, underpaying desperate people who had no temporary visa and housing them in filthy conditions, was farm labourersquite a different matter and was a contravention of all international principles. This was the issue facing DOL.

Also, some companies and employers simply did not want to test the local market for labour suitability or could not be bothered to try, DOL said, and also probably also wanted to avoid UIF participation, collection and payment and few farmers got involved in the cost of skills training.

Home Affairs briefing

The main agenda of the portfolio committee meeting in question was the subject of the nature of relationships between DOHA and DOL. Also their observations were requested on the current position with regard to delays in issuing visas and DOHA was asked to give a technical explanation of where the visa issuance process was headed.

DOHA was represented Acting Chief Director for Visas, Home Affairs, Modiri Matthews, supported by Ronnie Marhule. Modiri Matthews said his department was mandated by the Immigration Act to deport those unlawfully in the country.

visa stampHe made it clear that the Immigration Act stated that a temporary residence visa could be granted only for the categories of Study, Treaty, Business, Crew, Medical Treatment, Relatives, Work, Retired Persons, Exchange and Asylum.

It was only when a permanent resident permit was issued that the holder was entitled to live in South Africa on a permanent basis, with all the rights and obligations of a citizen except the right to vote and use an SA passport. This was standard in most countries, he said.

Visa classification

There were three kinds of visas – Corporate, General Work Visa and a Business Visa.   Most farming entities and general business fell under the category of corporate visas, where a requested number of foreigners was needed by an employer.

Proof had to be supplied that despite a diligent search, the applicant could not find suitable SA citizens or permanent residents to occupy the positions; the job description had to be given; and it had to be conditional that salary and benefits paid would not be less than standard agreed emoluments.

Home Affairs confirmed that feedback indicated that the current system is too cumbersome due to DHA’s lack of capacity to handle the volume of applications; the fact that “standard operating procedures” within the department were ambiguous; that many officials were insufficiently trained and turnaround around times were too slow.

Speeding things up

Modiri Matthews promised parliamentarians that new electronic systems were in place to ensure a more secure system of interaction between DHA, DOL and Department of Trade and Industry (DTI) – the latter being responsible for issuing the quota or number of visas issued, all of which had expiry dates. The plan envisaged is that once the permission is issued by DTI, for DHA to take 30 days and DOL no more than 8 weeks to process a visa request andvisa with hand DHA to issue or decline.

When asked by MPs whether or not Home Affairs had a tracking system on visas granted but which had expired, whether working or not, Modiri Matthews responded that they had and the number of expired visas currently stood in the area of 30,000, which were on the tracking system.

Waiting period

Present at the meeting were also Ronnie Marhule, Acting Chief Director of Permits and Visas and Phindiwe Mbhele, Director for Corporate Permits and in question time, Angie Loliwe of the ANC complained to them that if the application were with DTI for even only 2 weeks, then the DOL process was added for thirty days and with Home Affairs adding about 8 weeks, there was not really any possibility of waiting less than three months for any one application to be processed at the very best. This was too long, she said.

Both Directors stated that there were “pressure points” mainly related to capacity to deal with the volumes of applications and this mainly affected “corporate” visas to farm workers. They told members of the Labour Committee that they were trying to deal with this, especially where urgent business applications were concerned.

They reminded MPs that with nearly 300,000 illegal immigrants, systems such as an “expired document” process was a time consuming business and DOL “had their work already cut out with the farming situation and inspections.”

One track discussion

Ninety per cent of the meeting time was spent discussing farm labour problems in the light of ANC problems with illegal labour entry to the North. Modiri Matthews said that there were only 11 centres in South Africa handling visa applications. There was a new office in Sandton, Johannesburg, he said, specifically geared to business needs.

To the irritation of some of the ANC members it was confirmed that the offices in East London and Port Elizabeth had been closed.   There was only one office for the whole of KwaZulu-Natal.   However, Matthews said there was was a specific plan to open two new business offices -presumed to be Cape Town and Durban.

Previous articles on category subject
Home Affairs gets tough on expired visas – ParlyReportSA
Home Affairs gives reasons for visa changes – ParlyReportSA
Agri-SA gives views on minimum wage – ParlyReportSA

Posted in Finance, economic, Labour, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Further labour law changes proposed

New labour law on male parental leave…. 

sent to clients 20 Dec…….Cheryllin Dudley MP, an ACDP parliamentarian, has introduced a Private Member’s Bill to Parliament proposingcheryllin dudley amendment to SA labour laws on the general issues of parental issues; adoption of the child and proposals to allow parental leave to both parents with a list of benefits.

Public comment expired on 25 December and being a private members Bill, the invitation came from Parliament and specifically the Secretary to the Portfolio Committee on Labour, for comment. The Bill is entitled the Labour Laws Amendment Bill, a name which is bound to attract attention

MPs themselves are allowed to propose legislation direct to Parliament without reference to the particular government department affected. The Speaker of the House has, by procedure, assented to the tabling of this Bill.

Happier families

Bill seeks to amend the Basic Conditions of Employment Act, 1997, so as to provide for parental, adoption and commissioning parental leave to employees; to provide that a collective agreement may not reduce an employee’s entitlement to parental, adoption or commissioning parental leave and amend the Unemployment Insurance Act. It also provides for the right to claim leave and parental benefits from the Unemployment Insurance Fund.

The issue applying parental leave to “all parents” is obviously proposed in order to include a wider definition to those providing male parental care in terms of leave. The issue of gay adoptive relationships is not included in the actual wording (nor would an ACDP member suggest this) but the purpose of the Bill is apparently not selective as to whom the parents are but rather to significantly expand the recognition of parenthood in general at the workplace.

Family values first

mum dad and babyIn an explanatory memorandum attached to the draft Labour Laws Amendment Bill, the proponent explains that the Bill is primarily trying to get paternity leave legislated as part of its “policy on family values”, which stresses the importance of fathers in families.

It is proposed that any couple can decide which partner takes the 10 days of parental leave and which one takes a standardised two and a half months, cutting this down from four months as allowed under the Basic Employment Act.

One assumes, therefore, that the ACDP, has skirted the issue of gay relationships by accommodating the issue by proposing that all paternity leave would apply to all relationships in a heterosexual relationship but apply equally to one of the partners in a same-sex civil union.

The Bill will go through the normal legislative process, the Department of Labour’s submission therefore being a critical one during parliamentary hearings to be called in due course.

Labour in turmoil

No doubt COSATU and PIC will be more awake to making submissions than was in the case of the Financial Sector Regulations Bill (Twin Peaks) which vitally affected labour conditions insofar as government service and private sector on retirement funds, annuities and pensions, the Act now being signed and claimed as “sneaked” through – as if a change recommended in the 2014/5 Budget could possibly have been.  

Go to http://parlyreportsa.co.za/finance-economic/tax-legislation-for-parliamentary-debate/ for this subject, now in national debate, having passed through the parliamentary arena.

Previous articles on labour category subject
Deliberations reaching final stage on labour laws – ParlyReportSA
Labour Relations Act changes passed – ParlyReportSA
Labour committee ignores strikes – ParlyReportSA
Labour : nobody at top biting the bullet – ParlyReportSA

Posted in Facebook and Twitter, Labour, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Radical White Paper on NHI published

 Feature article……     

NHI  hoped for over fourteen years….

A White Paper on “The Transformation of the Health System in South Africa”  envisaging a functional National Health Scheme or NHI  has been published forhospital new public comment by Minister of Health, Dr Aaron Motsoaledi.  Radical changes to South Africa’s health service to communities are envisaged over a period of fourteen years.

