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Competition Commission zeroes in on retailing

Minister on new Competition Commission focus…

large retailerThe Competition Commission is to announce the terms of the market enquiry into “parts” of the retail industry within the next few weeks, said Minister of Economic Development, Ebrahim Patel, in his budget vote speech to Parliament.

What “parts” exactly were not clear from his speech, Minister Patel only saying itebrahim patel would involve large supermarket chains, grocery stores and small retail outlets like spaza shops.

At present the Competition Commission has launched a market enquiry into both the private medical industry and liquefied natural gas distribution process and was now in discussion with the construction industry on a similar restitution package as “redress for their collusion and price-fixing.”

Property ownership focus

Unusually, Minister Patel’s speech was short and to the point but he did say on the Competition Commission would be looking into the retailing industry and property ownership area.

He said the inquiry would involve “The structure of the industry including retail outlets in townships, the tenancy arrangements in shopping malls that seem to squeeze smaller players out and the impact of the growth of large retail chains on competition, jobs and small business development.”

Announcement appears in vacuum

large retailer 2Nothing was said on Minister Patel’s plans for the Competition Commission in the budget vote speech from Minister of Small Business, Lindiwe Zulu, nor in Minister of Trade and Industry, Rob Davies’ speech, DTI having been split the Competition Commission but still interested in entrepreneurship and job creation.

Deputy Minister of Economic Development, Madala Masuku, said nothing at all on the subject the Competition Commission in her speech but did advise Parliament that the department had been on a series of provincial business studies over six months on how to create more jobs and build small businesses and better service to the provinces. That possibly is the basis of what is now happening as a result of what they saw.

Small business seems stifled

The structure of small business and the relationship to retail chain outlets, competitive pricing and rentals must have been part of such observations.spazza

Also minister, Lindiwe Sisulu, before being transferred to the post of minister of human settlements had told the select committee on economic development that “SMMEs contributed 57% of South Africa’s GDP and accounted for 56% of employment.  The National Development Plan (NDP) envisaged that 90% of jobs created would be coming from small and medium enterprises.”

Partnerships in retailing and distribution

She told parliamentarians that economies around the world had shown that jobs were not created by large corporations, but by SMMEs.    However, large corporations and big businesses should seek partnerships in South Africa so that they could assist the department in building small and medium enterprises and thus contribute to economic development, she said.

Manufacturing distribution was also an area discussed at length  in government small business workshopsdistribution recently attended by parliamentarians where it was seen that the large retailers have also control of country wide market distribution at retail level, only dealing with areas providing suitable economic return and more sophisticated road and rail infrastructure.

This market inquiry by Minister Patel therefore has an investigative ring to it rather than any direct attack on certain sectors in the retail industry.

Other articles in this category or as background
http://parlyreportsa.co.za/energy/competition-commission-turns-lp-gas-market/
http://parlyreportsa.co.za/uncategorized/competition-commission-promises-health-care-inquiry/

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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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Lack of skills hampering broadband rollout

Broadband for SA needs local tech….

computerSchoolThe lack of IT skills in broadband development in government, especially those responsible for implementation of the new broadband policy in SA as well as technicians in the field, has become a major issue of debate in Parliament recently.

The department of telecommunications and postal services (DTPS) has increased it spend in consultancy services by nearly 400% in the last year according to its presentation documents to the relevant parliamentary portfolio committee.

Also, once again the rationale behind the splitting of the department of telecommunications and postal services (DTPS) away from the department of communications (DOC) was queried in Parliament as “not being in line with world trends” causing delays in implementation plans.

DTPS in long terms will benefit

Both these issues were responded to by the responsible minister, Dr Siyabonga Cwele, who was in attendance when DTPS presented their strategic and annual performance plans to the relevant portfolio committee.

Dr Cwele said that he was far happier to leave DOC concentrating on matters surrounding the SABC and migration to digital TV, leaving his department (DTPS) to pursue the objective of uplifting South Africa into the world of broadband.

Broadband will help all

This objective also fitted into the plan to re-model and reassess what was expected from the South African Post Office (SAPO) and for government to decide, like many other countries had done, where postal services fitted in and how to consolidate on the valuable rural outreach of SAPO in respect of other services required by poorer sections of the community.

What was clearly missing during the meeting was, according to parliamentarians, exact timelines for broadband introduction to schools, health services, government departments and state owned utilities, Dr Cwele being quite clear that DTPS had been mandated to ensure that affordable broadband was available.

Staff needed to do the job

Dr Cwele acknowledged, however, that DTPS was greatly under qualified to achieve this due to lack of technical skills and the department did not have enough capacity to deliver on its mandate, as this was a very technical sector of public services. It was too early to commit to timelines but at this stage they had to build the staff complement to do the job, he noted.

He said that DTPS had to bring highly skilled young people into the organisation considering the internet revolution and the growing need for national broadband services. “We need skills not expensive managers”, he added.

Technicians not paper creators

It was explained, in general, broadband refers to telecommunication in which a wide band of frequencies is available to transmit information at greatly increased speed, the installation of which should bring costs down, South Africa having some of the highest communication cost factors in the world.

Ms Rosey Sekese, DG, DTPS, in presenting her strategic plan, said her immediate  priorities were:

• broadband connectivity focused on radio frequency spectrum
• cyber security
• the cost to communicate
• an Information Communication Technology (ICT) policy review
• a national e-strategy
• a turnaround plan for SAPO

The total budget allocation for the Department was R1.4 billion, a reduction from R2 billion in the previous financial year.

Opposition members wanted to know the criteria that DTPS had used to choose Telkom as the leading agency in the rollout of broadband and whether this was fair competition.

Also, they asked why DTPS had emphasised the roll-out of e-governance in the public service to meet NDP targets as first objective. Rather, they said, the focus should have been on business and industry, the ICT sector in the commerce and industry sectors needing this and who played a far greater role in economic development and job creation.

Telkom has to lead in this..

TelkomMinister Cwele responded that the selection of Telkom as the leading agency in the rollout of broadband was as a result of Telkom having the largest terrestrial fibre network and was also based on cost, as this was a state owned entity.

On business and industry needs, he also said DTPS needed to find a way to work with the private sector that could improve economic growth and he, the deputy minister and the DG had been in constant engagement with the private sector as it was realised that this was essential.

The department would also work together with the department of trade and industry and the department of small business development to create incentives for investment in SMMEs, as they realised that many small companies had been marginalised by slow internet services and limited access to the many international IT developments taking place and additional sea cable services.

Creating certainty

He added that he was perfectly aware of the challenges in the finalisation of a spectrum policy to internetcreate a smooth path for the regulators and he was also aware of the need to create certainty in the telecommunications industry. He acknowledged that DTPS was following closely the experiences of the Western Cape and Gauteng broadband rollout plans.

The minister promised that all critical posts within DTPS would be filled within the next three months. However, opposition members continued to draw attention to the question of the general IT skills shortage and said it was yet another “crisis about to happen”.

DA’s Gordon Mackenzie noted “a dramatic increase in outsourced services from R52.5m in 2014 to R230m in 2015” and said this route only added to the high cost of communications in South Africa.

