Archive | Special Recent Posts

ANC MPs face to face with reality

….SA on world stage for Parliamentary opening

….editorial 27 January…

Who is going to be doing what in the ANC as Parliament re-opens for the first session of 2018 is far from clear as the party cogitates over leadership factors.    However, the vessel, the SS Rainbow Nation, may have righted itself and could commence the long and difficult voyage to economic recovery, although the vessel could well be said to be currently in damage control mode.   But at last the glass is half full, not half empty.

For the next few weeks, all eyes will be on Parliament.  The Bard could not have put it better.   “All the world’s a stage: all have their exits and their entrances…”, to paraphrase a little.

Patience called for

Those who feel that injustices have taken place and people must go to jail will just simply have to wait and learn to control the anger and frustration in the coming weeks as we learn of further exposés indicating the real depth of the corruption and mismanagement during the Zuma era.  The wound has been lanced but it took far too long for the doctor to arrive and apply a dressing.

In the meanwhile, somehow, South Africans are going to have to put this ten year period of atrocious governance behind and just simply get on with the job.. The endless denials of who did what to whom and whose hands are clean will go on for a very long time.  Replays of past speeches which are totally contrary to current statements will be the order of the day and prepare for brazen lies about how so many people all miraculously got to stay at the Oberoi Hotel in Dubai, for example.

They told us so

AmaBhungane and Daily Maverick told us about the Vrede Dairy Project theft of R220m as long ago as June 2017, the scam set up by still current Minister Mosebenzi Zwane and ANC Secretary General Ace Magashule, then Free State Premier, and contemptuously planned as a siphon for personal financial gain.   It was almost tiring to see the whole story splurged again in the weekend press. The “I am innocent until proven guilty” answers from Minister Zwana were equally as absurd.

Consequently, for the last six months, it has also been most difficult to watch Zwane strutting about in parliamentary portfolio committee meetings in the confident manner that is his hallmark busily destroying half of the mining industry on behalf of the Guptas knowing that all around him knew what he was up to.

Fortunately, partner Ace Magashule appears rarely Parliament. His time may come, however, once his position at Luthuli House is clarified.

Failure of disciplines

Under Jacob Zuma, the habit of state “fruitless and wasteful” expenditure has become endemic ever since the example had been set by the top with Nkandla. This was probably the first awful display of arrogance in the face of overwhelming knowledge of the truth. Now with Eskom debacle included, we know that that the total of money stolen in the Zuma era is around R700bn. This is according to the Institute of Internal Auditors.

If the “fruitless and wasteful” aspect of bad governance are added to this already frightful figure, then whomsoever said “Every nation gets the Government they deserve” is right, meaning of course that if Parliament and the Auditor General fail in oversight of government expenditure then all are poorer for not having applied consequences.  A private member’s Bill, recently tabled in Parliament to give the AG more teeth, is most welcome.

How low can it get?

If the Sunday press coverage of the Vrede dairy swindle was not enough,  once again we had to watch, with no satisfaction we might add, this same sickening story of corruption and greed repeated by a TV announcer standing outside a sliding gate and a wall located in the back and beyond of the Free State with a few building structures in the distance.  The total sum of assets still technically belonging to the Department of Agriculture from their project from which the R220m had been blatantly diverted.

As had been told to us six months before by Amabhungane and by Jacques Pauw,  Minister Zwane’s son who works for the Gupta family, was the recipient of a good slice of this money.   Even the President’s son is deeply involved as a beneficiary.   One turns one’s head away in shame. All in the name of a few cows and a group of hapless indigent farmers. A line which should not have been crossed.

Parliament is the people

What has been learnt is that Parliament is the people’s place of refuge. That is all we have, however ineffectual it may seem at times.  The proof of this is in the pudding. That creaky old system invented centuries ago won the day and in the end the people spoke. Parliamentary enquiries, whilst not courts of law and cannot judge, have produced the questions which leave the ordinary person, “the people”, to judge for themselves.

It seems pretty common cause, therefore, that  “people say”  that President Jacob Zuma should no longer be allowed to occupy Tuinhuis with a whopping salary and a rather large home and family.  The “people” were supported, brilliantly, by a strong civic voice and whistleblowers who have not benefited.

The stage is set and the play will end where it started.  In  the people’s Parliament.

Fresh start

Time now to forget the past. We must start again. It would be good to rise above the obsession to see these partners in crime and state capture go to jail. The systems, it appears, are back in place to ensure whether this happens or not.

Revenge is not the issue, however. The job in hand is to get on speedily repairing the damage. One remembers with warmth the leadership style, vision and courage endowed to us all by Nelson Rolihlahla Mandela, who asked us to rise above the sins of apartheid and focus only upon building a country. Many feel the time has come for the ANC to repeat the exercise.

A long road

Africa is indeed rising again and for the first time, in a long time, we can look forward to newscasts that don’t leave one feeling helpless, as has been the case ever since the Gupta e-mails emerged. In the few days after Cyril Ramaphosa returns from Davos (with whatever title he may have assumed by then) parliamentary business can return to normal.

All eyes in the next few weeks will focus upon the State of Nation Address and the Budget. Why exactly is the glass half full and not half empty? Because the governing party has been given a chance to put things right. Their endeavours to do so will be for all to see on the stage called Parliament.

Previous editorials
Parliamentary start to 2018 will be stormy – ParlyReportSA
Parliament SA: the top half of the iceberg.. – ParlyReportSA

Posted in Special Recent Posts0 Comments

Parliamentary start to 2018 will be stormy

….Cabinet changes on the way

…. editorial...After having endured so many of President Jacob Zuma’s cabinet reshuffles, most of them in his own interests, it is painful to think that in all probability there is still one more shuffle to go. The focus for business and industry now falls upon the parliamentary portfolios of public enterprises, energy, mineral resources, communications, state welfare, land reform and trade and industry.

In past shuffles, the regular passing of the hat has allowed minister after minister to side-step the truth and report to Parliament on a “it wasn’t me” basis.  It has been the bane of Zuma’s presidency and in many cases the cover up for wholesale corruption and the ineptitude of some of those anointed.

When the music stops…

So, it is with trepidation that Parliament awaits another round of new ministerial faces which will probably coincide with a new round of appointments of chairperson of committees, let alone some new faces in the benches. This is all at a time when the economy sits at tipping point and President Zuma still retains powers to appoint cabinet ministers but is unlikely to against the wishes of the new ANC president, Cyril Ramaphosa.

But everything is changing on a day to day basis.   On the opening of Parliament the immediate business to be dealt with is the status of the current Presidency.  Parliamentary Speaker of the House, Baleka Mbete, has been instructed by the judiciary to fulfill her constitutional mandate to establish consequences for President Zuma on the Nkandla affair in terms of an action brought by the EFF.  But even whether the current President will make it to Parliament remains in doubt.

Baleka Mbete remains therefore the person to watch in coming weeks as much as Cyril Ramaphosa

Avoiding the crunch

In all likelihood Deputy President and now President of the ANC, Cyril Ramaphosa, and his party executive, the NEC, will avoid the road to impeachment at all costs.  But one never knows with President Zuma.  For example, the Higher Education announcement came like a bolt of the blue from the Presidency, a callous call made by Zuma leading to a departmental debacle and a financial conundrum for the Minister of Finance.

Once again, the parliamentary telephone directory will be at the mercy of ever-changing power battles within the governing party and which somehow represents the country-wide breakdown in communications across of whole section of the governance and political spectrum.  This sadly occurs every time cabinet portfolios get switched around en bloc.

Musical chairs….

This waiting period for new faces is similar to the usual vacuum before an election. In this case, however, the small but important difference is that the ordinary Joe has no say in outcome. In an election, one sees a manifesto of beliefs, values, policies and an appeal to the electorate.  In this case it is a choice between more of the same, less of the same, or if unity wins, how many compromises there will be and how many appointments are determined by political expediency.

To put it simply, we shall learn soon who will be picking up each of the cards in the ministerial cabinet pack and who will be contributing to the promotion of nearly fifty pieces of legislation in Parliament awaiting attention.