A White Paper usually precedes legislation on the subject in the form of a draft Bill which is mostly published for comment by the Minister whose department has drafted the law. This is before any final legislation is tabled before Parliament for further parliamentary public hearings and debate. Regulations to govern any new structuring of public health would then follow. Therefore, proposals at the moment are at a very early stage and at departmental level and already the Minister has issued a statement on some of the more impractical issues presented in the Paper

The process in this case will undoubtedly be a long and arduous one for the Ministry, since any Bill makes a call for the Minister proposing such a plan or policy at law to make a clear declaration on the financial implications for the state. The massive cost involved could make this one of the major Cabinet decisions since democratic elections were held and recent financial developments must have made National Treasury look at this White Paper somewhat askance.

Big money

The cost to the fiscus would clearly be in the billions, few countries in the world having successfully negotiated the road leading to an option of free national health care for all. The focus, says the SA White Paper, will be initially upon primary health care and mainly in the districts.

To place the White Paper in its context, Nelson Mandela said, on receiving his PhD at Harvard University, “The greatest single challenge facing our globalised world is to combat and eradicate its disparities” but the major question will no doubt occur when National Treasury, in its future appropriations, decides upon which of the greatest disparities it can afford – whether Constitutional imperatives are involved or not.

Objectives

aaron motsolaediThe White Paper, as distinct from any legislation or new framework that might follow, has its objective stated as: “To present to the people of South Africa a set of policy objectives and principles upon which the Unified National Health System of South Africa will be based.”

Various “implementation strategies” are proposed. However, it is acknowledged in the Paper that in the end everything is related back to cost and the White Paper accepts the fact that any plans made are in the light of “the limited resources available”. Yet, nowhere in the world do free national health insurance plans come cheap in part or holistically despite any plans to change South Africa’s health systems structurally even over a period of time.

The plan in this case is to start preventative health care in broad principle and free primary health care for all first but it appears that a fully integrated system has to be agreed initially so that enlarging the system and planning can follow.

Who pays

The taxpayer will foot the Bill, presumably for running costs. Capital costs will assumedly be in the form of raised funds but the White Paper is by no means a financial model, nor it is it intended to be, it seems.    Nothing specific is given on financial plans but one has to remember that only 2% of the South African population is estimated to pay more than half of income tax.

The history of providing a national health care system goes back to well prior to 1994 when the ANC, emerging from exile, produced such a paper on the subject or probably better referred to as a manifesto. Free health for all has been a refrain of the ANC for many years.

Earlier White Paper

Dr. Nkosazana Dlamini Zuma, when Minister of Health, also produced a White Paper that seems to have struckNkosazana Dlamini Zuma a chord that survived. This was before the outbreak of HIV/AIDS, which occurred in the time of her successor, and this Paper stated frankly but logically that “health strategies had to be based on the belief that the task at hand requires the pooling of both our public and private resources”. Sensible talk at the time.

The goal then was “the creation of a unitary, comprehensive, equitable and integrated national health system”, Dr Zuma said. “The challenge facing South Africans was to design a comprehensive programme to redress social and economic injustices, eradicate poverty, reduce waste, increase efficiency and to promote greater control by communities and individuals over all aspects of their lives.”

She gave warning signals to the private sector at the time, particularly those major players in the life assurance industry and the fewer medical aid societies which then existed, that the status quo as it stood could not continue.

It is reported that there have been over twenty White Papers or manifestos on national health for all over the last thirty years.

Getting nowhere

To the immense irritation of many successive Ministries of Health, and particularly to the incumbent Minster, aarom motsoloadiDr Aaron Motsoaledi, very little of substance has been forthcoming and now, on the subject of national health schemes, a somewhat beleaguered ANC is watching some of the major players opting for overseas development from their profits rather than, in the Minister’s view, by meeting the department of health (DOH) at least half way locally with some of this investment. However, the Paper is somewhat “fuzzy” over the involvement of the private sector.

Bad timing

The launch of the White Paper was an extremely low-key affair considering it followed the shock announcement of Finance Minister Nene’s dismissal. Consequently, Minister Aaron Motsoaledi’s long-awaited presentation went largely without intensive questioning by the media as to its practicality.

To put it another way, since the particular briefing on the White Paper on Health Services Transformation was the first head-on meeting between the media and government minsters following President Zuma’s announcement of the firing of Minister Nene, Minister Jeff Radebe, (ANC -SACP) introduced Dr Motsoaledi to an audience much more interested in questions regarding the shambles in the financial world.

The DOH Director General of Health was not there and a much rattled Minister Motsoaledi presented his plans. No representative of National Treasury was present. The briefing went largely unnoticed by the press therefore.

The central fund

private wardIn essence, the White Paper proposes the establishment of a National Health Insurance (NHI) Fund and a policy requiring substantial changes to the way the current health system works by interlocking or possibly by cooperating with both the private and public health care systems. The exact way this will work is not proposed but in principle referred to. Much is stated on departmental restructuring.

There is clear ideology expressed that that health care should be regarded as a social investment and not subjected toaneurin bevan market forces. The parallel with Aneurin Bevan, the Welsh coal miner’s son who in 1949, who as the Labour Party left wing socialist Minister of Health spearheaded the establishment of the British National Health Service, is self-evident. Dr Motsoaledi’s plan is to do much the same but this is over fourteen years and in three phases.

The process in the White Paper is described as “unifying the fragmented health services at all levels into a comprehensive and integrated health service”. This implementation process will be undertaken by “six work streams” which are stated as already have been set up, the first being to set up an NHI Fund, the “big pot” that pays for all the services provided. Other teams are to deal with such issues as accreditation of providers and the key to service delivery of an NHI, the beefing up of district health systems.

Health mirrors social success

stethoscopeIn passing, it is noted that that the White Paper is careful to integrate its goals with that of the Reconstruction and Development Plan (RDP). The Paper sees itself as the litmus test of developmental issues to redress the past in water, sanitation, electricity connections and health education, all factors leading to better community health.

The Paper enlarges on this parallel with the statement, “With the RDP’s focus on meeting basic needs, the development and improvement of housing and services like water and sanitation, the environment, nutrition and health care represents its most direct attack on ill health.”

“It follows that trends in health status during and following the implementation of the RDP will be amongst the most important indicators of the success of the entire programme. The Department of Health aims to ensure that the health sector succeeds in fulfilling this vital role in ensuring progress.” Obviously an attempt to get higher up in the queue for funds.

The three tiers

township housesThe White Paper emphasises that the “health sector must play its part in promoting equity by developing a single, unified health system” and also stresses that “the three spheres of government, NGOs and the private sector will unite in the promotion of common goals.”    Hence, the first phase is very much focused upon the delivery of free primary health care at district level and at “at first point of contact” by the patient.

There are some twenty-four chapters for the technically minded and medical professionals to pour over but in theory the country will be divided into “geographically coherent, functional health districts. In each health district, a team will be responsible for the planning and management of all local health services for a defined population in each.”

In passing the Paper notes that peri-urban, farming and rural areas will fall within the same health district as the towns with which they have the closest economic and social links. “The fragmentation and inequity created by the past practice of separating peri-urban and rural health services from the adjacent municipal health services must be eradicated”, the Paper says.

National pay parity

The Paper lays down that “There will be parity in salaries and conditions of service for all public sector health personnel throughout the country”, adding also “which will include appropriate incentives to encourage people to work in under serviced areas.