Other articles in this category or as background
Overhaul of broadband policy underway – ParlyReportSA
Parliament gets final dates for digital TV – ParlyReportSA
More state powers for ICASA proposed – ParlyReportSA

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Expropriation Bill has now to be faced

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

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

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

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

Public purpose, public interest

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

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

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

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

Expropriation just a “tool”

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

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

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

In line with Constitution

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

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

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

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

Credibility of Bill challenged

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

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

Blaming apartheid and more

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

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

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

Other articles in this category or as background

Zuma goes for traditional support with expropriation –

ParlyReportSA New approach to land reform – ParlyReportSA

Posted in cabinet, Cabinet,Presidential, Earlier Stories, Facebook and Twitter, Land,Agriculture, LinkedIn0 Comments

Pravin tackles COGTA intervention at local level

 COGTA getting somewhere with municipalities…..

pravin gordhan MTBSIt is quite apparent why the seemingly impossible task of integrating local, provincial and national government service has been given to minister Pravin Gordhan of cooperative governance and traditional affairs (COGTA). He seems quite determined that all provinces and municipalities have to deliver on their constitutional mandate.

His department of cooperative governance (DCOG) recently updated Parliament on the current situation, led by some opening remarks by the minister himself.   He went straight to the nub of the issue by stating that section 139 of the Constitution provided for intervention by the relevant provincial executive if a municipality could not or did not fulfil an executive obligation.

First steps

Whilst the Local Government Reform Act, passed in 2014, has helped considerably by refining local electoral areas nationally down to 137, whilst 95 municipal districts have been designated in most cases to correspond with electoral areas. Thus, more representative structures have been established although some suspected at the time this was an election ploy.

Stabilisation of local government was the key, said minister Pravin to parliamentarians, and the process of “Back to Basics”, one of the 16 SIP strategic items on the list of the National Development Plan, was the basis of the department’s 2015/6 annual performance plan. This to ensure municipalities performed in their dealings with local government at the coal face.

Minister Pravin said, “Local government plays a key role in determining whether people live with dignity and whether they are able to access economic opportunities, consequently contributing to the overall development of the country”.    Part of COGTA’s mandate, he said, was to understand and support the development of intergovernmental relations in all three tiers of government.

New Bill to make third tier accountable

vusi madonaselaVusi Madonsela, DG of DCOGTA, advised that they were “aiming to build accountability for performance in local government systems by setting and enforcing clear performance standards by March 2019. To this end a new Intergovernmental Monitoring, Support and Intervention (IMSI) Bill would be processed through Parliament.

The performance of municipal public accounts committees (MPAC’s) therefore in all “dysfunctional municipalities as well as municipalities with adverse and disclaimer opinions would be monitored and enforced”, he said.

Changing attitudes to debt

Madonsela also said, “The culture of payment for services would be encouraged nationally with campaigns” and part of DOCG’s task was to improve the ability of at least 60 municipalities to collect outstanding debt. He named other targets such as to strengthen anti-corruption measures by 2019 and to have achieved a full local government anti corruption tribunal systems working.

He also said DCOG would start with 12 districts to develop integrated development plans and eight cities and towns would also be supported and monitored in developing long term strategies and proper spatial development programmes.

Skills always the problem

Opposition members called on COGTA for better performance by local government training SETAs. Many institutions were conducting training programmes for councillors but in the process had found that many councillors literally have no skills or formal education. Madonsela responded by saying there were now regulations being passed to weed out unqualified persons and those with false CVs.

Minister Pravin agreed that some of the factors that led to dysfunctional local government structures included political instability and problems with service delivery and institutional management inability.  Councillors were nominated and appointed by their political parties, he said, and “perhaps it should be a conversation amongst MPs on how councillors should be appointed.”

Back to “Back to Basics”

The net result at the moment, said minister Gordhan, that one in three municipalities, according to a study conducted nationwide, were failing and the success of the “Back to Basics Programme” would now depend on inter-government transfers to bring in skills and changing the employment criteria to economic, tax and financial viability experience.

He concluded that his department was getting tough where municipalities had broken the law and some of the answers may lie in strengthening district municipalities with specialists and merging some municipalities.   Another option was to abolish local municipalities completely and in their stead, start again with district management areas but he did not elaborate on this.
Other articles in this category or as background
Municipal free basic services slow – ParlyReportSA
Local government skills totally lacking – ParlyReport
Electricity connections not making targets – ParlyReportSA

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South Africa remains without rail plan

 Feature article….

Minister Peters fails on rail policy…

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

Just talking together

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

Since time began…

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

All said before

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

Recent update from Maties

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

Volume of freight critical

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

Lacking in market intelligence

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

Pressing need

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

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SA needs 3 languages not 13, CSIR says

New minimal language policy proposed by CSIR

signpostThe Council for Scientific and Industrial Research (CSIR) says that 77% of South Africans can understand each other in three of the main languages. They have, as a result, proposed that a language policy which recommends English, isiZulu and Sepedi as official languages, be adopted. A draft new language policy has been published in the government gazette for public comment which minimalizes ten of South Africa’s current official languages.

The proposal, however, makes it clear that it also recommends that a policy should be adopted for use of information in additional languages in areas where there is “a regional footprint” and “as far as is practical and reasonable” to respond to requests and communications sent in languages other than the official three.

Sepedi

The organisation says the selection of its three official languages was based on “maximum reach through the principle of mutually intelligible languages”. Sepedi is one of many dialects of the Sotho people, known as Northern Sotho or Sesotho sa Leboa, from whence the homeland name of Lebowa was drawn, and is mostly spoken in the Northern Province of South Africa.     Around  3.7 million people in South Africa use it as their home language, it is reported, and Sepedi is the most common language spoken in the heart of the industrial South Africa, which also has largest residential area.

English

Meanwhile, English is the most common language in schoolbooks. It also the most common “lingua franca” of  trading partners in North America, the Australasias, India, and to a great extent in Africa and Europe, all of which are major trading partners of South Africa. All government correspondence in South Africa has now switched to English as first choice, as does business and commerce by default, which fact is probably related to the fact that this is first choice of the JSE and the IT industry worldwide.

Zulu

IsiZulu, also known as Zulu, is understood by people from the Cape to Zimbabwe and reported to be understood by some 10 million persons.   Zulus are part of the Nguni group of people, taking their name from the chief who founded the royal line in the 16th century.   King Shaka raised the tribe to prominence in the early 19th century, from whom the current dynasty is founded. Over 95% of those who speak isiZulu live in South Africa, meaning that 24% of the population can speak this language, dwarfing other languages except English.

Zulu is the most widely spoken home language in South Africa, rated as understood by 24% of the population, with about 10 million speakers – the vast majority of whom live in South Africa.

Not included

Notable is the fact that both Afrikaans (the language of the political base prior to 1994 and the cause of outbreaks of violence when the language was named as first choice for schools throughout South Africa) and Xhosa (the language of the political base after 1994), are not included.

Neither is Tswana mentioned, one of current eleven official languages in South Africa, which is spoken by a larger number of people actually living in South Africa and not in Botswana, the home of the language. Other articles in this category or as background http://parlyreportsa.co.za/trade-industry/nema-waste-ask-parliamentarians/

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Competition Commission turns to LP gas market

Focus may be on LP gas allocations….

