Tag Archive | 2013

Minister Gigaba to line up Eskom for carbon tax

SOE’s in for carbon tax on climate response….

Public enterprises minister Malusi Gigaba, without mentioning carbon tax specifically, has launched a climate change policy framework for state-owned enterprises (SOEs) that seeks to align their climate response with the United Nations Global Compact (UNGC) on carbon emissions.   South Africa is a signatory to the UNGC and to the ten  UNGC principles which include human rights, labour, climate response and anti-corruption.

Principle seven states that business should support a precautionary approach to environmental challenges; principle eight says the signatory will undertake initiatives to promote greater environmental responsibility; and principle nine encourages the development and diffusion of environmentally friendly technologies. Minister Gigaba enumerated these.

The UN’s ten principles we are to follow

The minister said, “The UNGC calls companies everywhere to voluntarily align their operations and strategies with the ten universally accepted principles in areas  which include greenhouse gas emissions”.

The minister’s statement is featured  on SA government’s news site, and quotes the minister as stating , amongst other things, that it was “strategic” for South African business corporations to align their operations with  UNGC and their principles.

In aligning the newly launched policy framework for  state owned enterprises along similar lines, he says government will develop a detailed strategic plan in relation to climate change that includes “green economy considerations in operational decisions”.

The minister referred to four key design principles informing the policy framework, including the need for SOEs to focus on the overlap between commercial, economic, developmental and environmental objectives whilst carefully managing areas where these objectives conflict.

SOEs include…….

It emerged during the debate that certain state-owned enterprises (SOEs) have already endorsed the global compact, which, according to SAnews were, Denel, Transnet, Eskom, SAA, Broadband Infraco, Safcol and SA Express.

This agreement with UNGC appears to be one of the “global agreements which finance minister Pravin Gordhan referred to in his parliamentary budget vote speech when he gave his reasons for proposing a carbon tax, one of these and the main reason being to “change behaviour towards emissions”.     This  is also the keynote point of the recent treasury updated Carbon Tax Policy Paper out for public comment and which follows the much earlier discussion paper of 2010, “Reducing Greenhouse Gas Emissions: The Carbon Tax Option”.

“Recycling” of carbon tax rather

Minister Pravin Gordhan told parliamentarians recently that the “full earmarking” (or ring fencing) of specific tax revenue streams are not in line with sound fiscal management practices.     However, the efficient recycling of revenue, his deputy Cecil Morden said, was if mechanisms for structural adjustment revising greenhouse gas mitigation (GHG) is to be possible.   Morden said, ” A carbon tax will be introduced as part of a package of interventions to ensure that the primary objective of GHG mitigation is achieved”.

Public enterprises minister Malusi Gigaba’s recent speech therefore presumably means that he has every intention of following the minister of finance’s speech in making Eskom pay carbon tax, or as Cecil Morden said, “mechanisms for structural adjustment revising greenhouse gas mitigation”.


Posted in Electricity, Energy, Enviro,Water, Finance, economic, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Parliament delays process on Labour Relations Bill

Labour Relations Bill held up by the rule book….

In what might be just a technical delay on the passage of the Labour Relations Bill employed by the opposition party, Parliament now goes into winter recess without the last minute stand by ANC labour portfolio committee members on amendments to the Labour Relations Act being carried through into law at this point. For such an important debate in terms of national interest, it was firstly an embarrassment to the majority party but secondly a victory for parliamentary procedure and the application of due parliamentary process.

A late sitting on the last day of this session of Parliament, the second of 2013, there were insufficient MPs present to reach a quorum of 201 members voting, the ANC alliance having 266 votes available.    However, no more than 120 of the ANC arrived on the second occasions when the vote was put to the house, presumably having already left Cape Town, thus allowing opposition DA members to absent themselves to maintain a number lesser than the quorum and thus frustrate the Bill’s passage.

Clearly the lack ANC party discipline is evident, giving further rise to the argument that the ANC Chief Whip’s position may be under debate. The Bill now goes forward to the next session and will referred back to the portfolio committee on labour in the next session  for re-submission.

Points of argument

One of the key elements originally included in the Labour Relations Amendment Bill was the Nedlac-agreed principle, backed by the department of labour, that compulsory strike balloting procedures should be introduced. This was not accepted by the portfolio committee, chaired by ANC MP Mamagase Nchabeleng.

The opposition have also voted for but were over-ruled on sections proposed that allow unions and employers to have to debate on thresholds of representation for unions to gain a presence in a specific workplace or sector; the repeal of the section allowing for closed-shop agreements; and amendments to the section that allow for the extension of bargaining council agreements to parties that were not part of the bargaining process.