The whole idea would seem to involve many billions of rands per year from the taxpayer, the taxpayer presumably having options to re-structure their own insurance cover bearing in mind the eventual “free” system.   This is aside from a massive CAPEX call to build the system. The details of either are not indicated, this stage not having been reached assumedly where any further infrastructure build is being considered, so commentators have found it difficult to draw conclusions without knowing the financial burden other than its enormity in the long-term.

As its so happens, South Africa’s  current private hospital system is rated the fourth best in the world but the moral point is made again and again in the White Paper that the current system is only for those who can afford good medical intervention. Options on how the private sector will be accommodated are not debated in any detail.

U-Turn

However, in a recent media interview, Dr Motsoaledi backtracked on the inference that all had to use the NHI and that only small sections would be left open for medical aid schemes to negotiate with the public.

The impracticality and overwhelming costs of this must have got home to the Minister, probably in debate with stakeholders, and the general direction seems to be to leave the choices as they are. Rather the impetus will be to focus the White Paper conclusions towards the re-building of primary health care systems and the establishment of improved health care in the more underdeveloped provincial zones and under-serviced particularly rural areas.

The big factor

On the private medical profession itself, the Paper says, “Private health practitioners should be integrated with the public sector with regard to the provision and management of services”. Policies adopted “should apply to all private practitioners including private midwives, general medical and dental practitioners, specialist obstetricians and gynaecologists, paediatricians and private pharmacists.

doctor consulting roomServices delivered by occupational health practitioners, and prison and military health authorities, should be subject to the same principles.” Once again, Dr Motsoaledi has toned this down somewhat in subsequent statements but some sort of pooling of resources is envisaged.

 

Accreditation according to DOH “rules”

The White Paper stresses that all institutions and health practitioners will have to be accredited to an Office of Health Standards Compliance (OHSC) “based on set criteria” and therefore it follows that only those that are accredited by the OHSC as providers, whether suppliers or medical practitioners, will get payment from the NHI Fund, the Paper says.

The White Paper admits that because of potential problems envisaged with a too rapid introduction of OHSC accredited private provider systems, public facilities will remain the dominant public health care providers funded by the government for the first few years. Accredited private providers will be introduced gradually, particularly in currently under-serviced areas, the Paper continues.

Where full and/or part-time OHSC practitioners are in short supply, DOH say that private practitioners’ services will be used through referral contracts, and patients will be referred to a general practitioner by the public health system it seems.

Health for all

The White Paper as published sees the end game as an NHI Fund being “financed” by compulsory means from all citizens and permanent residents and the fund will purchase a range of health services from accredited public and private health institutions, as well as contracted private health practitioners.

The end-scenario in the White Paper as published is that all citizens and permanent residents will be able to access the NHI Fund for health services without further payment. Dr Motsoaledi has clearly recognised that such a  journey for his Ministry is going to be a long one.

Whilst, again this rather unclear document sees medical schemes as only being allowed to offer “complementary services” not provided by the NHI system this is where the Minister has backtracked even further.

 Even specialists handled by NHI

Access to specialists will be dealt with by the NHI system according to diagnosis and needs, says the Paper.  Whether DOH has the competency, skills and follow through, even if over fourteen years, and whether doctors, GPs and medical professionals “buy in” to the idea will no doubt be the subject of much media comment before the matter gets to Parliament.

Opposition members have already discounted the programme as “reckless”, probably voicing the opinion of many of those who prefer the current system with their medical aid schemes and the reliability of service they get as a result.

Bodies such as the Free Market Foundation have stated that the State would be better occupied worrying about leon louwhealth services for the poor and not overextending State finances on grandiose schemes. Even the trade unions seem unhappy, who have spent many years to achieve medical aid cover as part of their pay packages, it is reported.

Big plans, big obstacles

No doubt matters regarding the White Paper will emerge in the business programme of the Portfolio Committee on Health, once Parliament re-opens – perhaps with a workshop. In all, the White Paper outlines some undeniable health system needs in South African  but at the same time the Paper seems very low on the issues of practical application. Probably also the Minister will have to make a lot more adjustments as National Treasury hopefully dig South Africa out of its financial constraints, at long last recognised.

Previous articles on category subject
New health regulations in place soon: DoH – ParlyReportSA
Health dept winning on HIV/AIDS therapy and TB – ParlyReportSA
SA health welfare starts in small way – ParlyReportSA
Parliament told of lack of doctors – ParlyReportSA

Posted in Health, Labour, Trade & Industry0 Comments

Poor showing from Department of Labour

sent to clients 6 October…..

Department roasted by MPs….. 

The Department of Labour (DOL) managed to spend 99% of the money allocated to it in the yearmildred-oliphant 2014/5, but in the same period achieved only 43% of its targets, according to the Auditor General (AG).

Parliament’s Portfolio Committee on Labour in response has now requested that Minister Mildred Oliphant appear before the committee to explain a dismal track record for the department built up over five years.

The committee was studying its own parliamentary overview of the DOL annual report which presentation also included DOL’s first 2015/6 quarterly financial and tasking targets. The overview was prepared in the light of  the AG’s recent audit of the department.

No better than before

In the first quarter of 2015/6, it was noted by the parliamentary overview that performance was little better than a bad previous year, with DOL spending R778.8m of the annual R2.6bn budget in that quarter, reflecting an under-expenditure of R130m with performance against targets also no better despite complaints lodged last year by the parliamentary PC on Labour.

The position was evident after the committee’s parliamentary financial oversight researcher had analyised the Auditor General’s report on DOL’s figures and perfomance in conjunction with reports from the Department of Public Service and Administration (DPA) on the same subject, represented by Phelelani Dlomo of DPA.

Bad history

The sad litany of poor organisation, said Dlomo, went back to 2012 and the R880 000 misspent in a “fruitless and wasteful” manner when a labour imbizo was cancelled at the last minute “due to unforeseen circumstances” in Gauteng.   At no stage over the next 12 month, Dlomo showed, there was little evidence of any marked improvement.

Subsequent failures by the Department of Public Works to “produce invoices for the right year” for new buildings for DOL and failures with inspection and enforcement programmes on labour issues were subsequent reasons for the overall financial misfire. The excuses for underspending of budget in the current 2015/6 first quarter were “slow spending on stationery, office leases and travel, and unfilled but funded vacant positions.

Lumka YengeniChairperson Lumka Yengeni and the Committee were warned by the Parliamentary Legal Advisor that it could not touch upon the issue of the DOL strategic plans because such had been approved by Parliament but what needed to be investigated was the underperformance of employees, since it was at management level that the department was failing on a regular basis.

No show minister

Minister of Labour, Mildred Oliphant, has had a running battle with the main Opposition Party for some time now because of her regular non-appearance before the Portfolio Committee on Labour. In a reply to a tabled parliamentary question on her absence by Ian Ollis MP (DA) that she had “defied and not heeded requests to attend Parliament”, the Minister replied in writing that she had never received any formal invitation, request or summons to attend the Portfolio Committee meetings.

The statement from her Ministry added “there is nothing unusual in parliamentary practice when a Minister is represented by her director general on issues requiring answers on departmental operations and plans.”

“This is not the practice of most Ministers”, said Ollis and added that the majority of Ministers liked toian ollis attend so that they appeared in touch with their departments and are conversant with the issues that their departments.  Without a doubt, he said, this was not the case with the Minister of Labour “who obviously rejected any financial oversight of her department’s performance.”