LP gasThe Competition Commission has announced that it will conduct a market inquiry into the state of competition in the LP gas sector.    Public comment is invited from those in the liquified gas petroleum (LPG) sector and the Commission has said that such an inquiry is being initiated because it has reason to believe that there may be features of the sector that prevent, distort or restrict competition.

In its announcement the Commission specifically draws attention to the fact there are six refineries in the country, namely – Sapref, Sasol Synfuels, PetroSA Synfuels, Natref, Enref and Chevref.

Of these, the Commission says, “Only two allocate a certain proportion of their total LPG supply to wholesalers, which may have an impact on competitive dynamics in the downstream wholesale market.”

Value chain additions

The Commission’s inquiries will also extend, they say, to these LPG wholesalers who act as middlemen, or brokers as referred to by the petroleum and gas industry, who “play” the market with allocations from manufacturers.

“Due to the shortages in LPG supply, these firms may have an impact on competitive dynamics at the wholesale level of the market. This impact will be explored during the market inquiry,” the announcement said.

Public participation

The Commission concluded that it would hold public hearings and hoped that “business enterprises along the LPG value chain, other related business enterprises, end-users, government departments, public entities, regulatory authorities, industry associations and any other stakeholders” would assist with their inquiry.

Other articles in this category or as background

  • http://parlyreportsa.co.za//communications/gas-act-changes-closer-to-implementation/
  • http://parlyreportsa.co.za//energy/doe-talks-biofuels-and-biomass/
  • http://parlyreportsa.co.za//uncategorized/competition-commission-promises-health-care-inquiry/

Posted in Energy, Facebook and Twitter, Fuel,oil,renewables, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Informal settlements: lack of progress queried

 

Minister has catch-up job on settlements…

IY2With a budget of nearly R31bn to be spent this year on human settlements issues  to improve the lives of South Africans in the area of housing and more recently sanitation, the department of human settlements (DHS) says it has to come to grips urgently with the situation regarding informal townships in South Africa.

This is according to parliament’s own research team when briefing the new portfolio committee on human settlements on the housing backlog under its new ANC chairperson, Ms Macwene Semenya.

The briefing also touched on government’s plan to achieve eradication of sanitation backlogs by 2014, set at one year prior to the target specified by the UN’s millennium development goals.

Good track record

These and other major problems add to the catch-up pressure upon the new minister of human settlements, Connie September, who has a long-standing relationship with Parliament serving in the past on the trade and industry, water and joint rules portfolio committees and who has played an important role in the development of COSATU.

The portfolio committee was told that DHS worked to a difficult framework in terms of various policies, constitutional and legislative aspects, to assist and enable municipalities to manage housing developments within their areas of jurisdiction.

DHS does not build houses as many assume, they said, but attends to the finance in terms of appropriations transferred to 250 municipalities through provincial government on an accredited basis to make this happen, parliamentarians were told.

Finance for municipalities

Within three years of finance being received from DHS in terms of the Municipal Finance Management Act (MFMA), each municipality has to plan, implement and maintain housing in the terms of a national integrated plan but first the municipality plans had to be perused and accredited by DHS in order to receive funding.

This is a complex process that needs long-term projects, major reforms and needing a strong political will, the committee was told.   It is here that DHS is experiencing its main problems, or “challenges” as put by the parliamentary briefing expert, Leepo Tsoai.

The Financial and Fiscal Commission (FFC) was reported as having noted in a report which went to the cabinet that the increases in the human settlements budget are not linked to increases in delivery on the ground, a fact which had been the responsibility of the outgoing minister.

Not straightforward

The FFC had also noted that the effectiveness of the many human settlements grants to municipalities, over and above standard appropriations, were diverse and “segmented” and there was a serious need for “alignment and sequencing”.

Also the Auditor General, although having given an unqualified report on DHS for the 2012/3 figures and again for this year, a note was added by the AG that the vacancy rate on professional and skilled staff within the department is far too high, indicating a large vacuum where it is most needed despite funds being available.   Also far too many staff were “acting”, reported the AG, indicating that their posts remained unsubstantiated.

Lack of skilled staff was therefore one of the main reasons, said the parliamentary profiler, for the slow rate of approvals aside from the lack of skills at provincial level.

Nevertheless, the current target for DHS remained to accelerate the delivery of household opportunities and upgrading of 400 000 households in informal settlements so that there was access to secure tenure and basic services.

Back to finance problems

In this regard, DHS was also responsible for a subsidy programme for households unable to find mortgage finance or should their monthly income exceed the maximum income limit for a government free basic house.

It was noted in the parliamentary briefing, however, that many strides in terms of accelerating access to water and on sanitation matters had been made, with some 3m South Africans gaining access to adequate sanitation services since 1994, although 2.2m were still without water, bringing SA close to non-alignment with UN goals.

Also it was noted that DHS also had a target to establish a mortgage insurance guarantee scheme to deliver 600 000 housing finance opportunities.

Committee members were briefed on the two Bills passed last year; the Sectional Titles Schemes Management Bill and the Community Scheme Ombud Service Bill – the Rental Housing Amendment Bill being withdrawn but now re-introduced. In the pipeline were the Consumer Protection Measures Bill and Housing Development Property Bill.

Backlog title deeds

Insofar as the previous government was concerned, the legacy report of the last committee was reviewed which had asked for a total review of DHS funding models on projects and programmes and a way of regulating for the registration and issuing of title deeds for state subsidised houses.

Also, the legacy report stated, there was a major problem on the issue of “backyard dwellers” in urban areas to be dealt with.

As far as budget allocations were concerned the briefing showed that budget for 2013/14 was R20.2 billion, increasing in 2014/15 to R30.5 billion, with projected increases thereafter to R32.8 billion in 2015/16 and R34.4 billion in 2016/17.

At the end of the last financial year, DHS administration had under-spent 74% of budget at the end of the financial year, a major factor contributing to this the inability to fill senior management posts with the right qualifications.

At the time of this report, the committee was awaiting the annual strategy report from DHS prior to the budget vote.

Other articles in this category or as background
http://parlyreportsa.co.za//justice-constitutional/spatial-planning-bill-ends-long-journey-in-the-parliament/
http://parlyreportsa.co.za//human-settlements/sexwale-details-new-housing-loans-programme/

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NHI to focus on better nursing, says DoH

Pilot NHI facilities to get IT systems

amotsoalediAn impassioned plea in Parliament by minister of health, Aaron Motsoaledi, when presenting the strategy and annual performance plan of the department health (DoH), that nursing in South Africa should return to “the old days” was received well across party lines during a meeting of the portfolio committee on health.

He said he did not like the current system whereby nurses were trained at university, gaining all their four coloured bars in one learning process before gaining practical experience in the various disciplines. What is going to happen he said, is to encourage a heightened understanding of patient care with more bedside experience during training, This led to a round of vocal support from all parliamentarians in the newly elected committee.