Wasteful expenditure

The current power battle within the ANC will tell us, for example, who will be finalising a stalled and messed up Minerals and Petroleum Resources Amendment Bill; a confused Border Management Authority Bill; a Land Reform Programme from Rural Affairs that has got muddled up with an Expropriation Bill from Public Works; a Communications Bill that has totally shaken the confidence of its industry sector and a Management Shareholding Bill for SOEs that is now tainted with violations of the Public Finance Management Act (PMFA).

Policy matters are also confused.  Moves towards land reform without compensation; 5-year  free higher education plans; nuclear “expansion”, oil and gas dreams and state health schemes have all been expounded upon by President Zuma’s previous allies when trying to gain the higher ground in policy making. The picture is as confused for Cabinet as much as Parliament and the public.

Spiral of outrage

Meanwhile, in another Parliament on 6 December, Lord Peter Hain, when introducing a UK Money Laundering  Amendment Bill, said to the British House of Lords, “My Lords, in recent weeks I have again been stunned by the systemic transnational financial crime network facilitated by an Indian-South African family the Gupta’s and the presidential Zuma family.”

This watershed statement was not  missed by the international banking world and which has brought the country to the point where it was learnt that the FBI are around the corner and the UK’s Serious Fraud Unit are also on the trail.

2017  was also a year in which civil society responded from the public platform, joining OUTA and Corruption Watch and others in their lonely battle to expose the truth.   AmaBhungane started the ball rolling and with the Gupta emails and Jacques Pauw’s The President’s Keepers adding momentum, all learnt during the rocky road of last year that Parliament is a situation as much as an institution. There is constant movement. Every day is different.

Down to work

2018 sees the genie out of the lamp  but Parliament will initially remain the battleground, the courts having emphasised the separation of powers and scolding Parliament and the Speaker for not doing their jobs.

As shadow minister of public enterprises, Natasha Mazzone (DA), amusingly shouted to state capture adherents during the Eskom Inquiry, it is now time in the new parliamentary session for those either in default of parliamentary rules or who challenge the norms of the PMFA  to “bring it on.”

 

Previous editorial http://parlyreportsa.co.za/earlier-editorials/cabinet-paralyisis-times-need/

 

 

Posted in Cabinet,Presidential, Communications, Energy, Health, Justice, constitutional, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Marine Spatial Bill targets ocean resources…

Bill to bring order to marine economy…

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

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

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

Water kingdom

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

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

International liaison

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

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

Invasion protection

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

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

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

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

Tug of war

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

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

Local calls

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

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

Big opportunities

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

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

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

Environmental focus

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

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

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

Moves afoot

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

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

Opposition

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

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

Giants enter

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

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

Impetus gaining

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

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

Ground rules

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

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

Not so nice

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

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

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

Something happening

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

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

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

Coming your way

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

Previous articles on category subject

Operation Phakisa to develop merchant shipping – ParlyReportSA

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

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

Gas undoubtedly on energy back burner – ParlyReportSA

 

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

Parliament set for tough questioning

Editorial…

…..Busy session to get some answers

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

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

Party vs the Church

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

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

Take that

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

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

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

Cry, the beloved country

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

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

Ignored

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

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

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

Looking ahead

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

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

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

Energy up and down

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

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

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

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

Untouched as usual

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

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

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

Posted in cabinet, Communications, earlier editorials, Electricity, Energy, Finance, economic, Fuel,oil,renewables, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Parliament embroiled in state capture

State capture emerges as a fact  …

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

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

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

Hundreds of meetings

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

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

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

Standing out

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

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

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

To the rescue

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

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

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

In the engine room

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

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

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

Top heavy

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

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

Train smash

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

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

No court of law

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

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

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

Camera shy

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

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

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

Looking back: 2nd session

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

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

D-day

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

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

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

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

 

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

Posted in cabinet, Cabinet,Presidential, Energy, Finance, economic, LinkedIn, Mining, beneficiation, Public utilities, Security,police,defence, Special Recent Posts, Trade & Industry0 Comments

Parliament may see delays on Mining Bill

Mining and petroleum bill to hit snags

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

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

Free lunches

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

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

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

First things first

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

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

Last in queue

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

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

Next process

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

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

Possible slow down

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

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

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

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

Looking ahead

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

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

Two is not one

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

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

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

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

Damaging delays 

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

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

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

Next stages

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

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

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

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

Cybercrime and Cybersecurity Bill invokes suspicion

Cybercrime Bill stated as invasive

…sent to clients 28 Jan…   A new law to assist in enforcing South Africa’s fight against cybercrime, hacking and unlawful interception of data is about to be tabled in Parliament. As expected, the proposals are not without considerable misgivings in the private sector and involve claims that the state may have designs upon the control of free speech and/or are intent upon the control or manipulation of cyberspace.

The draft Cybercrime and Cybersecurity Bill (C&C Bill) has now been approved by Cabinet, the draft having been published for comment as far back as September 2015.  Industry players are deeply involved and the next platform for their involvement moves to the actual wording of the document that will form the basis for regulations.

Agents for the state

The legislation states that the proposals are designed to give powers to the State Security, Defence, Police and Telecommunications Ministers, which powers will not only extend into many aspects of South Africa’s key economic, financial and labour environments but will impose responsibilities on service providers.

The Bill clearly states it will call upon the private sector for compliance into order to meet its objectives and will also change the way the public service goes about its business to reflect the call for security.  Cross hairs are to zero in on the criminalisation of cyber-facilitated offenses including circulation of messages aimed at economic harm, contain pornography or could cause mental or psychological harm.

Parliamentary stage

The next stage of public sector involvement will be extensive parliamentary hearings, no doubt involving joint portfolio committees, to cover the many aspects involved.  Also to allow for further submissions on deep concerns in the private sector regarding compliance and intrusion of free speech rights.

The long and quite complicated process of drafting such legislation has been undertaken by the Department of Justice and Constitutional Development.  It is stated that the proposals are of an umbrella approach towards legislation already in the ambit of the new Bill, the objective of which is to extend any new regulations over a wide range of business endeavours and activities “in the public interest”.

Long history

The process started at a point in the cybercrime history log which seems a century ago.  A government gazette articulated what was necessary. “I, Mbangiseni David Mahlobo, Minister of State Security, hereby publish the National Cybersecurity Policy Framework as approved by Cabinet in March 2012 for public information.”

The long journey has finally resulted in a 130-page draft which firstly creates offences, prescribes penalties and regulates for powers to investigate, gain access, search and seize items. It gives such powers to the South African Police Service (SAPS) and the State Security Agency (SSA).

Future structures

The Bill then proposes that structurally the Minister of Police establish both a National Cybercrime Centre and appoint a director in charge – a person currently serving with the SSA – and similarly appoint such a director in charge for a “point of contact centre” for cybercrime activity, outreach and contact.

Monitoring all structures will be a Cyber Response Committee (CRC) made up of 13 experienced persons chaired by the DG, Dept. of State Security.

Any interventions at this level will be, by nature of the vastly changing business environment and the global challenge of the subject matter of the Bill, “which will form the critical point of balance between the forces of state control and public endeavour”.

Ground troops

Initially, the Minister of State Security is to appoint a director in charge of a proposed Cyber Security Centre, such person also serving with SSA and for the Minister to establish Government Security Incident Response teams, also appointing a person from the State Security Agency as the head of each specialised investigating team.

Finally, on structures, the Minister of Defence is to establish and operate a Cyber Command and appoint a General Officer Commanding.

Furthermore, provision in the Bill is made for the Minister of Telecommunications and Postal Services to establish and operate a Cyber Security Hub and appoint a director of same. It is in this area that assumedly the main interface between private and public sectors will take place.

Key points

An example of a database to be protected is given in the Bill as the Home Affairs database and the mandate for dealing with cybercrime clearly includes the fact that foreign states and South Africa will be co-operating to investigate possible offences.

Also, powers are granted to the President who may enter agreements with foreign states to promote cybersecurity. The proposals make it quite clear that international crime fighting and the local protection of cyberspace are to be woven together. This will involve changes to the anchor Electronic Communications and Transactions Act, particularly where the Act deals with attempts to deal with abuse of information systems.