Looking back on 2013 so far

From an overall parliamentary viewpoint, the budget voting procedure having been attended to by President Zuma in the National Assembly and all 27 government departments, the various state owned utilities and financial development bodies have reported on their progress to Parliament on the third and final quarters of the last financial year.
In actual fact they are now busy spending the current financial year’s money and Parliament in the next session, starting mid-winter, will see progress towards the medium term budget review and the consequent oversight on the 2013/4 spend to date, with progress towards earlier stated targets.

Watching how the money goes

This is where the department of performance monitoring and evaluation under Collins Chabane of the President’s Office will be able to indicate more clearly to Parliament, charged with the task of oversight, how things are going. At this stage matters will only be made slightly easier for them with the very small amount of comparative figures to date since they took up office.

What did become evident during this last monitored session of Parliament was how massive the public service has become in South Africa and how it has grown.   In fact some economists give the opinion that any growth in the country is purely reflected by the fact that the public service in South Africa has grown in similar proportion and possibly by the same amount.

Presidential Review now to hand on SOE’s

The quantity of regulatory boards were hardly able to find reporting time in the parliamentary meeting schedule and the fact that the Presidential Review Committee on state owned entities has recommended that a further proposed council be structured so all SOEs are placed under one umbrella, thus creating one more entity to fund with salaries, is worrisome.

But the word “bloated” is too easy to use. Perhaps in these difficult times, as was found in China, it may be good to provide additional jobs and provide food in many homes in tough times but the problem for South Africa remains work ethic and performance, or translated into business terms – getting value for money.

Whilst Collins Chabane may be able to evaluate whole departments against targets set and call out numbers to record performance, the record of teachers not in their classrooms teaching and policeman not in the street policing, is depressing.

Jobs improvement the key

However, perhaps it is too early to make the call that things are not working. With so many global uncertainties working against South Africa and with so many infrastructure spend programmes in place and only beginning, the winter doom and gloom story is perhaps an easily spread infection.

However, without doubt it is the year in which it will become evident if South Africa has turned the corner on the jobs issue and whether its big spending programmes can be both handled and managed properly. The opposition maintain that with the introduction of the new Labour Relations Act amendments, the jobs situation will not improve.

Posted in Cabinet,Presidential, Justice, constitutional, Labour, Land,Agriculture, Mining, beneficiation, Trade & Industry0 Comments

DPE reports on Eskom and it’s utilities to Parliament

Eskom issue raises capitalisation….

The department of public enterprises’s, Tshediso Matona, director general of DPE, clearly indicated that the apparently now solved labour deadlock at the Eskom Medupi power station was seriously occupying minds in DPE when public enterprises director generals were responding to Parliament on state-owned companies (SOCs) in the light of the state of nation address (SONA) recently delivered by President Zuma.

Indications were that the troubled Eskom construction site and the residue of issues arising was and probably still is of greater concern to DPE than issues at such as utilities as SABC and SAA, also reported on.

If the consumer doesn’t pay the lot……

On the recapitalization of SOCs generally, Matona said that if Eskom recapitalisation was not going to come from the tariffs, alternative capitalisation would have to be resorted to. This was also the problem with South African Airways and other SOCs. These companies needed sufficient capitalization to carry out their mandates and it was a matter that involved DPE greatly in their discussions with treasury.

Matona told parliamentarians that focus was being given to the challenges faced by Eskom at the Medupi power station, where work was at one stage completely stopped due to strikes. Mr Matona told the Committee that much had to be done to improve communication lines. Latest news was that Eskom had moved their financial director, Paul O’Flaherty on site.

Complexity of contracts

The minister of public enterprises was coming up with several initiatives to resolve the crises in the long term, said Matona, much of the problem being the complex nature of the projects and the fact that their complexity made them prone to delays.

Dialogue had therefore to be encouraged and he commented that “the minister was playing a major role.”

Main plan is NDP

On general issues, DPE said it was heavily focussed on “articulating the relationship between the National Development Plan (NDP) as instructed in SONA”.  Matona said this did not mean abandoning such other instruments as the New Growth Path and Industrial Policy Action Plan but that the NDP acted as a “vision” for the department and all plans and visions were being integrated.

Other issues discussed by Matona with parliamentarians dealt with the recapitalization of state-owned companies and the development of further broad based black economic empowerment (B-BBEE) initiatives within DPE.