How bad can it get

Ms. Meisie Nkau of the Auditor General’s office completely supported the parliamentary research and analysis findings undertaken and added “DOL was spending but underachieving”. Opposition members at question time had a field day and asked the auditor general’s office if “DOL was not perhaps the worst department in government”.

Ms. Nkau of the AG’s office replied the DOL was “not the worst department at meeting its targets” but asked all MPs to rather “measure performance of all government departments against the best.”

The questioner, Michael Bagraim of the DA, said that he also suspected corruption in the Compensation Fund and called for a specific report from the Auditor-General’s office on this as soon as possible.

Top down problems

Derrick America (DA) said the accounting officer, DOL, must be held accountable as well. There had been a lack of “consequence management” and what was now evident was the retrogressive nature of the DOL and its entities.

“The Minister must give this committee a commitment as to when action would be taken against non-performing senior managers, who were also tolerating under-performance from their juniors”, he said.

Other articles in this category or as background

Labour : nobody at top biting the bullet – ParlyReportSA

Labour committee ignores strikes – ParlyReportSA

Posted in Labour, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Essential Services Committee remains underfunded

Essential Services agreements for crises….

meeting graphicThe Essential Services Committee (ESC), made up of part-time appointments and administered by the Commission for Conciliation, Mediation and Arbitration (CCMA) but essentially separated from it in terms of the Labour Relations Act (LRA), told the Parliamentary Committee on Labour that it was vastly underfunded to undertake its work on a national scale.

To make his point, ESC’s chairperson, Adv Luvuyo Bono, said he had to pay from his own pocket a portion of his cell phone bill that related to ESC business and only had a totally out of date, second-hand laptop. It was clear throughout the meeting that ESC and CCMA were at odds with each other on financial issues.

CCMA funded but not controlled

The parent body, the CCMA, is the country’s recognised dispute resolution body established in terms of the LRA.   Like ESC, the CCMA is an independent body, does not belong to and is not controlled by any political party, trade union or business.   It “houses” the ESC and attends to the accounting but the work of the ESC is independent of and totally separated by law from the CCMA.

One independent body housing another independent function has clearly led to target plan and budgeting confusion, parliamentarians eventually concluded.

The ESC, as a separate function, conducts investigations and concludes agreements on those groups of employees who can be described as essential services, a critical role inasmuch that their determinations decide which services that, if interrupted, would endanger the life, personal safety or health of the whole or any part of the population.

Constitutional rights always observed

No strikes or lock-outs are permitted in the case of promulgated essential services but in terms of not onlyfloods the Constitution but also the LRA, the issue of  “rights” still apply. ESC are obliged to refer disputes on events involving essential services and the “rights” involved to the CCMA for conciliation and arbitration.

Advocate Bono, the current chairperson of ESC, told Parliament that minimum service agreements (MSAs) were set for the defined essential services, detailing how many persons could go on strike if a strike during an event such as an emergency were to occur.

Out in the open

The work of the ESC has been going on for many years, MPs were told, but never before had the grouping been invited to present separately to Parliament, which invitation had been made by members of the opposition party. CCMA had merely reported on the financing of the ESC but not its work.

Adv BonoAdv. Bono told parliamentarians that, originally, essential services were defined as the police services, the defence force and parliamentary services but more recently  MSAs for municipal traffic services; municipal health; water services; some airport services; nursing including private nursing: blood transfusion and fire-fighting have been and more recently some private old age homes.

No regional coverage

Adv Bono said his entire function was run by only nine people with no regional outreach ability and there was a lack of understanding by the CCMA on what the ESC was and how it should be administered.  Employees, board members and himself were appointed by NEDLAC and were not full time public servants.

In answer to questions by MPs, Adv Bono admitted that of 278 municipalities ESC could only plan to deal with 75 of them in terms of MSAs required. He confirmed that it had been decided by the Minister not to include education. Electricity services were also not at ESC’s radar, he confirmed in answer to a question by MPs on load shedding, should there be an Eskom strike.

However, to vastly increase the coverage of the ESC and its work nationally was too much to expect with the current structure of ESC and its current budget.

Just tables, chairs, rent and part time fees.

Whilst Adv. Bono was clearly complaining that ESC was underfunded, he said his plans and targets were also constrained because help on administration services and office accommodation that came from CCMA were particularly limited. They were, however, separated by law in terms of the LRA and such a system was not really workable.

CCMA’s director, Nerine Kahn, told MPs that ESC’s budget had increased by 140% in the past three years and R3.8m was what the ESC had requested, which they got for what they said they could undertake.  In 2012, the budget was less than R1m. She could not comment on the work of the ESC, however, and its intentions.

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Labour relations bill rejected

LRA amendment on strike violence rejected….

ian ollisThe Portfolio Committee on Labour has rejected a Private Member’s Bill, the Labour Relations Amendment Bill proposed by Shadow Minister of Labour, Ian Ollis, to make provision for trade unions to be accountable in the event of violence, destruction of property and intimidation by union members during a protected strike.

The background to the Bill noted that “statistics from the protest action in the metal and engineering sector showed that in the first two weeks of that strike, 246 cases of intimidation, 50 violent ‘incidents’ and 85 cases of vandalism were recorded.

Duty to take reasonable steps

“The Bill seeks to provide a statutory duty on trade unions to take reasonable steps to prevent harm to persons and property within the Act”, said Ian Ollis MP, when tabling the Bill noting that his Bill had been stalled since 2010.

COSATU spokesperson Patrick Craven at the time responded with the statement that “COSATU will campaign relentlessly, thorough the alliance, in Parliament, at the Constitutional court and in the streets, to ensure that such a law is defeated.”\

Cabinet says we have the tools

Meanwhile, when President Zuma addressed the House in his State of Nation Address he condemned violence associated with strikes but said, “We have enough instruments in our labour relations machinery to resolve labour disputes.”

When presenting the Bill to Parliament in the current session, Ian Ollis said that the Bill could specify penalties, but also it envisaged a situation where the Labour Court is given permission to order parties, if a strike turned violent, to arbitration.

The Department of Labour (DoL) distanced itself from the Bill, Director-General, Thobile Lamati sayingThobile Lamati that these issues that were being addressed at NEDLAC level.

As a result of the meeting, a further Labour Portfolio Committee meeting heard the advice of Parliamentary Legal Adviser, Ms Noluthando Mpikashe, who told the Committee that although the Bill has no constitutional defects, existing legislation catered for all its contents.   She cited the Gatherings Act (Section 11) as a satisfactory answer and that the proposed Bill was pre-empting the NEDLAC deliberations.

Back to Marikana

Ollis responded that the Bill simply proposed that unions be held accountable for the conduct of their members during strike action. This will ensure not only accountability, but safety of the non-striking workers and added that “had the Bill been in place, lives would have been saved at Marikana.”

He complained “The Gatherings Act does not regulate any behaviour outside an approved gathering. The Bill before the Committee speaks to actions resulting from unapproved gatherings. The Bill also calls for the granting of permission to the Labour Court to force arbitration once a strike had turned violent,” he said.

He also complained in previous meetings that that the Opposition did not have a voice in NEDLAC. It could not give any input. The duty of the Opposition was to propose new ideas with regard to legislation, and the only way to reach NEDLAC was through the Portfolio Committee.

Bill voted out

Chairperson Yengeni rejected totally the claim that Opposition parties could not address NEDLAC directly. She said there were channels available to engage any entity of government.  She thanked Shadow Minister Ollis for his Bill and all the work that had gone into it but said “When the NEDLAC process is complete, the Committee will be the wiser”. Using its majority, ANC MPs rejected the Bill in its totality, the IFP abstaining.