The nitty gritty

Where the C&C Bill ventures into the private sector there will no doubt be, and certainly has been to date, plenty of debate.  The Bill as proposed, broadly and perhaps too grandly, allows for the imposition of obligations on electronic communications service providers (ECSPs) and financial institutions in respect of aspects “which may impact on cybersecurity”.

The difference between obligations and compliance seems a fine line but already the Dept. of Telecommunications has set up a website on https://www.cybersecurityhub.gov.za/ to try and clarify issues.

At what point?

The general obligations of ECSPs are a set out in the draft bill but an obligation is proposed that as soon as a ECSP “becomes aware of an offence being committed on its network”, the matter must be declared to the National Cybercrime Centre.

The offences are enumerated in the Bill but it is possible that clarity is required, according to stakeholders who have voiced opinions so far, as to who decides at and at what level the retention of a suspicion becomes an offence or to restate the problem, at what point does a suspicion become a reportable fact.

Proposed offences include unlawful interception of data; unlawful access, personal information and financial information-related offences; unlawful acts in respect of software or hardware tools; unlawful acts in respect of malware; unlawful acquisition, possession, provision, receipt or use of passwords, access codes or similar data or devices; computer-related fraud and computer-related extortion.

Extensive powers

Most focus on the fact that the Bill’s clause 58 gives the State Security Minister powers to determine what should be included in a “national critical information infrastructure”.

The Bill goes on to state that should it “appear” to the Minister that any information presented is of such “strategic nature” that any interferences, loss, damage, immobilisation or disruption which may result in prejudice to the “security, defence, law enforcement or international relations of South Africa; or prejudice the health and safety of the public; interfere or disrupt any essential service’, then the Minister may implement the powers granted by the Bill.

The “Apple” problem

Broadly speaking, also included is any malevolent act which “causes any major economic loss, destabilises the economy of South Africa or creates any form of public emergency’’ with the proviso that the organisation must “at its own cost take steps to the satisfaction of the Cabinet minister” to comply with a state request.

Any “affected organisation may be given the right to be afforded an opportunity to make representation” but, to repeat, players in the industry note that a great amount of responsibility has been delegated without clear definitions of what is reportable.

The background

The seriousness of the Bill and the recognition that cybercrime must be dealt with firmly is measured by the background given to the Bill.    It is estimated that cyber-related offences currently exceed a value of more than R1bn annually. This is escalating at speed, the Department of Justice states.

In general terms, one of the tasks of the Cybercrime Centre is stated in the revised draft as informing all of cybercrime trends and creating an environment which enables parties to report cybercrime without being suspected of whistle-blowing with the accompanying commercial disadvantages.

In other words, the fear with the original draft expressed by the Right2Know campaign that the draconian powers of seizure worried many in the IT industry and that lack of protection for whistle blowers was out of kilter with free speech requirements, may have to some extent been responded to.

Heavy hand of the law

Still, fines of up to R10m and/or 10 years’ imprisonment are involved following a guilty verdict for unlawfully accessing or intercepting “a national critical information infrastructure” involving “critical data”, which makes for a tricky scenario for ECSPs handling traffic and journalists handling information.

This is in the light that an ECSP could be liable on conviction to a fine of R10 000 for each day on which such failure to comply with disclosure requirements continues, it was noted.    To be specific, some fifty offences are detailed in the areas of data, messages, computers, and networks.

This is serious talk.   Whilst national cybersecurity needs are recognised as paramount, as the latest draft explains, the extent of state powers in the hands of uncontrolled and misdirected state effort gives concern to many in the ECSP business community, particularly in the light of the public nature of the internet.

No warrantless searches

On the other hand, whilst the C&C Bill gives SAPS and SSA extensive powers to investigate, search, access and seize assets wherever they might be located, the search powers granted are not emanating from the proposed Bill.

Search powers are only possible provided the search entity has a search warrant granted in the normal way, the department says.  SSA will be purely looking, they say, for data that has a feature of malevolence and commits crime in terms of the need to protect the State and its citizens.

At a briefing for the media, the Justice and Constitutional Development Department in Pretoria Deputy Minister of Justice and Constitutional Development, John Jeffery, gave a further assurance that what is about to arrive in Cape Town “will not give any powers to the State Security Agency (SSA) to control the internet or spy on local users”.

Criminal data

The search and seizure powers granted in terms of the latest draft of the C&C Bill around the interception of data “do not represent increasing the state’s surveillance powers”, the Minister said.

“As part of the final draft of the bill, it says that to prove an offence in a court of law, data must be seized as evidential material.  If the State cannot seize evidential material to adduce as evidence, it is impossible to prove the guilt of an accused person. “

The criminal procedure act is currently used to investigate cybercrimes, Minister Jeffery said, and to this end the Regulation of Interception of Communications and Provision of Communication-Related Information Act (RICA) “are already in the tool box”.

Anchor still RICA

The C&C Bill is merely extending the RICA from that aspect, he said, which already has basic general principles in place to protect persons against unlawful interception of communications. “There is thus no extension of the so-called ‘surveillance powers’ of the State”, he added.

He confirmed that previous versions of the Bill, whilst stating a person who fell foul on the issue of state information that was classified as secret could go to jail for 10 years without the possibility of a fine, now, the final draft of the Bill acknowledges that journalists and whistle-blowers have protection under the Protected Disclosures Act.

Minister Jeffrey said was satisfied that the C&C Bill, now headed towards its final shape, gives the State the tools to halt crime and bring those who used data as a tool of crime to book.

 Defining data

He concluded, “Data is merely a means to commit offences such as fraud, damage of programmes and computer systems, extortion, forgery and uttering. It can also be used to commit murder by remotely switching of a respiratory system or terrorism by overloading the centrifuges of a nuclear station or remotely opening the sluices of a dam which causes large scale flooding.”

Much of what will come up in the parliamentary hearings of submissions will most likely involve the space occupied by the ECSPs and their responsibilities as perceived by the State. Furthermore, the role to be played by any business institution using large amounts of data needs to be clarified as far as areas of compliance are concerned.

Previous articles on category subject

Draft Cybercrime Bill drafts industry – ParlyReportSA

South Africa on international cybersecurity – ParlyReportSA

Broadband allocation could involve SABC – ParlyReportSA

Posted in Communications, LinkedIn, Security,police,defence, Special Recent Posts, Trade & Industry0 Comments

Credit regulations to squeeze racketeers

Debt relief and credit under microscope

… sent to clients 22 Dec 2016…. Further powers for the National Credit Regulator to regulate against reckless lending have been reaffirmed as necessary and the subject of debt relief for needy persons considered.

This conclusion was the result of a series of hearings conducted by Parliament and criteria are to be developed for the application of debt relief measures and how this could be achieved are now being studied.

Such criteria could include target groups of debtors who would be eligible for the relief; the period in which the measure would apply; the type of debt that would be covered and how the measure could be implemented.

An earlier study, commissioned by the National Credit Regulator (NCR) some months ago, concluded that there was a need for the National Credit Act to make provision for the introduction of some form of national debt relief but the NCR decided to consult Parliament and to involve public input.

Growing debt bubble

Whilst reckless lending and irresponsible borrowing which led to the disastrous housing bubble in the US, Joanna Fubbs, as chairperson of the Portfolio Committee on Trade and Industry, acknowledged that the situation regarding any retail debt bubble is not as bad in SA.   Nevertheless, she said that for some time she has been concerned that the National Credit Amendment Act is not working in the best interests of vulnerable groups.

On the issue of debt relief, whether from reckless lending or not, it was agreed some time ago by the Committee that it was important for stakeholders to be consulted to establish a better picture.  A parliamentary select committee, chaired by MP Eddie Makue of the same Committee, was formed to investigate whether debt relief would be an acceptable policy for SA and to organise parliamentary hearings focusing on banking input and debt control aspects.