Land restitution

Matona said that there was a need for a complete change of approach with regards to land restitution. The overcoming of current administrative and bureaucratic blockages was a most important item. It was to be dealt with shortly. On the issue of the compliance to 30 day payment of creditors rule, Matona said that this had been particularly successful and DPE was proud of what they achieved.

On the issue of investment programmes, Matona said DPE was setting up a “project management office” in collaboration with the Development Bank of Southern Africa (DBSA) to monitor infrastructure projects. DPE was now to call a supply development summit in March 2013 at which Eskom and Transnet would present their plans in terms of supplier development with DBSA present.

Posted in Electricity, Energy, Finance, economic, Labour, Public utilities, Trade & Industry, Transport0 Comments

Parliament gives birth to ISMO system

ISMO  to get Eskom’s transmission assets…

In practical terms, the transfer of electricity transmission assets (as distinct from the grid itself) from Eskom into the body of a new government utility known as the Independent System Market Operator (ISMO) has begun in theory.

This follows the agreement of the portfolio committee of energy to process the ISMO Bill in phases in the light of the fact that in practice whilst the exercise has only just commenced “on the ground”, nevertheless, a regulatory environment in which to transfer Eskom transmission assets in the course of time is needed.

Eskom at helm of exercise

The committee acknowledged such a transfer is in fact a lengthy and highly technical process, on the whole completely supervised and finally staffed by Eskom staff, they themselves being transferred to the new entity.

The state law advisors (SLA) present at a recent meeting of parliament’s energy portfolio committee agreed that such a “phased in” approach to the Bill was possible but with careful drafting of a time frame or “framework” to accompany the process.

SLA needs certainty on process of writing changes

This was providing each clause of the Bill before Parliament, said SLA, had the both the agreement and political sanction of the committee beforehand, enabling the SLA to re-write the Bill with certainty.

The purpose of moving in such direction was to provide an enabling environment to the initial phases of creating such a statutory body as an ISMO and at the same time providing clear intent and certainty in the marketplace that such a process was due to take place.

Some reservations were expressed in opposition circles that an operating environment would be particularly difficult for industry and commerce to go forward in with only a partially completed legal and regulatory environment present. Independent power producers (IPPs) were finding it difficukt to strategise without the playing field being defined. It was stated also that agreement on all aspects of the establishment of an independent transmission operator had not yet been agreed to by all parties.

However, the consensus was, with the agreement of SLA, that movement forward could be established in terms of a timing framework being written into or accompanying the Bill as far as the implementation of the portions of the Bill were concerned.

Meeting presidential requirement stated in SONA

Thus Parliament could meet the presidential requirement stated by President Zuma in the state of nation address (SONA) that the ISMO Bill be created as soon as possible and whilst it was appreciated that much of the creation of such a state utility as an entity could happen much of the detail such as the transfer of assets and the question of operational ability would be a much slower and detailed process.

Meetings have now taken place over the next few weeks re-drafting the Bill on this basis and a “B” draft version of the Bill produced clearly defining a portion for a timing framework and one for the usual definitions and establishment provisions.

Posted in Electricity, Energy, Public utilities, Trade & Industry0 Comments

AG suspects corruption in taxi recapitalisation

On corruption MPs ask for Hawks…

A number of  MPs, frustrated by hearing of corruption and by not knowing whom to believe, demanded that the SAP Priority Crimes unit and the Hawks be called in to investigate financial failures and mismanagement of the taxi recapitalisation programme.     The department of Transport (DoT) had been called before the portfolio committee to explain the qualifications contained in the AG’s annual report on the department’s financial performance.

The renewal without authority of the  e-NaTis vehicle registration contract, a further fact reported by the auditor general (AG) in the 2011/2 DOT departmental financials, also gave MPs considerable concern.

Indicative of the seriousness of the issue was the fact that the minister of transport, Ben Martins, himself previously a parliamentary chairperson, appeared before the portfolio committee of transport to give assurances that investigations would take place.

DoT denies claims

During the briefing, the deputy director general of transport, DoT, Mathabatha Mokonyama, maintained that the claims made by the auditor general were incorrect insofar as the scrapping payouts made by his department were concerned.

He maintained that despite the AG’s qualification that no supporting documents, or any form of accounting documents for any of the thousands of old taxis bought from their owners before scrapping could be accounted for, the claim by the AG was quite untrue despite the lack of documentation supplied.

He acknowledged that indeed R2.9bn, the amount under query, of the total of R7.7bn provided since the programme had started, had all been properly recorded but documents simply not provided with the reconciliations to the AG. The AG maintained that the only document that existed was a simple spread sheet of expenditure.