Chairperson Lumka Yengeni stated afterwards, “The Bill is rejected by the Committee as it is not raising anything new. All its contents are captured in the Regulation of Gatherings Act,” she said. “The Department of Labour is on top of the situation”, she added.

Shadow Minister Ollis said, “The violence will continue. Therefore the current platform is inadequate.”

Other articles in this category or as background
Parliament delays process on Labour Relations Bill – ParlyReportSA
Muscle may be added to LRA – ParlyReportSA

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Gender Equality Bill goes out of the door

Minister cans idea of gender equality bill…..

susan shabanguMinister Susan Shabangu, minister in the Presidency Responsible for Women’s Affairs, says she will not be re-introducing to Parliament the Gender Equality Bill which lapsed at the end of the last term of Parliament and has remained unsigned by President Zuma since.

The controversial and totally impractical Women Empowerment and Gender Equality Bill, to give it it’s full name, has now been totally scrapped by Minister Shabangu and at recent parliamentary media briefing she announced that it will not be resuscitated in any form in the future.  

The legislation would have obliged companies to progressively achieve 50% representation for women in top levels of management, business and industry representatives quickly pointing out that this was both impractical and unenforceable.

President Zuma not signing

Originally tabled by former Minister of the old department of women, children and people with disabilities, Lulu Xingwana, the Bill was surprisingly hammered through Parliament with a hefty ANC majority in the last government despite being rejected by all social partners in Nedlac due to its “vagueness and ambiguity.   

In the meanwhile it has sat unsigned by President Zuma, new Minister Shabangu admitting to Parliament that it was tabled without sufficient consultation and would be re-introduced when more consultation had taken place.

The Bill stipulated that all public and also “designated bodies” nominated by the Minister at the time would have to submit plans for progressively achieving 50% representation for women in their decision-making structures.

Criminalising non-achievers

The proposed fines were stated as a maximum of 10% of annual turnover for continuous offenders, whilst the directors or CEOs of designated bodies could be liable on conviction to imprisonment for a period not exceeding five years.   The Bill, as it was worded, overrode other laws dealing with empowerment.

Now sense has prevailed.  In her parliamentary briefing, Minister Shabangu confirmed that the current Equality Act covered the same territory and her department was now going to establish whether this Act was “delivering on its promises” as far as women’s empowerment was concerned.

Other articles in this category or as background
http://parlyreportsa.co.za/bee/back-comes-gender-bill-for-rethink/
http://parlyreportsa.co.za/trade-industry/gender-equality-act-gets-going-new-form/

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DTI does flip flop on BEE codes

B-BBEE codes changed on “management control”…

Rob+DaviesA  lack of understanding of the effect of B-BBEE Codes on business and the industrial environment, despite a workshop on the subject, was demonstrated when the department of trade and industry (DTI) amended its own amendment in a matter of days on the point scoring issue in terms of broad- based employment share ownership schemes.

More emphasis has been placed in the Codes generally on procurement from black business, now referred to as “supplier development”.

As you were…

However, the minister of trade and industry, Dr Rob Davies, confirmed in a statement that the second amendment corrected the changes as far as employment schemes were concerned and any such changes would not be retrospective on deals already done, such earlier deals continuing to reap the same benefits under B-BBEE Code pointing as before.

Control is everything

Minister Davies said that DTI still had a think tank operating on how further to make BEE in generalplan BEE more effective insofar as pressure on business was concerned to effectively ensure that management, control and ownership by black persons was increased.  His task team appointed would report back by the end of the month. He repeated this in his budget vote speech.

DTI completely avoided established government procedure by issuing an “explanatory notice” to a gazetted publication on B-BBEE procedures by announcing a completely new aspect on the rules on B-BBEE award-pointing, in this case termed as “amending guidelines”, thus avoiding the issue of public comment.

Most worrying was the fact that minister Rob Davies failed to make any reference to this in his earlier introduction to DTI’s strategic plan to Parliament a week before, subsequently presented to the portfolio committee on trade and industry by DG Lionel October and then to the select committee on economic affairs in the NCOP.

Forgot the union movement

Just as as business leaders were, so was the trade union movement, many of whose members are part of share employment schemes, options or not, and are therefore touched on the issue of reduced profit and dividends.

As far as not mentioning this in a budget vote speech, which was an excellent opportunity to inform business, there is fine line, say opposition members, between failure to disclose to Parliament and avoiding a contentious disclosure to Parliament that that might compromise a negotiation but in this particular case of changes to B-BBEE, the matter  appears to have only involved some members of cabinet and certainly none of the large spectrum of stakeholders involved. It all came as a big surprise.

The minister has published two further notices on the amended B-BBEE Codes regarding the second phase now implemented. The Chamber of Mines was yet another body caught by complete surprise, thinking that their relationships, in this case the minister of mineral resources, were far better than they actually now seem to be. There seemed to be a vacuum in communications.

DTI has now reported to Parliament on subject

To the rescue...

To the rescue…

DTI, in the form of DG Lionel October, has since reported to Parliament on the subject of the amended B-BBEE Codes of Good Practice and explained that Minister Davies had admitted that DTI had taken the wrong route with all good intention “to take a narrower view on black management control” but now had apologised for the descision, now reversed, on this aspect of the pointing system. All is reversed, retrospectively as well.

A full report is with our clients with further comments by DTI on the Codes and their application as revised “after the event”.     This analysis of DTI’s presentation will be archived to this website in the course of time.

In the meanwhile, we note that there is useful extra-parliamentary political comment on http://www.polity.org.za/article/da-geordin-hill-lewis-calls-for-debate-in-parliament-over-elitist-bee-codes-2015-05-08

Other articles in this category or as background on this website
http://parlyreportsa.co.za/bee/dti-earns-ire-parliament-bee/
http://parlyreportsa.co.za/bee/liquid-fuels-industry-short-transformation/
http://parlyreportsa.co.za/bee/one-year-implement-b-bbee-codes/
http://parlyreportsa.co.za/bee/b-bbee-codes-of-good-practice-far-onerous/

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Private Security Industry Bill comes closer

Motive for Private Security Bill unclear…..

adt securityAs of this date, the Private Security Industry Bill still remains for signature by President Zuma passing it into law, having had the contentious clause that South Africans must own at least 49% of shareholding of any security companies, as proscribed in the original Bill passed by Parliament, increased to 51%.

However, from statements made by senior officials in the department of police and the minister himself it seems quite possible that government will push the law through despite the stated objections of security  industry associations and the possibility of the industry taking government to court on the matter.

The Bill introduced two years by minister Nathi Mathethwa, then a protégé of president Zuma but now reduced to the post of minister of arts and culture, posed the reasons for a controlling number of 51% being the result of the possibility of national security breaches by foreigners in South Africans affairs. This has never been defined.

Ek is die Suid-Afrikaanse

Such a matter was stated by the local security industry as being absurd since most South African management, local shareholders and certainly the majority of employees were South Africans anyway. In can only be assumed that the government thinks their are “plants” by foreign countries working in the industry, or alternatively, the reasons given by the state are a cover for some other motive, as of yet not clear.

Immediately the Bill was tabled, opposition members in Parliament pointed out that such a law would place SA not only in violation of international trade agreements but place the country in jeopardy of renewal of AGOA by the United States, of valuable export trading advantage to South Africa.

Particularly, South Africa is in danger of violating GATT agreements, but the minister of police has responded with the names of other countries discounting international agreements on the issue of local ownership control.