Practical qualifications

Dr Motsoaledi said that many nurses with four bars on their shoulder-tabs often had less practical nursing experience than some who only had one bar, meaning that less experience in the real basics of proper nursing care was becoming prevalent.

Change was now being instituted whereby each specialist phase in knowledge attainment would be coupled with a period of field training experience to gain a bar in order to return nursing to proper holistic care principles. Nursing training was to be returned to a seven year period to incorporate periods of field experience, rather than the current crash course system of four years.

He said to MPs that it was “very difficult to send a new highly qualified nurse on bedpan duties for her first duty.”   He received a strong endorsement of the new approach from a cross spectrum of all members. He told parliamentarians that five public nursing colleges would be accredited to offer nursing qualifications under a new system in 2014/5.

NHI will meet world standards

heathpatientDr Motsoaledi detailed all eight strategic goals of DoH and referred immediately to the national health scheme, the implementation of which he said was not “if” but “when”. South Africa’s NHI would meet international standards and use internationally accepted regulations, he said, but he did not answer directly a member’s question on a date when the pilot would end.

However, he expanded on the fact that the current NHI project, a project which involves 700 public health facilities, would be the subject of new patient registration systems with IT backup and electronic health care data collection.   The revised administration systems would reduce patient waiting time, he said, and in addition a mobile phone data collection and communication system was to be introduced.

He also said it was the intention of DoH to have a functional national pricing commission in place by 2017 in order to regulate health care in the private sector.   DoH would again revise methodology and also legislate for the determination of pharmaceutical dispensing fees.

Dr Motsoaledi told the committee that an Institute of Regulatory Sciences was to be introduced and regulations for the function of an Office of Health Standards Compliance to prescribe norms and standards brought into being.

He was adamant that nearly 4,000 primary health care facilities with functional committees and district hospital boards would be in place by 2018/9 and said that 75% of all primary health care clinics in the 52 health districts would qualify for the international terminology of “ideal” by the same date.

Standards

This involved a clinic or facility passing a test based on a regimen of some 180 standards, from infection control to waiting room facilities.   He was candid enough to say that a major issue was now to control a leaning by both municipalities and local government to build new infrastructure to meet patient demand and NDP targets, rather than maintain and improve existing services which had exactly the same result.

He also wanted to see standards developed countrywide on building costs per square metre since, he complained, a building going up in one province can vary by 100% from another province.   He said DoH had little power to influence the activities of health MECs and wanted to see a list created of “non negotiable items” so that some DoH control could be exercised over municipal budgets and spend.

Overview

His discussion with parliamentarians and his briefing for new MPs roamed over a wide range of health subjects, from female contraception and cancer screening to child health and on the issue of HIV/AIDS, he focused on the need to encourage breast feeding at the expense of formula feeding.    He complained that breast feeding was as low as 8% nationally and wanted to see more, even amongst HIV positive mothers.  He gave outcome figures to support his view.

Dr Motsoaledi spent some time detailing the moves by DoH to introduce more emphasis on preventative health care and education by going to the root of the problem rather than chasing curative health targets, stating that education towards better diets had to become a part of an SA way of life.

He said that for each person who died in South Africa, eight were in hospital and that preventive health care education starting nationally at school age was the only way in his view to reduce poor health in a substantial manner.    A post of an advisor to the deputy minister of health was to be established on this subject and a White Paper on affordable heath care produced.

HIV/AIDS

red_aids_ribbon_hi-resOn the subject of HIV/AIDS, he repeated the statement which he said he had made on a number of occasions to the effect that children born to HIV positive mothers should, by law, be tested for mother-to-child transfer of the disease.   This should happen if child mortality in South Africa was to be tackled successfully, he added.   He did not discuss the constitutional issues involved.

He said the total number of people remaining on ARVs was targeted by DoH at 5.1m for the end of 2018/9, the current figure for 2014/5 being 3m. He added that some 2.4m were currently on the regimen.    DoH targets for HIV tests among the population aged between 15-19 years are targeted at 10m annually, he advised.

TB

On TB control programmes, Dr Motsoaledi said a 79% treatment would be reached for 2014/5 and this was to be targeted at 85% by 2018/9.   The TB defaulter rate was 6% presently and this was to be reduced to 5% over the same period.    He advised that there were over 400,000 TB cases recorded in correctional service facilities and a focus was now to give inmates the correct kind of increased TB and HIV diagnosis and better treatment services.

He emphasised that DoH had to ensure regular TB prevention, screening and treatment carried out by mines by enforcement of compliance regulations for approximately 600,000 miners and employees of associated industries.    He said that DoH was to “heighten” diagnosis and treatment of TB in peri-mining communities “in six districts with a high concentration of mines using DoH TB and HIV mobile units”.

Dr Motsoaledi continued that life expectancy of South Africans had to be raised by 2030 to 70 years, at present being dragged down by HIV/AIDS and TB into the ‘fifties, after having reached 60% at one point recently.

In general, however, there were more people living as well as more people living longer.   The cure rate in Western Cape and Gauteng had now reached 81% but it was slower in other areas, averaging at 74% for the country.    The national target was an 85% cure rate.

Preventable health care

However, on non-communicable diseases, Dr Motsoaledi said that the rise in hypertension numbers was “explosive” and high blood pressure problems were therefore very much part of the preventative health care plan.    5m people were targeted for counsel and screening for high blood pressure in the next four years and a further 5m for raised glucose levels.

Obesity was also a major problem and this was targeted to be reduced by 55% for women and 21% for men in the next four years. This was currently being started with school programmes. There was also a DoH programme in place reduce injury through, accidents and violence by 50% from the high levels of 2010.

Other articles in this category or as background
http://parlyreportsa.co.za//health/health-dept-winning-on-hiv-aids-therapy-and-tb/
http://parlyreportsa.co.za//uncategorized/competition-commission-promises-health-care-inquiry/
http://parlyreportsa.co.za//uncategorized/state-acknowledges-responsibility-to-increase-health-staff/

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Small business gets R1bn incentive scheme

Tax relief and business incentives

The new small business development department (SBDD) has transferred from the department of trade and industry (DTI) the R1bn fund which covers both corporate incentives to develop small business and the Small  Enterprise Finance Agency (SEFA).

However, it will leave with DTI all matters relating to B-BBEE insofar as regulations are concerned.  Both the new minister, Lindiwe Zulu, and deputy minister, Elizabeth Thabethe, were present for a short departmental briefing by SBDD given to the new small business portfolio committee chaired by Ruth Bengu, who in the last parliamentary period served as chair of the transport committee.

Revised thinking

In an earlier portfolio committee meeting of trade and industry, a few days before under their chair, experienced ANC member Joan Fubbs, DTI had called for a rethink on small business policy.

They said they wanted to see a clearer policy on the SMME support role by national government with provincial and local government and to establish a programme for rolling out more small business “incubators”- something that opposition parties had been calling for over a long period of time.

Also DTI supported the call to review the small claims court system so that access to affordable justice was more affordable. They wanted this to be a further target of the new department.

Such recommendations came amidst a foray of criticism by commentators that the new department could become a diversion for unsolvable small business issues or alternatively the new department could become merely a point for start-up small business without any real muscle.