No backup documents ever came

The AG’s office, represented by deputy auditor general Kimi Makwetu, also stated that whatever the case no documents to support the disbursements had subsequently been supplied which were clearly asked for. As far her office was concerned, this meant unrecorded transactions had occurred and the department’s performance within DOT on this issue marked as “no information available”.

Minister of Transport Ben Martins promised his personal intervention in the matter and that investigations had already started within DOT.   During the course of the meeting it was noted that the consultants called were called in some years ago to manage the scrapping programme. The name was given as the Siyazi Consortium whom, it was stated, had been paid R640m to manage the scrapping programme.

Early ideals

In late 2006, the then minister of transport Jeff Radebe, now minister of justice, issued a statement saying, “I am therefore delighted to announce that for the first time in the history of the taxi recapitalisation programme, we will witness the real-time scrapping of old taxi vehicles.”

He said at the time, “ Our scrapping administration agency, Siyazi Consortium, is also far in advance in setting-up scrapping facilities in various provinces and has the target of ensuring that we recapitalise 85% of old taxi vehicles by 2010.”

e-NaTis also touched by fraud

Parliamentarians were also told by the AG at the meeting of the irregular extension of the e-NaTis vehicle registration programme, running currently at R1bn over its original contract value of R594m, without any formal tender process or regularity in terms of the public finance management act. Opposition MPs called for a police investigation.

The chief financial director, ministry of transport, confirmed during the meeting that neither the ministers of transport or finance were told of the extension by DOT officials but that national treasury had been informed.

Posted in Finance, economic, Fuel,oil,renewables, Trade & Industry, Transport0 Comments

All not well in the trucking industry

Trucking dominated by large companies…

In answer to a call made by the portfolio committee on transport on the state of the trucking industry in South Africa, it became evident from responses by the department of transport (DoT); from the Road Freight Association (RFA) and examples given by an independent small operator, that large truckers dominated in an industry in an unfair manner that was rife with corruption.

Mawethu Vilana, deputy director-general DoT, said that going back to 2002/3, the department had begun an exercise to look at how to provide opportunities and also broaden the space for participation by smaller operators in the road freight sector. It became clear that smaller entrants lacked finance; that an “unscrupulous broking sector was part of the industry” and generally there was a lack of skills and know-how in the trucking industry generally due to poor provision of training facilities and an industry which was under capitalised except but a few large operators.

DTI main players

Vilana admitted that when it came to black empowerment opportunities, the main player was the department of trade and industry (DTI) and not DoT, DTI having the BEE verification control system in their court, DoT playing virtually no part in either reform of the industry or the development of SMME’s.

On the subject of crime, little could be done about bribery and corruption, Vilana admitted under questioning by parliamentarians, unless legislation was beefed up with proper powers and a full, properly constituted investigation carried out into the industry.

He also admitted that permit fees were high because of the principle of “user pays” which had been adopted by government “since road truckers caused great damage to the road system.”

RFA has its say

Gavin Kelly, RFA said his association had 385 members, with 109 affiliates and 40 associates representing different levels of possible enforcement and ability to develop skills and training but complained of massive permit fees (the last being 412%); large levels of corruption amongst government officers and no value being added by the government’s road agency to the industry in general.

RFA also stated that there appeared to be no proper government road freight strategy and single government officials determined policy without ministerial approval.    Kelly said “no real consultation exists between the state road agency and the industry” and it was the RFA view that DoT “was just going through the motions.”

One medium sized operator, Tramarco, said that despite heavy investment in trucks and bearing in mind the “ever rising price of fuel”, it was almost impossible to break into the transport business to obtain long-term “tangible” contracts from major mining groups and state utilities.   They appeared to feel “safer” using old contacts and larger companies and quite clearly favours were being granted, they said.

Their spokesman said that the entire industry was dominated by a number of large trucking groups and smaller entrants were effectively “locked out” of the industry because the industry was either not regulated properly.

Not happy with AARTO

They also said the licensing AARTO system was not working properly; there was a lack of legislative enforcement; too many corrupt officials had too much power and there appeared a lack of interest by large companies generally to uplift smaller operators, little interest in encouraging training and building the trucking job market.

Tramarco said that no favours or finance was called for by the medium and small sized companies but merely a fair chance to compete for tenders.   They called on government to provide leverage within its own government departments, state utilities and with industry to break up monopolistic habits and encourage more black empowerment opportunities.

“Large groups and utilities make lots of statements on freeing up the market but nothing happens”, Tramarco said.