The brief

The Portfolio Committee also recommended to this subcommittee that there needed to be a better understanding between the excesses of lending, the plight of borrowers and a view established on regulations which should refrain from fostering any culture of not paying debt in the hope that it might be written off.

Meanwhile, it has been proposed by the Department of Trade and Industry (DTI) to extend the powers of the National Credit Regulator to conduct proactive investigations into reckless lending . They would also be asked to impose administrative fines and to empower the Minister to provide debt relief mechanisms through further regulations, yet to be drafted.

Also, NCR submitted that it had already laid out its own proposals to tighten up existing regulations and penalties for perpetrators of reckless lending which the Regulator was currently entitled to enforce under the Act but the views of the Regulator were to be sought on debt relief by Makue’s Committee.

DTI view

DTI has since confirmed to this Select Committee that it was their view was that the Minister of Trade and Industry, Rob Davies, should be given the power to prescribe debt relief measures, the nature of which must be carefully thought through . At the time, DTI acknowledged that banks and credit providers had to make their views known preferably in a series of hearings now conducted.

NCR view

National Credit Regulator, Nomsa Motshegare, has confirmed to the Select Committee that in their view some form of debt relief is necessary given the reasons of the country’s slow economic growth; retrenchments that were taking place; and rising unemployment figures.

In general, she said, these factors had already diminished household income and led to difficulty for consumers to repay loans.   The NCR had found, they said, that there was a willingness in general amongst banks to find ways to relieve the financial burden of indebted clients, many of them stating that they did this already, but there was considerable doubt on whether this should or could be backed up by any enforcement measures and regulations.

 The banks

In this regard, during further public hearings, Cas Coovadia of the Banking Association of SA (BASA) emphasised that legislated debt relief for all would have negative consequences since this was far too prescriptive. He  called for “a customised debt relief approach that would suite various portfolios” as a better principle to follow.

At the outset of the discussions, Coovadia stated that BASA did not support the principle of debt forgiveness as an objective.  One of the banking system’s foundation principles, he said, was the need to efficiently and legally lend money to borrowers and to collect repayments from borrowers to settle the loans.

He told parliamentarians. “A confluence of pricing, regardless of individual consumer risk, will arise at a portfolio level to offset the inability to price for the risk.    This will mean that consumers who have a good repayment history will no longer be rewarded for such behaviour when they apply for further credit.”

He warned that blanket debt forgiveness would accelerate irresponsible borrowing and said all banks offered means to repay and gauged the circumstances when lending.   Any failure to perform on this principle would have severe consequences for the industry and economy; would increase risk to depositors/savers; would impose a cost on society; and would limit credit providers’ ability to extend credit, he said.

Making a plan

Nedbank said that the option of rehabilitation was always a preferred course rather than hard legal collections and the bank had recently adopted a philosophy in general banking terms that to become proactive in terms of debt relief solutions was the far better solution for those who had over-extended themselves.

They said the situation between credit provider and consumers should remain “mutually beneficial”, which principle bore in mind that the economy of the country was less affected.   Nedbank confirmed that a satisfactory low, in their view, of 4.6% of their clients could be classified as technically in total default without the any possibility of rescue, as at the end of 2015.

Too prescriptive

Individual banks, such as Standard Bank, Absa, First Rand, Capitec and African Bank generally supported BASA’s view that prescriptive laws or regulations regarding lending, collection and debt relief would remove the principle of case by case treatment which in turn, they said, would probably inhibit loans being granted or drive up their cost

Debt and labour

Chamber of Mines was blunter and took the view that employee over-indebtedness was a major problem in labour relations and “fed into unrealistic wage demand” scenarios.  Indebtedness, they said, was one of the major catalysts in recent mining unrest.

They were clear that education on family accounts and the implications of over borrowing had to be stepped up, rather than complicated prescriptive measures on relief that would favour one and not the other.  More important they said was that loan sharks should brought under control and whose malpractices were rife amongst the mine working community.

Ms Sue Fritz, speaking for the Chamber, said that any form of debt relief provisions must consider the danger of undermining the basic principle that with the ability to borrow came the understanding such debt had to be repaid or quality lending would cease and debt might increase.

Cosatu view

Cosatu’s Matthew Parks urged that some form of debt relief be provided to a defined base of categories, such as retrenched workers; those only on social grants; the poor; working-class and middle-class students with student loans and borrowers who had paid off a large part of a loan but fallen on hard times. He also appealed to parliamentarians that there was a need to crack down on loan sharks, formal and informal.

Paul Slot, speaking as president of the Debt Counsellors Association, said some form of debt relief was necessary to counter the current high level of household debt, noting that according to the association, 54% of those in financial trouble simply applied for more debt to extricate themselves.

Conclusions in process

The Select Committee has now made a call upon on the National Credit Regulator to tighten regulations further on loan sharks and the registration process.  Chairperson Eddie Makue has now reported back on the hearings to the Portfolio Committee but has noted in Parliament that he was deeply concerned that a large amount of vulnerable people remain exposed to unregulated credit and can become victims purely because of greed alone on the part of the lender.

On reckless lending, it was noted that often ridiculously high repayments from the poor were a weapon used to gain control of assets.    Makue said, “The NCR has to protect poor South Africans against such lending by unregistered and immoral micro-lenders.   In most rural and semi-urban areas people maintain their existence through borrowing and the interest they sometimes get charged is shocking, and interest rates should be capped by law”, Makue said.

State debt relief and debt relief regulations

The “jury is still out” therefore for 2016 on the issue of DTI tabling a Bill and the subject of debt relief generally.

Parliament closed 7 December and will resume this debate early in 2017

 Previous articles on category subject

National Credit Act Bill aims to help consumers – ParlyReport

Treasury proposals on debt control approved – ParlyReportSA

National Credit Amendment Bill changes – ParlyReportSA

 

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

Medicinal use of cannabis makes progress

Medical Innovation Bill and cannabis

..sent to clients 18 Dec… Dr Narend Singh who took over the tabling of the Private Members’ Medical Innovation Bill from the late Dr Mario Ambrosini, said that he was so impressed by the progress of the Department of Health (DHA) in their support of the use of cannabis for medical purposes that he could see the possibility arising where he could withdraw his Members’ Bill in favour of broader legislation tabled by the Minister of Health.

He said “there was light at the end of the tunnel” and he himself was on a “high” to learn from Dr Joey Gouws, in charge of regulatory and legislative enforcement at DHA, that regulations on the growing of cannabis, manufacture, dispensing and medical use for medicinal purposes could be in place by the end of 2017 including registration processes and classification systems.

Holistic approach

Dr Gouws was briefing the Parliamentary Portfolio on Health on progress towards the commencement of such a programme and which not only covered the medical use of cannabis as proposed in the Medical Innovation Bill but covered research, registration, manufacture and the scheduling of substances.    Separate legislation would be in parallel amending such Acts as the Drugs and Drugs Trafficking Act.

Regulations were a draft form stage in authorising permits for use by practitioners, analysts, researchers or veterinarians.      In fact, said the DHA team presenting the update to parliamentarians, it might be possible to see certain herbal products with limited THC levels available within three months.

 Worldwide

Dr Gouws said that in the United Kingdom similar legislation, to be enacted, provided for innovation in medical treatment and allowed medical doctors to depart from medical treatments for a condition but the UK Bill did not specially address the use of cannabis. In South Africa, it will be allowed for under specific prescribed conditions for the treatment of certain medical conditions and for education, research and analysis.  Similar legislation in Australia and Canada had been studied.

Patients that are proposed for eligibility are those with severe pain, nausea, vomiting or wasting arising from cancer and HIV/AIDS, including treatment. Muscle spasms and severe pain associated with multiple sclerosis and seizures from epilepsy where other treatment options have failed or have intolerable side effects. Severe chronic pain is included as part of the proposals for indications.

Crop trials completed

The Department of Agriculture, the DHA team said, has justMedicines Control South Africa forwarded the outcome of cultivation trials at four agricultural research facilities jointly overseen by both departments. This would now be disseminated and assessed, which results would form part of the ongoing research by the Medical Research Council and other academic research centres involved in the future clinical use of cannabis.