Less red tape

The new department in addressing MPs confirmed to them that its mandate was to focus on “enhanced business support” and they emphasised their support for women, people with disabilities and to provide mechanisms to access finance, business skills development.  They also said they were there to ease regulatory conditions; to help regulate better the SMME environment and to give leverage on public procurement.

It was important to recognise, SBDD said, that it was also there to encourage the development of cooperative entities, in which instance shareholders themselves were the members and entrepreneurs. Finally, the process of creating market access was an important task, they added. Nothing was new here.

But opposition ears pricked up when they said tax relief grants to corporates that invested in small business development were to be considered and incubation programmes and technology upliftment were priorities.  The immediate future, however, was all about configuring the new department; the “migration” of responsibilities from DTI; and transferring allocations for the establishment of support institutions.

Chair of the committee, Ruth Bhengu – previously chair of the parliamentary transport committee – then called for response from opposition members which mainly came from Toby Chance of the DA, whose questions were answered by both by the new minister and deputy minister.

Jobs or not

Chance said that whilst applauding the formation of this department, he wanted to know whether or not any success was to be measured in terms of jobs created,  which to him was the bottom line, he said. Also he wanted a clearer definition of what government actually meant by the term “small business”.

He said there were plenty of “gleaming new supermarkets in our townships but very little industrial developments, in fact some industrial parks were in a state of decay.” Chance said the DA was also worried that the impact of new labour legislation and labour regulations was immobilising small business and the amount of red tape currently being experienced was becoming “out of hand”.

Chance said he hoped the new department recognised the fact that that corporates and industry should focus on the development of small businesses to create the job growth called for by the NDP.   Partnerships with small business were the best way of achieving this, he noted.  He concluded that all “tax incentives should be re-visited” and that more emphasis should be laid on small manufacturing businesses.

In reply, minister Lindiwe Zulu agreed on the issue of red tape as a hindrance to small business and said her objective was to become like Rwanda where direct contact with national bodies that supported initiatives was far easier.

Compliance for all

However, she said that business had to understand that it had a role to play and a “culture of compliance” had to be encouraged in both small and large business and manufacturers or there would be anarchy.   Also large businesses and the state will have pay small business invoices on thirty days or risk penalties.

The minister said on the subject of labour regulations, dept of labour had its own targets and own agenda on decent work conditions and that was a separate issue. “The job of small business development was to work inside current conditions and for business to respect that.”

Chance replied that the governing party seemed to have “developed a track record of “attacking business persons when they criticised ANC economic policies or asked tough questions”, which statement prompted vehement denials from the minister and deputy minister.

Other articles in this category or as background
http://parlyreportsa.co.za//trade-industry/licensing-of-businesses-bill-re-emerges/
http://parlyreportsa.co.za//bee/minister-davies-gets-cooperatives-bill-approved/
http://parlyreportsa.co.za//parlyreport-contacts/cabinet-ministers/ministry-small-business-development/

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Budget vote passed just in time

Committeemeeting smallMajor learning curve for new MPs….

Probably the most difficult parliamentary rule to explain to the new influx of MPs who have become members of the fifth Parliament is the time honoured and important fact that whilst they may debate and even disagree with various facets of the budget vote appropriations now passed by Parliament, they could not change the sums involved.

That is because the Appropriations Bill, which passes the money raised by taxes and from banks to the various government entities, is a money Bill.

All such money Bills emanate from national treasury and are tabled by the minister of finance.   In terms of section 77 of the Constitution, such are Bills that Parliament cannot alter by amendment, whereas with all other Bills they can exercise by majority vote any changes.

Three types of  Bill

The majority of proposed legislation that comes before Parliament is in the form of a Section 75 Bill, legislation that will make its way to the National Assembly (NA) for a final vote, the “concurrence” of the National Council of Provinces (NCOP) only being sought during its parliamentary passage. These can be altered by Parliament and Parliament usually holds its own public hearings on such Bills.

The remaining but small balance of Bills, which are quite often of greater importance and interest to the general public, are “tagged” as section 76 Bills. This is because they affect provincial and local administration and constitutionally must go before each provincial legislature to obtain a simple majority for amendment, rejection or approval from the nine provinces. Public hearings occur right down the line accordingly.

Hence, the argument over the Mineral and Petroleum Resources Development Amendment Bill and the e-tolling issue, both of which have both described by opposition members as Bills passed unconstitutionally because, in their view, the subject matter was not purely “national” but involved provincial legislation, taxes and provincial citizens.   In other words, they maintain the Bills were incorrectly “tagged” as Section 75.

No money amendments

But back to the very different section 77 money Bills which are introduced direct to the NA by the minister of finance. Why, ask new MPs, should we sit debating the budget vote in portfolio committees when we cannot change the Bill?

The reason goes to the whole root of the parliamentary process and why the Appropriations Bill, as the first Bill that a new crop of MPs has to deal with, forms the basis in the learning curve of why they are there at all.

This is because this is where the process of financial oversight starts.

When the budget vote comes before Parliament, each department, headed by the minister involved, also comes before the relevant portfolio committee and explains what they will be doing with their allocation of the total budget for the current year, their objectives and targets.    This commitment is accompanied by a five year strategy plan for the particular department.

The annual cycle of accountability has therefore started and this is why it is so important that director-general posts are substantiated and not filled by those “acting”. These processes are explained to MPs during their training of two weeks now completed.

Final stages

Following the budget presentations by each government department to each portfolio committee in the NA (and select committee in the NCOP), the Appropriations Bill then goes to a joint sitting in the NA, all MPs from both Houses being present and each minister, with a speech on intent, targets (with, hopefully, some indication of any legislation that ministry intends tabling) the budget vote is then proposed in the knowledge that it will indeed be passed.

Numbers, targets and objectives have therefore all been vocalised and minuted as a result and now the financial facts and objectives are “set in concrete” with all present.  Failure or success can be measured.

As a matter of fact, this process is usually the first interface between a new MP and the government department to which the MP has been allocated, which is also an important part of the democratic and oversight process.    In the case of the budget vote it is, in essence, for most MPs a financial initiation.

By coming before the committee, consequently, the director general of each department is also committed both on policy and in monetary terms.  Each cabinet minister is subsequently asked to sign a presidential delivery contract which, in public service terms, is followed up upon by the department of performance, monitoring and evaluation – part of the Presidency.

Marker put down

However, none of this is so important as the parliamentary monitoring process itself, which both enables all political parties to “grill” under performing departments during the year; debate legislation supporting policy and also, importantly, to provide a transparent window during the oversight process to both media and monitors, who exercise their constitutional right to observe such meetings but with no speaking role.

Other money Bills involve taxation matters, which are specifically dealt with by the portfolio committee on finance, and a special report submitted to the NA. An example of this would be the budget proposals in April.

It is this long and somewhat complicated process that protects us all – emanating from one of the better constitutions in the world.      And long may we be so protected.

Ends

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Gas Utilisation Master Plan gets things going

Gas a “game changer” in energy mix…

gas pipelineWith the publication for comment of the Gas Utilisation Master Plan (Gump) by the department of energy (DoE), South Africa came a step further towards the finalisation of its Integrated Energy Plan (IEP), meaning also that the document has received approval by the cabinet.