In a rush to close Parliament for the May elections last year, the Private Security Industry Bill, with other Bills, was hammered through Parliament using every possible ANC vote but, however with the 51% clause reduced to 49%.  This has now been reversed.

Trade and Industry unconcerned

Unless the Bill is returned to Parliament unsigned, a course, which would seemingly make the new police minister Nkosinathi Nhleko unhappy, and with minister of trade and industry (DTI), Rob Davies, appearing ambivalent on the whole issue, all would seem set for a suicidal dive into unknown international trading waters as far as obligations are concerned.

This is despite a trade delegation visit to the US on the subject. Recent statements by US congressmen and a joint letter addressed by them to SA on other possible violations of GATT by the DTI, particularly on poultry import issues threatening AGOA, are all being played down by cabinet ministers.

 American Chamber of Commerce in SA have pointed to the difficulty, not only with B-BBEE but with this proposal, the difficulty US/SA companies operating in South Africa have with their head offices in parting with ownership of their companies.

The police minister says that he “finds that South Africa will meet its trade obligations under GATT and the action will not threaten AGOA” – an unusual statement for a minister of police, whilst DTI itself, or the minister of trade and industry, still seem have their heads well below the water line.

Under the skin

Eventually, it will emerge what it that is so worrying to the department of police about companies like ADT, Tyco, Securitas, Chubb and the many Japanese, Korean and British companies involved in the manufacture and supply of security equipment….. all at the risk of disinvestment or, worse, maybe an imagined xenophobic wish for these countries not to employ ex-pats or immigrants from other parts of Africa. 

Other articles in this category or as background

No moves on new Private Security Industry law – ParlyReportSA

Private Security Industry Bill gets through Parliament – ParlyReportSA

DA’s Crucial Infrastructure Bill tabled on security – ParlyReportSA

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Parliament circulates Russian technology agreement

 

Partnership in techno between SA and Russia…

russian flagThe agreement between the Republic of South Africa and the Russian Federation on scientific and technological cooperation has now been tabled in Parliament, according to a notice published recently. It includes an annex between the same parties, the point being made strongly that both Russia and South Africa are part of BRICS which includes Brazil, India and China and indicating similar agreements. After much to-ing and fro-ing in 2014 between Moscow and Pretoria by minister of energy Tina Joemat-Pettersson and a separate visit by President Zuma for personal reasons it seems but who met President Vladimir Putin, a Russian Federation delegation was reported as having visited Tuynhuis in the Parliamentary precinct in early December last year, meeting Speaker of the House, Baleka Mbete.

The “R” in BRICs

The actual agreement was signed by the chairperson of the National Council of Provinces, Thandi Modise, who appears to have hosted the event. It was also signed by the deputy chairperson of the council of the Federation of the Federal Assembly of the Russian Federation, Ilyas Magomed-Salamovich Umakhanov. In a statement issued at the time in Cape Town, it was announced that “the two Parliaments had agreed to strengthen ties and cooperation through exchange programmes and to encourage freer movement of people between the two countries.”

Not just science

Education, agriculture, economic cooperation and coordination in the global arena were also identified as key areas for closer cooperation. “This memorandum of understanding is testimony to the historical, present and future ties between our countries,” Ms Modise said.   With regard to the use of the word “historical”, President Zuma mentioned in his recent SONA address that the bodies of “two veterans of the apartheid struggle” were to be repatriated and re-buried in South Africa. The statement issued at the time by Ms Modise stated, “Members of Parliament should not be left behind in developments taking place at executive level between their countries.” Other articles in this category or as background Nuclear goes ahead: maybe “strategic partner” – ParlyReportSA Nuclear and gas workshop meeting – ParlyReportSA National nuclear control centre now in place – ParlyReportSA

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Lumka Yengeni

National minimum wage hearings completed

Labour committee to get consolidated report…..

ncop

 

In the light of the fact that any legislation to be considered on the subject of a national minimum wage would involve all undertakings on a national basis and a major cross section of its citizenry, Lumka Yengeni, chairperson of the parliamentary portfolio committee on labour, finalised the provincial stage of her hearings.  Localised hearings were held in the Northern provinces last year and now in the balance of provinces after Parliament re-assembled.

The reason for this laborious process is that any such labour legislation would come under section 76 of the Constitution, which demands that debate and approval is not only at national level within the National Assembly (NA) but also with the concurrence of the relevant select committee of the National Council of Provinces (NCOP).

Hearing the people……

Such legislation has to have the approval of each of the nine provincial legislatures and such mandates are passed back to the NCOP and have to be found in tandem with any NA approval.   Yengeni is therefore sounding out the market place, as it were, for the idea of a national minimum wage

Whether it would require a separate Bill or an amendment to the LRA is a premature thought at this stage, probably the former in the light that it would need another commission, another departmental structure, probably a tribunal, enforceable laws with penalties and very specific regulations.

ANC seems set on changes

BUSA, Chamber of Mines, labour brokers, Agri-SA and others have already made submissions on a national basis before Parliament closed and the extraordinary thing was that a parliamentary committee should have taken upon itself to debate the whole issue just before meetings on the same subject scheduled by Deputy President, Cyril Ramaphosa.

Nevertheless, Agri-SA, in responding from one of the most problematic perspectives, told parliamentarians that a minimum wage set at a higher level than at present as part of a national application would result in a “considerable number of structural changes within the farming industry to accommodate what would undoubtedly be a call for higher wages in many spheres at many different levels of training and expertise.”

They warned that “to adjust and maintain their competitiveness and profitability” such a policy would be characterised by the shedding of jobs, increased mechanisation and the consolidation of farming units” – as had happened in the past they said.

FAWU zeroes in on agric

Food and Allied Workers Union said that any comparison to the minimum wage in nearby countries “was an insult” and said that that South African farmers on the whole were paying “poverty wages”. The cost of food to poorer families became a major debating area during the hearings, although there seemed to be tacit acceptance that the issue was to become an accepted fact on the labour horizon.

During the hearings recently in Gauteng, COSATU now seems to be suggesting remuneration somewhere in the area of R7,000 per month, submissions also coming from major industrial players in South Africa’s heavy industry sector. COSATU comments after the hearings where finally completed and in interview seemed to come “poker style” to an admittance that a minimum to them was seen at about R4,500.

Other articles in this category or as background
Agri-SA gives views on minimum wage – ParlyReportSA
Parliament debates national minimum wage – ParlyReportSA
Labour committee ignores strikes – ParlyReportSA

 

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National low income retirement plan ahead

 State retirement plan possible….

dol logoIn terms of what has been expected for quite some time, the department of labour (DoL) is soon to launch an investigation into a national retirement mechanism for low income earners. Such has been announced to the parliamentary committee on labour.

DoL, in a statement issued shortly after the meeting had been held, added that a discussion paper on the issue would be tabled at Nedlac in the near future.

In the last month of the previous parliamentary session the portfolio committee on labour held a number of workshops on the minimum wage issue and other matters perceived as critical in the labour field. Pensions for low income earners was one of them.

Stakeholders join in

During these workshops, which the department’s performance against set targets contained in the strategic plan and annual performance plan was evaluated, strategies were developed by participating parties, contributing parliamentarians and DoL.

DoL also stated that it would be talking to ILO as part of its investigations into a national retirement programme, not only as far as best practices were concerned but also into what had been found possible and practical at certain income levels elsewhere.

old mutual logoIn a recent survey undertaken by the Old Mutual on retirement plans, 42% of respondents were found to have no formal retirement provision in place at all and 85% of those that did, stated their concern on not having enough money to retire as their greatest worry due to fears surrounding inflation.