Currently, cannabis is listed as a Schedule 7 prohibited substance but regulations will shift this towards Schedules 3-6 which are prescription-only medicines with authorised prescribers.   Scheduling decisions involve levels of toxicity and safety; the proposed indication for a substance; the need for medical diagnosis before prescribing; the potential for dependence, abuse and misuse and access disciplines.

Certain cannabis products are prescribed at present but unregulated illegal herbal cannabis, Dr Gouws said, which is grown incorrectly and bought from the black market will have unknown concentrations of THC’s and cannabinoid concentrations combined with potentially harmful ingredients.   Cannabinoid drugs currently used are Dronabinal for loss of appetite during severe illnesses, Nabilone for nausea under similar conditions and Sativex for spasticity.

Conditions of use

If legalised, it will be proposed that objective evidence to support the proposed use of cannabinoids in whatever regulated form must be provided; the manner and duration of treatment provided; a patient must be monitored to ensure efficacy; the treatment outcome reported upon; the physician involved must be a specialist and informed consent by the patient or legal representative obtained.

In questioning the DHA, parliamentarians were particularly concerned that appropriate measures amending the Drugs and Drugs Trafficking Act, the criminal Procedure Act and the Medicines and Related Substances Act were undertaken. One MP remarked that there must be no question of unintended consequences with law enforcement processes in order that criminal procedures under certain circumstances involving cultivation, marketing, administering and research can be clearly separated and easily understood by the South African Police Service.

Dr Joey Gouws said that this matter had already been investigated and the issues involved were with the State Law Advisor at this very moment. It appeared that they were satisfied. The framework for medical use and research had also been submitted, which also included the licensing of growers using controlled cultivation methods for medical, scientific and research purposes. There were various cultivars of cannabis which had different medicinal properties, she said.

Quality controls

The framework being worked to by DHA also includes reaching a standardised, quality assured product for medical use indications, bearing in mind that clinical decision-making in terms of Section 22A(9)(ii) and Section 21 of the Medicines Act must be made to the scheduling of products, Dr Gouws said.

For a while, Dr Joey Gouws said, cannabis as a medicinal drug for pain may remain as a Section 21 drug as things exist until all regulations were in place and registration and classification complete, so that the use could have a controlled start.  Herbal classifications may be allowed far earlier.

ends

 

Posted in Facebook and Twitter, Health, Justice, constitutional, Land,Agriculture, LinkedIn, Security,police,defence, Special Recent Posts0 Comments

Hide and seek over R14.5bn Ikhwezi loss

Facts on Ikhwezi loss held back

…sent to clients 12 Dec… In the first of several meetings of the Portfolio Committee on Energy regarding Central Energy Fund’s Ikhwezi Project, chairperson Fikile Majola has agreed with ANC MPs and Opposition members to reject the Department of Energy (DOE) report on the PetroSA impairment or write-off amounting to R14.5bn.  Continue Reading

Posted in Energy, Finance, economic, Fuel,oil,renewables, LinkedIn, Public utilities, Special Recent Posts, Trade & Industry0 Comments

Liquor licensing may have impractible conditions

DTI gets tough with age limits

...sent to clients 17 Oct…..   In what will be a tough ask, Minister of Trade and Industry, Robliqour-store Davies has proposed a number of changes to the National Liquor Act, the most contentious being to raise the legal minimum age for purchasing liquor from 18 to 21 years of age. The call for public comment on the draft National Liquor Amendment Bill as gazetted closed on 30 October.

The Department and Trade and Industry (DTI), who deal with liquor licensing at a national level, state that South Africa has globally the worst figures for alcohol related accidents and anti-social incidents involving liquor abuse.

Drastic steps had to be taken to gain control of alcohol related injuries, illnesses and abusive behaviour that were costing the state some R40bn a year, the Minister said.

Younger age groups

The Bill focuses specifically on youth since DTI maintains that alcohol abuse specifically damages the development of the brain making youth vulnerable. Liquor advertising aimed specifically at young persons will be prohibited under the Act and revised rules set down on broadcast times and content. Advertising billboards aimed at youth will be banned from high density urban areas.

Minister Davies called for “robust public engagement on the issues raised in the Bill” as it dealt with matters “that are of significance to South African society.” He noted that South Africans consume alcohol related products at double the world average rate.

On the question of the age threshold proposed in the draft Bill is a minimum purchasing age, not as has been widely reported a “minimum drinking age”. The onus of establishing age will fall upon the supplier who must take “reasonable steps to establish age” when dealing with a young purchaser.

Pressure point

A civil liability will now fall upon the manufacturers and suppliers as well who knowingly breach the new regulations, Minister Davies said, believing that this was the only way to get the problem understood and the new rules adhered to.

sab-youth-beer-adThe draft Bill states that responsibility will also fall upon the seller not only not to supply liquor to a person visibly under the influence of alcohol but that the seller could be in addition asked to show reason why they should not bear costs for damage incurred as a result of a subsequent accident involving that person who made the purchase.

On the problem of community issues, such as tackling foetal alcohol syndrome which is considerably worse in South Africa than elsewhere in the world and alcohol related crime, the onus of proof will shift not only to a supplier but also to manufacturers to show that reasonable steps were taken to ensure that liquor is not sold to illegal or unlicensed outlets. Which brings up the issue of liquor licences.

Distance from community

Licensing is a provincial matter and there are a number of changes that the amending Bill police-raidwill make to the anchor Act which will have to be abided by. Particularly notable is the proposal that licences cannot be granted to an outlet less than 500 metres from any school, recreation facilities and places of worship.

Provinces are stated as “having an obligation” to be far stricter in granting licences in highly urbanised areas, giving due regard for the need for stricter business hours and for the need to deal with noise pollution in stressful living conditions.

Previous articles on category subject
New health regulations in place soon: DoH – ParlyReportSA
Licensing of Businesses Bill re-emerges – ParlyReportSA
Medicines Bill : focus on foodstuffs – ParlyReportSA

Posted in Justice, constitutional, Security,police,defence, Special Recent Posts, Trade & Industry, Transport0 Comments

Communal Property Bill assists land reform

Reform assisted on communal property 

communal-land-4…sent to clients 21 Oct….The tabling of the Communal Property Associations Amendment Bill could represent a major advance in bringing order to many aspects of government’s land reform policy. In essence, the Bill will ensure that householders have security of tenure and thus have the ability to raise capital before they enter into any agreement on the management of communal land.

The new Bill focuses on developing the practical and legal aspects of ownership of communal land by a communal property association (CPA) whilst at the same time providing security of tenure with a new initial procedure of naming householders to benefit. The draft has now been approved by Cabinet.

Whilst the thrust of government policy on land reform has always been to bring ownership ofland-reform self-sustaining agricultural land to previously disadvantaged communities, the process has been much bedeviled by conflict over land falling under the control of traditional chiefs; the inability of small farmers to raise finance without title and, most important, for households able to enjoy security of tenure.

Communal confusion

An unintended consequence of the original CPA programme launched by government has been that government has not wished to involve itself, nor has any investing entity for that matter, in the community strife and argument over communal land, a feature of many CPAs. Consequently, the CPA system has demonstrated its inability to involve itself in loans, any state support, or receive the support of agricultural assistance programmes.

community-farmIt might be said that CPAs as a structural system is “off the banking radar”, a fact which MPs in parliamentary committee meetings have complained of a number of times.

As a result, expensive trusts have become the order of the day, banks preferring to deal with such entities and even government itself having to use them because of the informality of a CPA and the inability of loan applicant to show security.

The objective of the Act when it was signed into law was to create a new form of juristic person to allow disadvantaged communities to acquire, hold and manage property in common. A community that qualifies in terms of the Act can therefore, on the basis of agreement contained in a written constitution, form a legal entity (the CPA) and thereby become owners of property, including land, via the CPA.

Agricultural reform

A CPA as it currently stands allows its members to become owners of land which has been “prioritised for the provision of infrastructural support to land reform farmers to enable them to create sustainable jobs and alleviate poverty.”