The document, based on a Green Paper released by DOE some years ago, provides a framework for investment in gas-supporting infrastructure and outlines the role that gas could conceivably play in the electricity, transport, domestic, commercial and industrial sectors.

LNG and gas, offshore -onshore

The Gump outlines, amongst other issues,  the import of liquified natural gas (LNG) and piped gas from Namibia and Mozambique and plans for production of natural and shale gas in South Africa.  A plan to have 67 GW of installed gas generation by 2050 is considered by the paper.
The plan is particularly relevant at the moment with Eskom having to rely, as grid backup during the current winter, on expensive diesel-fueled open-cycle gas turbines. The Gump proposals on electricity generation, talk of conversion to closed-cycle turbine power using gas.

The paper also expands on importing electricity from gas sourced from Mozambique and Namibia with lines to the Eskom system grid including imports from the largest present and mainly undeveloped gas fields in Tanzania neighbouring the northern Mozambique fields.

Learning curve

New minister of energy, Tina Joemat-Pettersson, will have deepen her knowledge base very quickly on such matters as the IEP, energy resources and liquid fuels plans, all urgent and with immediacy.   Such issues as the process of energy integration overall and the issue of the stalled independent power producers (IPP) programme in terms of the held-over Independent System Market Operators (ISMO) Bill, are also waiting for position on the energy starting track.

DoE has also pointed to its intended coal gas programme with an IPP programme for the generation of some 6,500MW of power. The department further states that the Gump takes a 30-year view of the industry. It not only deals, they say, with the regulatory environment and economic predictions but does touch on social issues and environmental matters as well.

The master plan also talks of a gas line from Mozambique to Gauteng via Richards Bay and how gas will be distributed and stored, together with the issue of LNG terminal storage.

As a separate issue to Gump but part of the same overall plan, DOE has also released public comment the issue of investment by private merchants in fuel and gas storage, particularly referring to Saldanha Bay.

Storage, a vexed issue

Fuel storage at the present moment is traditionally undertaken by the major oil companies, in some cases integrated with state facilities and who can more easily absorb some of the more riskier aspects of this sector with their vertical interests both upstream and downstream.

DoE sees a greater contribution from investment by private merchants in storage and is currently attempting to re-structure the system to attract and build the industry to counter present storage problems and for early consideration as part of South Africa’s strategic fuels plan and as part of a licensing and regulation background.

In the short term, DoE says in its Gump programme, such a system is needed in terms of LNG holding reserves, imported as LNG or from state owned PetroSA’s gas-to-liquids plant at Mossel Bay, until more natural gas comes down the envisaged pipelines from the current exploration areas.

At the moment Sasol pipes 188-million gigajoules a year of gas into South Africa from Mozambique.  The possibility of LNG re-gasification plants offshore on the West coast in the near future is also debated in the Gump programme released.

Other articles in this category or as background
http://parlyreportsa.co.za//energy/parliament-re-starts-oilsea-gas-debate/
http://parlyreportsa.co.za//energy/shale-gas-exploration-gets-underway/
http://parlyreportsa.co.za//energy/oil-and-gas-industry-criticizes-minerals-petroleum-bill/
http://parlyreportsa.co.za//energy/future-clearer-as-gas-amendment-bill/

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Protected Disclosures Act: More whistleblower cover

Act to cover workers and state employees…

whistleblowerWhat was expected has now arrived in the form of an amending Bill to the Protected Disclosures Act, or “Whistleblowers Act”, which will draw contract workers, independent contractors, consultants and agencies into the ambit of the legislation, as well as state employees and employers.

The draft is for public comment until mid July, such being called for by the proposers, the ministry of justice and correctional services.

In the first case, the term “independent contractors” will embrace protection for contract workers in terms of the Act together with the already described basic terminology of “employees”.   Secondly, the proposals clearly identify state employees who are working, or who have worked, for government and state utilities.

Much strengthening of the Act to protect whistleblowers is evident, including a procedure for disclosing unlawful behaviour in the workplace by both private and public sector employees and how such disclosure is to be protected.

Civil and criminal liability

The draft bill proposes that whistleblowing employees can approach the courts for relief in the face of detrimental behaviour shown towards them by employers and that they will be immune from civil and criminal liability flowing from a disclosure that reveals criminal activity. Also, the disclosure of false information by whistleblowers is to be regarded as an offence.

As a separate issue, the Bill now places upon the employer a responsibility to set up appropriate procedures for dealing with disclosures and to inform all employees and workers about such. Also there is a duty to investigate any protected disclosure. President Zuma alluded to these whistle blower safeguards in his State of Nation Address.

If occupational is proven in a court of law, then employers will then be liable for “detriment or victimisation befalling an employee” and there will exist a liability for compensation and/or damages to the employee or worker, the draft states.

Employee safeguards

The kinds of “occupational detriment” from which the whistleblower is protected is also described, such as being subjected to any disciplinary action; being dismissed, suspended, demoted, harassed or intimidated; being transferred against his or her will; being refused transfer or promotion; being subjected to a term or condition of employment or retirement which is altered, or kept altered, to his or her disadvantage; and being refused a reference, or given an adverse reference.

At the same time, the proposals define more clearly the “irregularities” described by the anchor Act to which whistle blowing can apply, these now being defined as criminal offences; failure to comply with legal obligations; miscarriages of justice; the endangerment of the health or safety of individuals; damage to the environment; and unfair discrimination.
Other articles in this category or as background
http://parlyreportsa.co.za//cabinetpresidential/logjam-has-to-be-broken-over-halted-state-information-bill/

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SA to get coastal management underway

Coastal management includes cities and rural areas …

South Africa’s National Coastal Management Programme (NCMP) is now underway with the publication of working proposals by the department of environmental affairs (DEA) which was accompanied by a call for public comment.

The estimated contribution of coastal resources to the South African economy is in the order of some R5bn and coastal zones, the document says, are estimated to provide approximately 35% of the country’s GDP.   The major coastal cities of Cape Town, Port Elizabeth, East London, Durban, and Richards Bay are affected, all four having experienced the fastest economic growth of all cities in the country.

Preservation and good management of the national coastal areas, says DEAT, is therefore essential if South Africa is to continue to provide the roots for economic development, expansion of the tourism industry and the continued provision of recreational needs.   All these factors are created in areas with a very delicate balance of biodiversity, says DEAT.

Economic reasons

Maintaining this balance into future generations is seen by DEAT as one of its major challenges, not only for environmental reasons but for economic reasons as well. A further important objective of the NCMP is to maintain the coastal environment to the benefit of threatened poorer communities and to protect their livelihoods.
DEAT says in its forward to the NCMP that South Africa has chosen to embrace a holistic approach, known as integrated coastal management (ICM), which sets out objectives, management procedures and contains the kind of definitions, norms and standards that enable a basic environmental regulatory process to happen.

The purpose of the anchor ICM Act is to maximize on the eco-benefits provided by coastal zones and to minimize the conflicts and harmful effects of human activities upon each other, both in terms of resources that could be lost and any surrounding environmental damage.