DoL is now to go a step further into the area of the of an income bracket lower than dealt with by private pension fund operators and, says DoL, plans are also afoot to investigate the possibility of including government employees in the benefits offered by UIF and also the effectiveness of the Compensation for Occupational Injuries and Diseases Act.

Other articles in this category or as background
Labour committee ignores strikes – ParlyReportSA
Parliament delays process on Labour Relations Bill – ParlyReportSA

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Muscle may be added to LRA

Feature article….

BS000318LRA needs beefing up, says DA ….

A political confrontation is no doubt about to occur and possibly street unrest regarding the parliamentary notice now gazetted tabling a Bill proposing changes to the Labour Relations Act (LRA).

It also proposes empowering  labour courts to declare the cessation of a protected strike or to refer the protected strike for arbitration in the event of riot damage.

Public comment to Parliament was allowable until December 7 on the Labour Relations Amendment Bill PMB2-2014, which DA MP, Ian Ollis, intends introducing a private member’s bill.

Responsibility for violence

The opening wording of the gazetted notice stated that notice of an intention to “amend the Labour Relations Act (No. 6 of 1995) to make provision for trade unions to be accountable in the event of violence, destruction of property and intimidation by union members during a protected strike, and comments are requested.”

The background to the Bill notes that “statistics from recent protest action in the metal and engineering sector show that in the first two weeks of the strike, 246 cases of intimidation, 50 violent ‘incidents’ and 85 cases of vandalism were recorded.”

Views of Cosatu

Cosatu spokesperson Patrick Craven said, in response to DA statements issued as result of the gazette being published, “COSATU will campaign relentlessly, thorough the alliance, in Parliament, at the Constitutional court and in the streets, to ensure that such a law is defeated.”

By “alliance”, Craven is presumably referring to factors such as whether ANC MPs will join ranks and vote against the Bill at portfolio committee level when introduced.   This meeting will not occur until at least February and March 2015.

It is to be noted that as a private member’s Bill, this Bill is not tabled by the minister of labour, nor is associated in any way to any draft or proposal emanating from the department of labour.

How to strike properly

 The Bill, as proposed, provides for the accountability of trade unions in the event of violence, destruction to property and intimidation by union members during a protected strike.  The legislation also requires unions to educate workers regarding violence and on labour law procedures before strikes and by law unions are to provide marshals for crowd control who have been

ian ollisOllis, who is shadow minister for labour, says that his Bill also proposes that “courts would be empowered to stop a strike that is  properly trained for such and “to prevent criminals infiltrating union ranks”.excessively violent by forcing the parties into arbitration, to declare a violent strike as unprotected and to award damages against unions that have not implemented  such processes.

Bill not needed

The proposals also state that courts would be empowered to award damages against unions that have not implemented the law’s required staff education and crowd marshal training.

Cosatu flatly rejects the Bill. Says Craven, “Cosatu has consistently opposed violence, intimidation and damage to property during strikes and demonstrations, all of which are offences under existing laws and therefore require no new law to deal with them.”

The difficulty is holding unions to account for violence, a matter which is being attempted to be defined by Ollis, outsiders asking whether laws passed by Parliament are the answer or the problem.

There also appears to be two arguments, or camps of thought, on violence associated with strike action in South Africa.  Many commentators and a wealth of labour lawyers and have pronounced upon these arguments and no doubt they will emerge in Parliament in more detail should the Bill get to the point of being debated.

Two views

The points seem to be the extent to which community poverty and frustration extend into the situation, whether the answer to solve violence exists in the workplace and whether the ability of any law to criminalise contraventions of labour relations tenets can work and if this is the answer.

The kind of frustration that is evident become obvious, as media reported, when a union member exclaimed during the NUMSA metalworkers strike, “If we settle the strike and we get back to work we can save our company and we won’t lose our houses and our cars.   Why on earth would we go to court and start fighting again, risk everything, to get maybe a little bit of money compared to losing all our belongings?” he asked.  This point is raised by Ollis.

But damage to property is the least of the problems, says UCT’s humanities dean, Sakhela Buhlungu, in a speech in Cape Town recently. “The real thing is the loss of lives. With damages, in fact the beneficiaries, if this Bill goes through, will be the people who own property.   It is the poor people who will be caught in the crossfire because they are viewed as  scabbing. How do you compensate those people?  Do you say the unions must pay for lost lives?  You can’t quantify that”, she told her audience.

Poverty driven

Clearly the violence is well outside the arena of whether collective bargaining is working or not but the one view is that it is another manifestation of community frustration amongst those living below the breadline.

Buhlungu said to her audience, “Look at domestic violence; it is out of control.  Look at child rape; it is out of control.  Look at violence by the police against the public; it is out of control.  Violence is so pervasive that, in fact, it would be a surprise if a strike were not violent.”   Clearly, she said, the passing of laws will not resolve such issues.

On the same side of the coin also is the pragmatic view noted by Graeme Simpson, renowned labour writer of many years who in 1994, the year of independence, wrote, “The potential of the workplace as an agency for social change is severely under-utilised, and the narrowly conceived strategies to insulate industrial relations thus actively undermine the potential for relative peace (in the workplace).”

In the context of the violent strikes at that time (Checkers etc), Simpson said, “The vision of most employers has remained rather conservatively limited to futile attempts to insulate or protect the workplace from encroaching violence, rather than engaging in any way with the origins of the problem beyond the factory gates.”

Township stress

Simpson noted that research conducted then by the Centre for the Study of Violence and Reconciliation had shown that community-based violence (whether political or criminal) and the trauma associated with victimisation and stress resulting from potential or indirect victimisation, had the effect of broadly polluting workplace relationships.

There is a vital need – with attendant advantages – for business and trade union leaders, said Simpson, to engage jointly in interactive planning to harness the potential of the working environment as a proactive arena of peaceful social change, whilst simultaneously addressing the concrete needs of the most victimised township communities in general.

In the meanwhile the Centre for the Study of Violence and Reconciliation has evolved a four-pronged approach, it says on its current website, for dealing with the impact of violence on industrial relations. These programmes include the idea that the workplace is a place where violence-related trauma can be treated and training must be given to support and counsel traumatised co-workers.

Bigger business role

Communication, says the Centre, to generate information and sensitivity to the shared problems of violence and their influence on industrial relations is much required and importantly all companies should engage in community development and upliftment involving violence monitoring and conflict resolution processes beyond the shop-floor.

Also the Centre sees as an imperative that there have to be more community development initiatives from all businesses with workforces where worker or community representatives are party to decisions on allocating resources for corporate social upliftment programmes.

The second camp of thought clearly see Marikana as a Rubicon that was crossed which has so totally changed the labour environment that labour courts must have more powers to administer their decisions and that it is the unions that must change. The Bill proposes changes by criminalising failure to adhere to such amendments to the Labour Relations Act or at least making perpetrators culpable. Enough is enough, is the thought pattern.

Said Ollis in a DA statement as the Bill was tabled in Parliament by the Speaker, “A law is needed to ensure that unions be held responsible for all conduct that could potentially cause foreseeable damage to property, result in injury or loss of life.”

“Members of the public and business owners should thus exercise their rights and hold unions accountable for damage to property resulting from strike action,” he concluded.