However, over the few years since CPAs were established, it appears from parliamentary Lesedi traditionalportfolio committee meetings, that things have not gone well. In some cases, traditional chiefs had intervened and gained control of land previously under the aegis of the members of a CPA. Meanwhile, traditional chiefs had complained that CPAs were acting like “chiefdoms” in themselves, the department told parliamentarians.

Tweaking and compromising

Some attempts were made by the Department of Rural Development and Land Reform to persuade CPA members to appoint traditional chiefs on an “ex-officio basis” but the situation remained untenable, not necessarily just because of the problem of traditional control but because, due to shortage of staff, they said, had no ability to monitor the situation and no picture of what land was under CPA control, where CPAs were, and their needs.

In addition, no measurement of outcome of any schemes appeared possible, Opposition members complained. Quite clearly, they said, the NDP land reform programme has not been successful to date. Whilst the idea had been along the right tracks, it seemed the system was patently in trouble.

Green Paper study

After two years of investigation, in 2014 the Ministry, produced a Green Paper on the subject. After creating communal property ownership rights, the new proposal in the Paper was to secure individual tenure to each household beforehand, be it a farm-dweller or tenant, and for each household to own its rights at law before the CPA was formed to lock into this.

land-reform-5As per the Act in force, it would be possible for a community or group of persons to have access to a registered title to land through common or joint ownership with every name included (in a deed of transfer) or through a trust (with title vesting in the trustees) or a juristic person (with title vesting in that legal entity). Once registered, the CPA would become a juristic person – that can sue and be sued. It could acquire rights and incur obligations in its own name, in accordance with a CPA constitution.

In a policy statement, a Bill was proposed along these lines with a CPA constitution as before dealing with sub-divisions, servitudes, the right to encumber with a mortgage, deal with leases and settle disputes – all essential to the development of the area concerned but in respect of nominated persons giving those persons therefore security of ownership.

The bigger picture

The new Bill therefore speaks to a process to align a CPA to the broader land reform mandate in terms of the policy statement. The Bill also says a Communal Propertyland-claims-court Associations Office is to be established which is headed by a Registrar of Communal Property Associations. As a result, CPAs will be better equipped, it is felt, to take part in development; its status is recognised and is known to government; and has a secure system of tenure established as a base for ownership.

DHA said the plan was to clearly establish the connection between the land itself and those who live on it and depend on it for agricultural income. With more clearly established security and a need to register for compliance, it is hoped that a CPA structure will present a more viable face to the investing world.
Previous articles on category subject
New approach to land reform – ParlyReportSA
Restitution of Land Rights Act reversed – ParlyReportSA
Land Holdings Bill joins state acquisition trend – ParlyReportSA

Posted in human settlements, Justice, constitutional, Land,Agriculture, LinkedIn, Special Recent Posts0 Comments

Foreign assets amnesty Bill underway

Timing of window period resolved as 30 June

…..sent to clients 15 Sept…  The Standing Committee on Finance has now behind it the call for comment on a revised draft Rates and Monetaryfinancial-darwin Amounts and Amendment of Revenue Laws Bill which proposes a Special Voluntary Disclosure Programme (SVDP) for financial amnesty  in respect of offshore assets and income.     The process is therefore well underway for the introduction or tabling of the final Bill from Treasury.

The draft Bill was coupled with a second draft for comment, the Draft Rates and Monetary Amounts and Amendment of Revenue Laws (Administration) Bill, which handles implementation of the amnesty. 

gordhan2The original proposals were made by Treasury in June of this year following the statement made by Minister Pravin Gordhan in the 2016 National Budget. The idea is to again encourage non-compliant tax-payers to voluntarily disclose offshore assets and income, with a window period of opportunity to do this bearing in mind that the global standard for automatic exchange of information between tax payers is coming into force in 2017.

Alterations made

Changes to the original proposals are a re-definition of trusts to include those located externally; tax relief will apply to tax assessments going further back in date and undeclared amounts derived from foreign assets will apply for the financial years from March 1 2010 to Feb 28 2015, the common date for tax assessments.

Foreign assets

In the case of foreign assets, the tax applied was to be applied at 50% of the highest value of all assets offshore, the foreign currency conversion rate forsars-logo valuation being the highest Rand spot rate of the years applied for and declared.    A request to reduce this to 40% has been accepted by Minister Gordhan.       Treasury feels that anything less will cause discomfort those who have declared foreign assets correctly and have paid normal tax rates in the meanwhile.

Taxpayers who disposed of any foreign held assets prior to 1 March 2010 will also be able to apply for relief under the SVDP window, any tax to be payable in South Africa.    The application form is called the Voluntary Disclosure Application Form (VDP01) and can only be accessed via the SARS e-filing system if the current system is to be used for this particular SVDP.

More time

Financial advisors and banks have also pointed to the lengthy processes involved in filing applications, particularly where foreign asset valuations are involved and Treasury have indicated that the window period will run now from 1 October to 30 June 2017 to accommodate this.

The gazette states, “The SVDP (and the acceptance of electronic SVDP applications using the SARS e-filing platform) will commence on 1 October 2016 and will continue until 30 June 2017.    South African residents (individuals, sole proprietor, partnerships, deceased estates, insolvent estates, South African trusts, close corporations and companies) and former South African residents will be allowed to disclose their foreign assets held in contravention of the Exchange Control Regulations, 1961 (Regulations) as at 29 February 2016. Exchange control applications to the SVDP Unit are to be made pursuant to the provisions of Exchange Control Regulation 24 (Regulation 24).”

Particularly relevant is the addenda, “Please note that any party involved in a foreign exchange transaction that is currently under investigation by FinSurvmoney may not apply for administrative relief.”

From the proposals, it can be seen that R10m plus R1m a year is the maximum size of legal offshore investments that can be made by SA residents currently under the Act. This cannot be used to “offset” against any levy rendered against a disclosure, says SARS.       Corporates can still invest up to R1bn without informing the Reserve Bank.

Safe with SARS

SARS has said the average turnaround time is currently about 16 working days per case submitted.

Nothing has yet discussed in any way before the Standing Finance Committee on the issue of the Panama Papers, nor probably will it be, but the 1,700 South African names purported to be on record now with SARS from the Papers has been cited by some as a possible reason the Bill had not been tabled.

It is quite clear from the gazetted statement that no claims for amnesty are possible in general terms whilst an ongoing SARS investigation is in process.  ThisAfrica Money might disbar certain high profile cases therefore.

A final Bill is therefore now anticipated in Parliament for hearings, debate, concurrence by the NCOP and passage to the National Assembly for a vote since, presumably, nothing will happen until the Act is amended by both Bills.
Previous articles on category subject

Parliament debates three financial market and tax Bills
Budget 2016: more on amnesty – ParlyReportSA

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

Restitution of Land Rights Act reversed

Concourt says land bill “improperly” passed

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

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

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

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

More haste less speed

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

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

How it started

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

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

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

In the kitty

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

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

The whole truth

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

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

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

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

The numbers game

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

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

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

Tough words

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

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

Give it time

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

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

One way only

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

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

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

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

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

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

National Forests Bill enforces forestry control

SA forests critical to industry

…sent to clients 25  Aug…. With exports of forest products over R2bn and an industry that employs 170,000forests people, 66,000 of which are in hands-on forestry operations, the National Forests Bill now tabled in Parliament is of considerable interest.

The little known Minister of Agriculture, Forestry and Fisheries, Senzeni Zokwana, has published the draft Bill’s explanatory summary mainly to control and remedy deforestation. This will affect the eleven corporate timber companies operating in South Africa, 1,300 commercial timber farmers and an estimated 20,000 small-scale timber growers.

Sustainability

The Bill states that it will provide for the public trusteeship of the nation’s forestry resources; increase the promotion and enforcement of sustainable forest management and increase the measures to control and remedy deforestation.

woodlandsFrom what it appears, the Department of Agriculture and Fisheries (DAFF) has partially lost control over the whole forestry data collection story, particularly natural woodlands, although it acknowledges that thanks to hired consultants collecting data on the easy question of commercial forestries is where things are more up to date.