Pointers only

The NCMP, DEAT says, is a working document to assist in implementing ICM objectives and lays out in its 106 pages a deliberate programme of national management actions. It is not regulatory but a working guide.

First, it contains a detailed situation analysis related to coastal management in South Africa across the full spectrum of zones within the country’s 3,000 kms of coastline. Then the document looks at the current threats to ecosystems followed by a study of existing localised and national environmental management programmes.

In providing a “national vision”, the NCMP provides a structured approach to engage with the stakeholders, DEAT says, and “a template for future cooperative governance”.   It also suggests ways to integrate ICM programmes with localised government, the NCMP therefore expanding with practical programmes based on the ICM Act.

However, DEAT makes it clear in a disclaimer that what is published is neither an amending Bill nor a legal or regulatory process but a guide to programmes which are seen by DEAT as the route to take and which can be necessary in the common interest.

Complimentary to NEMA

To emphasise the co-operative nature of what is put forward, DEAT says in the frontispiece to the NCMP, “This document does not in any way have legal authority or take precedence over the National Environmental Management: Integrated Coastal Management Act but rather serves as a guideline to the development of coastal management programmes, expanding on the provisions of the Act”.

Public input on this plan is therefore called for by DEAT. Comment can be made until the end of June.

Concurrently, DEAT has also published its White Paper on National Management of the Ocean, the acronym for which is appropriately NEMO.

This, DEAT says, aims to promote the protection and conservation of South Africa’s ocean environment, as well as promoting sustainable development for present and future generations. It refers in its pages to the extent of South Africa’s ocean environment and deals with issues concerning protection and conservation of the ocean environment and resources of the sea.

The White Paper says the department’s approach to the subject will promote and expand sustainable development and optimise investment in managing the large ocean space which is accessible to the country.
Other articles in this category or as background
http://parlyreportsa.co.za//energy/fueloilrenewables/coastal-management-bill-stirs-waters/
http://parlyreportsa.co.za//health/coastal-environment-proposals-getting-clearer/

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Mineral and Petroleum Resources Bill halted perhaps

Mineral and Petroleum Act extends State rights…

New MPRDA starts with 20% free carry, maybe more….

oil rigThe Mineral and Petroleum Resources Development Amendment Bill, the legislation that will give the state a right to a 20% free carried interest in all new exploration and production rights in the energy field, has been passed by Parliament before it closed and sent to President Zuma for assent. According to press reports, new minister of mineral resources, Ngoako Ramatlhodi, may have halted the process by request, however, in the light of public sentiment and opposition moves to challenge the Bill’s legality.

Section 3(4) of the Mineral and Petroleum Resources Development Act (MPRDA) currently states that the amount of royalty payable to the State must be determined and levied by the Minister of Finance in terms of an Act of Parliament. This Act, in force, is the Mineral and Petroleum Resources Royalty Act 28 of 2008 but considerable uncertainty always surrounded how this would work and what was actually meant.

Any uncertainty has now been removed and the MPRDA amendments now passed have brought to an end a process which started when the draft Bill was first published for comment in December 2012.

Beneficiation of minerals included

mine dumpThe legislation seeks to “regulate the exploitation of associated minerals” and make provision for the implementation of an approved beneficiation strategy through which strategic minerals can be processed locally for a higher value – the exact definition of the word “beneficiation” yet having to be defined.

Importantly, the new Act will give clear definitions of designated minerals; free carried interest; historic residue stockpiles; a mine gate price; production sharing agreements; security of supply and state participation generally.

Stockpiles and residues affected

The new Act also states that regulations will apply to all historic residue stockpiles both inside and outside their mining areas and residue deposits currently not regulated belong to the owners. Ownership status will remain for two years after the promulgation of the bill.

In addition to the right to a 20% free carried interest on all new projects, ownership by the state can be expanded via an agreed price or production sharing agreements.

The NCOP concurred with Bill on its passage through Parliament and made no changes.

Legal commentators note that the Royalty Act, at present in force, triggers payment in terms of the MPRDA upon “transfer”, this being defined as the consumption, theft, destruction or loss of a mineral resource other than by way of flaring or other liberation into the atmosphere during exploration or production.

The Royalty Act differentiates between refined and unrefined mineral resources as “beneficiation”, this being seen as being important to the economy; incentives being that refined minerals are subject to a slightly lower royalty rate.

Coal and  gas targeted maybe

Nevertheless it appears, commentators note, that in terms of mineral resources coal is being targeted and also zeroed in on is state participation in petroleum licences. Others have pointed to the possible wish of government to have a state owned petroleum entity such as PetroSA to be involved fracking exploration.

Earlier versions of the Bill entitled the State to a free carried interest of 20% and a further participation interest of 30%, with the total State interest capped at 50%; however, the version that Parliament approved removed the reference to a 30% participation interest as well as the limit of 50%, effectively giving the State the right to take over an existing petroleum operation, law firm Bowman Gilfillan explained in a media release earlier this month.

Democratic Alliance (DA) Shadow Minister of Mineral Resources, James Lorimer said in a statement that the Act, “would leave the South African economy in a shambles”, adding that this would lead to people losing their jobs.

The DA has said it has now begun a process to petition President Zuma, in terms of Section 79 of the Constitution, to send this Bill back to the National Assembly for reconsideration,” he said.

Chamber opinion differs

Surprisingly, the Chamber of Mines stated that it “generally welcomed and supported” the approval of the MPRDA Amendment Bill, adding that it believed significant progress had been made in addressing the mining industry’s concerns with the first draft of the Bill, published back in December 2012.

Clearly the mining and petroleum industries particularly gas exploration industries, both of whom have separate equity BEE charters, are still very much at odds on the effects of the promulgation of such an Act, as is DA and the ANC.

Other articles in this category or as background

http://parlyreportsa.co.za//bee/mprda-bill-causes-contention-parliament/

http://parlyreportsa.co.za//bee/major-objections-minerals-and-petroleum-resources-bill/

Posted in BEE, cabinet, Energy, Facebook and Twitter, Fuel,oil,renewables, Justice, constitutional, LinkedIn, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

UIF brings in foreign workers

Changes to Unemployment Insurance Act with new Bill….

Nearly thirty changes are proposed to the Unemployment Insurance Act, governing the Unemployment Insurance Fund (UIF) in the form of the Unemployment Insurance Amendment Bill now tabled. Among other things, the Bill will qualify foreign workers for unemployment insurance benefits, as well as employees with learnership contracts.

In fact it is not quite clear whether Cabinet has approved the Bill for tabling in Parliament, no cabinet statement to this effect having been issued but the portfolio committee on labour has been briefed on the subject just before Parliament was closed.

It was stated that the Bill had been endorsed by Nedlac without any substantive amendments.

Aims of the Bill

The preamble to the Bill, which has not been debated, provides for “unemployment insurance benefits to learners who are undergoing learnership training and civil servants; to empower the Unemployment Insurance Board to provide in its constitution for the functions of regional appeals committees; to finance employment services and to adjust the accrual rate of a contributor’s entitlement to unemployment insurance benefits.”