Round the corner from Parliament, JP Smith, who is responsible for safety and security on the Cape Town mayoral committee said angrily a week or so ago, when accounting for all the damage done by strikers was being accounted for, whether by union members, just frustrated poor people or Cape skollies, “It is about highlighting the individuals, prosecuting them, exposing them to the media. What we need is for actions to have consequences for individuals.”

President’s response

Meanwhile, when speaking in Parliament, President Zuma did indeed condemn the violence associated with the Numsa strike but he gave no indication that concern about violence would result in fundamental changes to policy or legislation, as proposed by Ollis.

“We have enough instruments in our labour relations machinery to resolve labour disputes,” said Zuma to the National Assembly.

According to Patrick Craven of Cosatu, the “draconian principle” of criminalizing unions by default ignores the fact that employers are also at fault and he sees the threat to award financial damages against a union as having the potential to bankrupt unions and force them to disband, “which is surely what the DA, and its friends in business, want”, he added.

Most discount this argument as an exaggeration although it might appeal to Craven’s own audience.

COSATU needs collective bargaining

Craven added that in Cosatu’s view by empowering courts to force employers and unions into arbitration where strikes are excessively violent, or declare such a strike unprotected “would give the state unparalleled power to undermine collective bargaining and the basic human right to withdraw one’s labour.”

The department of labour recently released its Annual Industrial Action Report and this makes for compelling reading, says Johan Botes, director at Cliffe Dekker Hofmeyr, who no doubt will make submissions to Parliament on the subject of the new Bill.

“Most worrying,” notes Botes “is the fact that the percentage of unprotected strikes has increased from 2012 to 2013.   The report indicates that during 2012, 54% of strikes were protected whilst this number fell by 6% in 2013.”

“This may suggest a number of troublesome issues, including lack of regard for the law or the consequences of unlawful conduct, growing frustration and antipathy towards employers, or further support for the view that our collective bargaining processes and (SA labour) practices are in dire need of an overhaul.”

More jobs lost

Botes says it also worrisome that large groups of employees are being exposed to dismissal as result of their participation in unprotected industrial action whereas focus surely ought to be on how to save jobs and limit or prevent unnecessary dismissals.”

“The need for greater compliance with legal requirements before embarking on industrial action should be more emphasized, when considering the alarming reports of other unlawful activities connected with strikes, whether protected or unprotected, and which activities include assault, intimidation and causing damage to property,” he notes.

The ANC, as a party or alliance, has not made its views known at this stage on the Bill, nor any stance to be adopted by its party whips.
Ollis of the DA is convinced that Parliament must pass such an amendment to the LRA “where action could result in injury or loss of life”, thus ratcheting the parliamentary argument up a notch or two.

Fall back

Last word goes to the background of the Bill itself which states, “Though the Regulation of Gatherings Act 1993 the law imposes restrictions and prohibitions upon gatherings and demonstrations that cause “riot damage” to third parties, the current provisions within the legislation fail to address instances where damage caused to persons and property by strikers in the course of promoting the objects of the strike and which does not necessarily occur within the structures of a gathering or demonstration.”

Ollis says, “Indeed, harm caused by strikers often occurs underhandedly at strike-breakers’ homes and as strike participants move to and from strike locations – violence and damage to persons and property therefore occurring outside the formal strictures of a sanctioned strike or gathering, yet acting in furtherance of union-supported collective action.”

He concludes, “This Bill thus seeks to provide a statutory duty on trade unions to take reasonable steps to prevent harm to persons and property within the Act.”
Other articles in this category or as background
http://parlyreportsa.co.za/labour/labour-committee-turns-away-strikes/
http://parlyreportsa.co.za/labour/labour-relations-act-changes-passed/
http://parlyreportsa.co.za/bee/rumblings-in-labour-circles-on-bee/

Posted in Facebook and Twitter, Labour, LinkedIn, Mining, beneficiation, Trade & Industry0 Comments

DTI earns ire of Parliament on BEE

 

Lack of BEE transformation flagged….

plan BEEThe divergence of views on BEE between the parliamentary committee on trade and industry and the department of trade and industry (DTI)  heightened recently with committee chairperson, Joan Fubbs, demanding that within seven days a “technical explanation” as to why  DTI was not hastening speedy transformation within South Africa.

A full report on Broad-Based Black Economic Empowerment (BBBEE) had to be submitted. to all the members of her committee on progress, or the lack of it in certain areas and the reasons why,  she said, and this was to be submitted before the Christmas recess for further debate in the New Year first session.

Uphill presentations

After a presentation on the current position regarding BEE as a broad subject, Ms Nomonde Mesatywa – chief director of DTI’s BEE secretariat – ran into heavy traffic upon her failure to quantify the nature and amount of research that had been conducted on the success or failure of BEE and the total lack of data on its implementation in her presentation.

The governing party MPs bitterly complained regarding the “soft nature” of recent BBBEE legislation, including the recent BEE Amendment Bill and the powers and suspected lack of ability of the proposed BBBEE Commission to enforce any of the current legislation.

Ms Mesatywa went through the standard briefing for the benefit of newer MPs to explain that the Act had been amended and promulgated in January 2014 to ensure standardisation in reporting from all sources reporting across the economy; the BBBEE Commission having been established to monitor and evaluate BBBEE processes.

The new amendment, she said, aligned the anchor legislation with other legislation impacting on BBBEE and with the Codes of Good Practice.  All the provisions had come into effect on 24 October 2014, she said, except for the trumping clause (section 3), which had been deferred for 12 months and would come into force in October 2015.

DTI said the alignment of sector charters was at an advanced stage and included the construction, property, tourism, transport, financial, mining, chartered accountancy, forestry, agriBEE and IT charters.

Elite only benefitting

Committee members from both the opposition and governing party both lodged complaints that there was a public perception that it was only the black elite who benefited from BEE programmes and there was little factual evidence to the contrary that “ordinary black South Africans” were benefitting.

The Democratic Alliance said it was totally offensive that the state offered a reward to companies only if they complied with BEE regulations and if they did not do so, not only could they not do business with the state but also not with any other companies that dealt with state. The DA described this as “awful”.

The EFF was called to order for suggesting that economic transformation would only be realised “if the ANC was taken out of power” but it was the ANC who sought clarity from DTI on how the new mechanism of using a commission in terms of the new Bill could possibly monitor and evaluate compliance “to ensure that the Codes of Good Practice were taken seriously.”

Long term view

DTI responded on the basis that they had been “overseeing, monitoring, and evaluating black empowerment for a long time” and they wished to assure parliamentarians that they had the experience to do this.

With regard to research generally on the subject of BEE compliance, DTI said their the original survey of some ten years ago showed pretty dismal results at around “level four” but DDG Mesatywa said the latest surveys were on the DTI website and had risen to “level eight”.

The chair commented that such kind responses were vague and unhelpful and the nature and lack of adequate quantitative results was unacceptable and, rather than return for a further presentation in view of the Christmas recess, DTI were instructed to respond in writing to Parliament giving exact numbers on it success or failure, sector by sector, within seven days.

ParlyReport will ask for this document.

Other articles in this category or as background
http://parlyreportsa.co.za/bee/court-ruling-equity-quotas-affects-bee/
http://parlyreportsa.co.za/bee/liquid-fuels-industry-short-transformation/
http://parlyreportsa.co.za/bee/one-year-implement-b-bbee-codes/
http://parlyreportsa.co.za/bee/bee-comes-under-scrutiny/

Posted in BEE, Facebook and Twitter, Finance, economic, Labour, LinkedIn, Trade & Industry0 Comments

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