Short on facts

One of the major worries is that data on most of 25,000 small-scale timber growers’ data is not collected due to focus on major industries. Whilst intensively managed exotic tree plantations such as pine and eucalyptus (the largest) and wattle are highly regulated, with 70% production going in for pulp & paper production, as far as woodlands are concerned, mainly defined as 10% canopy cover, the areas are mainly exploited for firewood and represent some 40m hectares of natural resource not reported upon.

Last to know anything

On the commercial side where there is an established Investment value of some 1.3m hectares of plantations, wood-roofs-sawmillswhich have an annual sustainable production 20 million tons, such represents the national quoted figure for forest products of over $2bn. Nevertheless, by the time DAFF gets any figures on timber plantations, the data, it seems, is some three years out of date.

The problem is, it appears, that there is absolutely no back data on woodlands either, and trends cannot be calculated. The Bill wants to rectify this. With jobs to create and houses to build, there exists a vacuum in knowledge.

The air we breathe

Bearing in mind that no biomass inventory can therefore actually be represented in calculations for carbon trading purposes in terms of the Reduced Emission from Deforestation and Degradation (REDD) the calculations of the current carbon picture “do not have data baseline”, the Bill states. DAFF says it has a problem in that national figures must start somewhere but it seems that the baseline of what the heritage exactly is will take some time.

Looking around, about 0,5% of South Africa’s total land area is covered by natural forests and the word “natural” remains the expression when calculating figures because things look like a bit of a thumb suck. What is there, however, has to be saved and the quantity or area will define what is needed in money and effort.

Kynasa forests

It is known, for example, that there are some 1 700 indigenous tree and shrub species representing some 530 000 ha. of dense growth existing along the south and east coasts and on the southern and south-eastern slopes of inland mountains in South Africa. The other suspected half is spread over the interior plateaux in isolated valleys and ravines. This represents a somewhat scattered picture.

co-2-graphic“Catch up” is therefore called for in data form in order to start calculating the all-important figures surrounding carbon emissions. However, it appears from the emphasis on definitions in the Bill that the first step is to get control of the current mass extermination of South Africa’s woodlands, which is happening at a fast rate.

Stopping the destruction

To do this some clear definitions at law are necessary first, so it seems, and in order to take action it is necessary to amend the National Forests Acts so as to provide for what actually are “natural forests” and “woodlands” at law and to provide for public trusteeship of the nation’s forestry resources.

If land reform is on the horizon shortly, the perhaps the necessity for this Bill is therefore all the more important. Remedies and penalties for acts of deforestation are called for and it would appear that a great deal of thought has been given, by the State Law Advisor as well as DAFF, as to whether the Bill should remain as it is as a Section 75 Bill and therefore not referable to the Provinces through the NCOP or the Traditional Council of Leaders.

One gets the idea that this is a technical Bill rather than a Bill that needs emotive local participation at this stage.
Previous articles on category subject
New Air Quality Act will deal with major polluters – ParlyReportSA
Carbon offsets paper still open – ParlyReportSA
SA’s COP21 climate change paper debated – ParlyReportSA

Posted in Enviro,Water, Land,Agriculture, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Carbon tax offsets on the way

Tax offsets plan almost ready for Parliament

sent to clients 12 Aug     Only a little reminding is needed that 29 July 2016 was the deadline for comments to carbontax1Treasury on the forthcoming carbon tax offsets plan which Minister of Finance, Pravin Gordhan, has promised will come into effect 1 April 2017 with some saying it might even be as early as 1 Jan 2017.

It was in 2014 that National Treasury published the first carbon tax discussion paper for public comment. It was agreed the that such a tax would be phased in over a period of time, the first phase running up to 2020. The marginal rate was the envisaged at R120 per tonne of CO2 and during phase-one, a basic percentage based threshold of 60% will apply for tax offsets below which tax is not payable in order to assist with transition into the new scheme.

SARS as usual

Everything has been based on South Africa’s commitment to the Copenhagen agreement signed in 2009 to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025 – below the “business as usual” scenario.   The motivation provided for the tax remains as “so the cost of climate change an be reflected in the price of goods and services”.

sanedi carbon capIt was agreed that the tax would be administered by SARS.    Since that date, whilst the pro and cons of such a tax caused heated debate in some circles as to whether an introduction of a price mechanism could influence consumer and producer behaviour, the inclusion of Eskom in the tax net left many feeling somewhat helpless due to the utility’s enormity.

Eskom maybe dictates

OUTA complained that “Eskom’s various electricity tariff increases of almost three times the rate of consumer price inflation over the past eight years has become a tax of its own on society.”

They added that the electricity increase impact had resulted in fact to a reduction in electricity and energy as a result and this, which coupled with reduced production and consumption, had inadvertently caused a reduction of greenhouses gases having already taken place, OUTA said.   Of course, this remains totally unproven.

Neither Cabinet nor Treasury/SARS have replied to OUTA’s call to note “unintended consequences”.  No Treasury official it appears has felt that the Copenhagen Agreement can be dis-respected and have presumably felt that OUTA’s platform that a drop in national growth, due to global events and construction problems, has had little to do with the actual design of an overall process to cut carbon emissions over the next period of fifty years or so. The argument continues.

Quantifiable is the word

Now the first phase of the tax offsets are being set in concrete with Treasury having called for comment on theemissions final formula for the first phase of tax proposals, proposing, as before in the draft, that companies can reduce their liability for carbon tax by up to 5% or 10% of their total greenhouse gas emissions, depending on their sector, by investing in qualifying projects that result in quantifiable greenhouse-gas reductions.

Treasury says that the qualifying investments and offsets are likely to be in sectors such as agriculture, public transport, forestry or waste management and the accompanying documents note…“The proposal to use carbon offsets in conjunction with the carbon tax has been widely supported by stakeholders as a cost-effective measure to incentivise GHG emission reductions.”

How not to pay tax….offsets

“Carbon offsets involve specific projects or activities that reduce, avoid, or sequester emissions, and are developed and evaluated under specific methodologies and standards, which enable the issuance of carbon credits”, SARS concludes.

It is worth noting that tax legislation usually comes in the form of a “money” Bill which Parliament can debate butgreen scorpion not amend. Should the debate raise issues, then Parliament can address Treasury who will, according to their dictates, reconsider and change if they alone see fit.  

The general feeling seemed to be from hearings was that this event had to happen in line with other established economies, although OUTA has remained strong on its views that Eskom as a major player in the energy mix is distorting the situation.

The Treasury website has all the details of rules on which tax regulations will be based.
Previous articles on category subject
Treasury’s plan for carbon tax – ParlyReportSA
Carbon offsets paper still open – ParlyReportSA
Carbon Tax under attack from Eskom, Sasol, EIUG – ParlyReportSA
Treasury sticks to its guns on carbon tax – ParlyReportSA

Posted in Energy, Enviro,Water, Finance, economic, Fuel,oil,renewables, Mining, beneficiation, Special Recent Posts, Trade & Industry0 Comments

Government stirs on intellectual property plans

New approach to SA intellectual property 

……sent to clients Aug 1trademark logo6…. The Cabinet has agreed that a new intellectual property (IP) framework is needed and has asked that discussions commence with all stakeholders in order to set out a future IP policy for South Africa.

In 2013 the South African government released a draft IP policy which ran
into heavy weather because of ambiguities and anomalies at law. This previous attempt was rejected by Parliament.

dti-logo2Since that time, the private sector has complained of no movement from the Department of Trade and Industry (DTI) on the subject, or even the Department of Justice and Constitutional Affairs.

Hidden agendas?

Suspicions existed that a lot more was written “between the lines” by DTI in the light of a feeling that government medical authorities, including the Minister of Health and a large number of public sector entities, were favouring the case for making it easier for generics to come on to the market in view of the wish to introduce national health insurance and cheaper medicines.

copyright graphicThe law courts, always sticklers in their respect for the international word of law, favoured, it seemed, external legal international precedent as the basis for a new approach.