On accrual issues, the proposed amendment will change the maximum accrual of 238 days to 365 days in a four year period. This will extend the period of payment of an unemployed contributor from eight months to twelve months. Beneficiaries will also accrue one day’s benefit for every four days of employment as a contributor.

 Payment period extended

The proposed amendment will change the maximum accrual of 238 days to 365 days in a four year period. This will extend the period of payment of an unemployed contributor from eight months to twelve months.    Beneficiaries will also accrue one day’s benefit for every four days of employment as a contributor.

The Bill also makes it quite clear that funds raised through the UIF process, other than money required to meet the current expenditure of the fund, must be deposited on behalf of the Fund with the Public Investment Corporation Ltd (PICC).

LegalBrief comment

Says LegalBrief, “The amendment will improve benefits from 38% – 60% to 45% – 65% in the various brackets. The amendment will also enable the minister to change or vary both minimum income replacement rate and the maximum income replacement rate without having to go to Parliament.”

“The present position is that the minister can vary the minimum income replacement rate only. Once the amendment becomes law the minister will simply use a regulation to vary either the minimum or maximum or both.”

A copy of the Bill as tabled in Parliament is available on the department’s website.
Previous articles in this subject
http://parlyreportsa.co.za//labour/labour-relations-act-changes-passed/

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

DOE spells out biofuels and biomass

Biomass, biofuels and jobs……

On the subject of creating biofuels and biomass, the department of energy told parliamentarians that the main objective of any such exercise, if it was undertaken in the agriculture industry, would be to create jobs.       However, such a move towards the use of biomass would not take place if national food or water security was jeapordised in any way.

This answer was given to the portfolio committee on energy by Muzi Mkhize, chief director hydrocarbons, department of energy (DOE), when briefing parliamentarians on DOE’s current strategy towards biofuels.  He said that in the South African context, a specific requirement of the biofuels strategy was to create a link between first and second economies and the focus was not only on jobs but specifically on creating employment in under-developed areas.

Key incentives

Bio-fuels, he said, like most renewables, required incentives in order to be cost-competitive against conventional fuels, the upside of such a direction being the saving in balance of payments, energy supply security and economic growth factors that were more stable that the volatile traditional oil market.

He referred to 2006 estimates, where a targeted 2% biofuels scenario was estimated to create about 25,000 jobs.

With the IPP third round completed, Mkhize said biofuels would contribute to the national renewable energy policy, the director general, DOE, having already advised that 93 independent power producers (IPPs) had applied for licences in the third round of requests for submissions. Thus biomass, he said, together with IPPs were contributing greatly towards targets that South Africa had in the journey to reduce greenhouse gas emissions.

As far as biofuels manufacturing facilities were concerned, Mkhize listed eight locations where bioethanol or biodiesel had or were being licensed. He said that biodiesel would fall within the fuel tax net and manufacturers would receive a rebate of 50%. Bioethanol would not, however.

Incentives upgrade

As was the case with all renewable energy projects, a 50:30:20 depreciation allowance on capital investment over three years would apply but DOE had started discussions which were underway to improve incentives as this was not sufficient to attract investors, it was felt.

“Infant industry” incentives over a twenty-year benchmark period were being looked at, he said, with an initial incentive of 3.5c per litre to 4c, to be recovered through a levy to be included in the national monthly price determinations.

Overproduction threat

It was pointed out by parliamentarians that about 229 million litres of fuel were sold annually for about R9,2bn and if all players in the fuel industry joined the process as required, there would be an excess with about 4-6% of biofuels produced over the national call for 2%. Who would take up the excess, they asked.

Mkhize was also asked what agro studies had been done and how were farmers responding to a possible call for biomass crops. Also, they asked, if there was drought or some similar disaster, what would happen to the fuel industry in the reverse case of a shortage of biomass.

Mkhize said there was a general agreement in place only on agricultural biomass and this was “only in the form of mindset until pricing and subsidy issues were finalised, so accordingly the question of national quantities in relation to fuel company needs did not arise”.  However, he confirmed that the fuel industry would not be allowed to suffer from a shortage of biomass delivered.

Treasury and subsidies

In answer to more questions, Mkhize said a licence to produce biomass would not disallow a farmer from switching crops, say from soya to maize.  But, he added, all this was total speculation until “national treasury came up with the answers on subsidies”.

When MPs complained that the picture given by DOE “was no more than a snapshot of where we were on biofuels exactly one year ago”, Mkhize said he was trying to show the milestones that had been reached in the enormously difficult stage that the fuels industry had reached with regard to the entry of biofuels, which was a strategic issue.

Gas the issue

He said there were issues such as LPG remaining the forerunner of natural gas to be investigated as this household market had to expand and added, “We are looking at the system used commercially of bringing gas from Mozambique to Durban and whether this is the basis for further development.”

Mkhize promised his department would deliver shortly on promises to deliver DOE’s plan for gas expansion but this was not part of the biofuels or biomass study. All such matters were intertwined in terms of the integrated resources plan with the eventual integrated energy plan for the whole country.

Making a profit

On new entrants to biomass to fuel production, Mkhize responded to questions that it had been shown that the breakeven point for any biomass plant was a constantly changing factor over a long period and it was difficult to establish at what point a subsidy of, say, 2% would assist.

He said breakeven studies showed from a 2% profit, moving down to 5% loss for a long while, and then eventually moving up to 10% profit had been the standard established and banks did not like that kind of venture. Models he said were difficult to establish that were both profitable in either the short or long term.

There had been great disappointment when oilcake made from soya had proven too costly for biodiesel and it had been found that better recoveries could made through the food industry. This had proved a setback, Mkhize said.

Sugar cane

In answer to queries on sugar cane possibilities for biomass, as practised in Brazil and possible land shortages in South Africa, Mkhize said that the SA Sugar Assoc had said that land was available but that sugar cane was more likely to be linked to co-generation of electricity energy. Brazil, he said, had a vast subsidized lower income biomass agricultural industry but was producing on a large scale for biodiesel, not bioethanol as would be required in SA.

Mkhize concluded that the DOE biofuels task team was studying very carefully the forward national food security and water situation, “because”, he said, “we cannot afford to subsidize an industry in the form of small scale farmers if we are at the same time threatening food security and water availability at the same time.”

Back to jobs

However, he said that the country at the moment could not ignore the huge potential for job creation that could be brought about by such a new industry and the present lack of agricultural knowledge on the subject would eventually be substituted by experience gained by the new entrants as they established themselves.

In answer to questions on where blending would take place and “whether this was upstream or downstream in the fuel industry”, meaning at refineries or at depots it was assumed, Mkhize said a lot would depend on where the crop was grown; the wish to support crops grown in rural areas; sustainable projects that had been developed; and water availability.

previous articles on this subject
http://parlyreportsa.co.za//cabinetpresidential/biofuels-development-stays-in-limbo/
http://parlyreportsa.co.za//energy/south-africa-at-energy-crossroadsdoe-speaks-out/
http://parlyreportsa.co.za//energy/ipp-3-delayed-until-mid-august-says-doe/

Posted in Energy, Facebook and Twitter, Land,Agriculture, LinkedIn, Trade & Industry0 Comments

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