Discussions with DTI surrounded their attitudes and their not so transparent views on the Trade-related Aspects of Intellectual Property Rights agreement (TRIPS). However, that approach may have altered with DTI now more openly favouring Bi-lateral Trade Agreements (BITs).

Bad influence

In 2014, the whole question of IP policy became mired in controversy with a statement from a US-based lobby group based from Washington who surprised all by stating they were working with the local pharmaceutical
industry to influence the SA government and also the Department of Health (DOH) in particular in order to gain more ear to the international view. This was subsequently denied by the pharmaceutical world in SA (IPASA).

The whole matter appeared to inflame the incumbent Minister of Health, Dr Aaron Motsoaledi, who will no doubt be a key player in the new discussions.
After this the 2013 proposals seemed to fall away. Parliamentary hearings were at the time controversial, to say the least.

The major complaints boiled down to the fact that there were no time frames in the government proposals; no regulatory impact assessment had been done; and there was no appearance of a follow through of the effect of the Bill on international commercial ties.

Expert patent lawyers complained of ambiguity and lack of clarity at law.

Where it stood

After some heated debates at the time it appears that TRIPS, despite BITs copyright symboleven then being a new DTI “hobby horse”, has been respected by DTI and the generalised view accepted by most that there would be compulsory local patent registration based on a localised validity acceptance and acceptance by a localised body of all medicines dispensed. The query remained, however, on the skills available to undertake such a policy and time lags.

Whether the originally proposed patents tribunal will have final say in dispute or the High Court of SA will no doubt now be debated, as well as the critical issue of the length and duration of registered patents in a transparent manner with experts and a broad based body to represent the private sector.
As before, probably a “workshop” will be called for to air views.
Previous articles on category subject
Impasse on intellectual property rights – ParlyReportSA
Intellectual property law still in limbo – ParlyReportSA
Intellectual Property Laws Bill goes forward – ParlyReportSA
Medical and food intellectual property tackled – ParlyReportSA

Posted in Home Page Slider, Justice, constitutional, LinkedIn, Special Recent Posts, Trade & Industry0 Comments

Broadband allocation could involve SABC

ICT White Paper to set up broadband allocation…

An Integrated ICT White Paper involving broadband allocation is in its final stages of preparation involvingSiyabonga Cweley consultation with various parties, said Telecommunications and Postal Services Minister, Siyabonga Cwele, during his Budget vote speech to Parliament.  This matter is a long outstanding issue in the industry and delays are imperiling broadband development.

What has concerned Opposition members during earlier parliamentary meetings on the subject was the remark by the Minister that “Some of the delay has been the delay to allow the Department of Communications to make a contribution to the decision regarding allocation across the spectrum and how this would be applied.”

This remark must be seen in the light of the fact that the two ministries and departments were split some five years ago and the conclusion is that Minister Faith Muthambi and the SABC under it’s new and controversial head of broadcasting, Hlaudi Motsoeneng, has been drawn into the equation.

Minister Cwele also said at the time that also added that his Ministry was working with Treasury to establish a “funding model” for the broadband “roll out”, estimated at R67bn.

Spectrum policy included

In his budget speech, Minister Cwele re-affirmed that the White Paper would be supported by a new Spectrum Policy Paper in order to provide for “open or public access networks and opening up the use of high demand broadband spectrum for use by all licensees while adequately compensating those who invest in infrastructure.   All South Africans must benefit from participation in the digital society, he said.                                  ‘

Until now, there have been a number of unfortunate reasons for the holdup in broadband which have been given by government in parliamentary meetings to date. With both DTPS and Minister Cwele present at the most recent parliamentary meeting before Parliament with ICASA as the regulatory body also  present, it became quite evident  that the two were at loggerheads on the manner and method of spectrum allocation.

Different signals

Minister Cwele, during the portfolio meeting, prioritised his department’s requirement as being the need to

transform the sector to ensure meaningful Black participation when allocation takes place. ICASA meanwhile placed far less emphasis on this, preferring an allocation on an “auction” basis style whereby bidders not only name their price but declared their additional contributions to Black upliftment and general social and community development programmes, knowing this would more likely attract outside investors.

Dr. Cwele admitted at the time that “broadband allocation is perhaps the biggest regulatory bottleneck in the South African deployment of wireless technologies at the moment.”

Minister says industry “monopolistic”

In his subsequent budget vote speech he notably remarked, “Radical supply side interventions will reduce barriers to investors by moving away  from monopolistic infrastructure allowing for competition in opening access tobroadband broadband networks”.

The Minister told MPs in his speech that the White Paper will provide for “a simplified, streamlined and nationally coordinated framework to accelerate the use of networks meaning, he said, a capability to “drastically reduce the costs to operators and, down the line, to consumers.”

This issue has been plaguing the South Africa consumer market for a number of years, he added, and it was widely accepted that with the growth of cell phone usage by all income groups, he said, the present pricing cannot continue at the expense of ordinary households.

Domestic WiFi roaming

Separately, private sector operators such as Cisco have said that any such move will present mobile operators intelecommunications South Africa with a tremendous opportunity to optimize capital and operational expenditures and improve user experience.

From discussion after the Minister had spoken, it emerged also from MPs that the more mobile data offloaded makes viable alternative to mobile broadband users in crowded locations such as shopping malls where spectrum availability for present mobile access to networks is limited.   In addition, it was noted that a bigger data offload will give operators the opportunity to reduce data costs, allowing them to accelerate adoption of competitive market share opportunities. The Minister made no comment on this and it was clear that the BEE component was a ministry priority.

Crosscutting in government

HlengiweMkhizeThe Deputy Minister of Telecommunications and Posts, Hlengiwe Mkhize, followed up the Minister in her address to the committee by focusing on “discussions taking place with the labour, public service and administration and higher education and training departments to boost ICT skills.”    She also mentioned that the White Paper would map out some of the internet connectivity plans for the rural economy to stimulate growth and opportunities.

In response to both Minister’s briefings, the following day in debate Opposition members said as far as the public service use of broadband was concerned in all aspects of communications, health and education, “it was time for the discussions to stop withe other departments and for the roll out to begin.”

 MPs noted the comment that out of 46 African countries surveyed, the cheapest mobile prepaid product in South Africa is still nearly 7.5 times more expensive than the African continent’s cheapest similar product.   The South African government is one of the smallest users of broadband facilities in the world, according to Cape Town based Research ICT Africa.

 Previous articles on category subject  

Broadband allocation on its way – ParlyReportSA

Govt and Nersa differ on broadband – ParlyReportSA

Overhaul of broadband policy underway – ParlyReportSA

Parliament gets final dates for digital TV – ParlyReportSA

Posted in Communications, Facebook and Twitter, LinkedIn, Public utilities, Security,police,defence, Special Recent Posts, Trade & Industry0 Comments

This website is Archival

If you want your publications as they come from Parliament please contact ParlyReportSA directly. All information on this site is posted two weeks after client alert reports sent out.

Upcoming Articles

  1. Carbon Tax debate heats up in Parliament
  2. Copyright Bill goes into final stages
  3. Hate Crimes Bill on way back to Parliament
  4. DTI briefs Parliament on the road ahead
  5. RE-IPP4 alive again with LNG interest
  6. Fresh start to Minimum Wage Bill
  7. Competition Commission rough on investors

Earlier Editorials

Earlier Stories

  • AARTO licence demerit system studied  …. In what has been a legislative marathon, the update of the Administrative Adjudication of Road Traffic Offences Act (AARTO) has now reached a stage […]

  • SARS role at border posts being clarified …. In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border […]

  • Modernising SAPO a culture change ….. sent to clients 27 February…. Stage by stage, Mark Barnes, Group Chief Executive Officer of South African Post Office (SAPO), appears to be reforming cultures and […]

  • OECD money task force waiting for SA   ….sent to clients Feb 7…. Chairperson of the Standing Committee on Finance, Yunus Carrim, made it quite clear in terms of parliamentary rules that […]

  • President Zuma vs Parliament on FICA Bill …..editorial……The convoluted thinking that is taking place in South Africa to avoid the consequences of the law has once again become evident in […]