Help SMMEs

MPs demanded of DoT that concrete steps be taken to assist small entrepreneurs and to provide proof of a record in the area of skills development. “It was clear that little had been done by the DoT in this area”, said one ANC member.

Opposition members said they were convinced that DoT “had no meaningful understanding of what the situation was on the ground.” One MP said the City of Cape Town had provided a solution by cutting the bigger contracts into smaller parts, supplying smaller quantities and increasing the number of entrants slowly. He called on DoT to start thinking of similar solutions on a national scale.

Chairperson Ruth Bhengu told DoT that the meeting had been called because an examples had been given to parliamentarians whereby “large companies gave small companies short-term contracts and rates that would not take them anywhere and businesses that were desperate could not only pay for their trucks but could not maintain them, the business going ‘broke’ as a result”.

There was also an immoral business broking sector emerging, she felt.

Roads deteriorating

Vilana of DoT said there was nothing government could do to protect such entrepreneurs and that this was the nature of the industry which was high capital risk with a road system that was deteriorating.

The committee found this all very unsatisfactory and called for further meetings with DoT stating that these matters had to be resolved and that the challenges facing the trucking industry were to be investigated further. Also cross-parliamentary meetings with public enterprises and trade and industry committees were to be called. DoT was told it would be re-called for further reports.

Posted in BEE, Labour, Land,Agriculture, Mining, beneficiation, Trade & Industry, Transport0 Comments

Transport Laws Bill on e-tolling amended

Public disclosure written into Bill….

road tollsProposed amendments to the e-tolling Transport Laws and Related Matters Bill affecting alternative routes which are used to avoid or by-pass tolling systems – amendments originally proposed by the Freedom Front Plus (FF+) and subsequently amended by the Democratic Alliance (DA) and which vitally affect public disclosure – have been accepted by the parliamentary committee on transport and will be incorporated in the final Bill to be presented to the National Assembly for approval.

The Bill as originally tabled makes the proposition of e-tolling legally acceptable on a national basis. However, in a subsequent move, published proposals came forward from the FF+ to the effect that all socio-economic reports and traffic impact assessments compiled on alternative routings must be made available to the province concerned and every municipality affected before any e-tolling project can commence.

Alternative routes get heavy use

The FF+ proposal was on the basis that a considerable number of small towns and local governments have been badly affected by heavy traffic, where heavily used by-pass routes, now required by law, have been picked to obviate the necessity of paying e-toll fees.  Lower grade roads have sometimes been made impassable and even bridging damaged.

On the basis of the FF+ request, the necessary proposals were published but during the process of adoption it was pointed out by the DA that such amendments were still not acceptable. Whilst the principle was right, they said, the amendment was insufficient since no guarantee was provided on public consultation or public involvement, particularly in the case of the affected parties.


No chance to hide

Ian Ollis, shadow minister of transport said, “What happens if a provincial officer or somebody at local government level, maybe even somebody who has a vested interest fails to disclose the reports or impact assessments or even hides them in a drawer?”, he asked. The case of OUTA was a case in point, he said.

After debate with the state law advisor, the DA’s additional proposal that all such reports on socio economic factors and all impact assessments involving matters regarding e-tolling were to be published in the government gazette for public consumption, was accepted.

The Bill will now go forward to the NCOP for approval.

Posted in Finance, economic, Trade & Industry, Transport0 Comments

Fertilizer and Feeds Bill to register pest control operators

Control of fertilizer movement…..

Parliament is in the process of hearings on the recently tabled Fertilizer and Feeds Bill which proposes a registrar of fertilizer, farm feeds and agricultural remedies and particularly calls for the registration of pest control operators. The Bill will be expensive to operate.

Registration the key

The Bill tabled by the minister of agriculture, goes further in that it says the new structure will “regulate or prohibit the importation, sales, acquisition, disposal or use of fertilizers, farm feeds, agricultural remedies and stock remedies and provide for the designation of technical advisers and analysts.”

The portfolio committee on agriculture, forestry and fisheries will debate the Bill in the light of the hearings.

Posted in Land,Agriculture, Trade & Industry0 Comments

Infrastructure Development Bill to cut red tape

Land expropriation tool….

BS000318Armed with a new tool, the Infrastructure Development Bill, government is hoping to speed up infrastructure projects by cutting red tape; shorten approval times; hit the corruption chain; force quicker decision making; and change the system by which expropriation of land takes place observing correct ground rules.

The new Bill with all of these objectives in mind has been tabled by economic development minister, Ebrahim Patel, and will grant statutory powers to a special Presidential Infrastructure Co-ordination Commission to address project management and regulatory delays challenges; coordinate the issuing of permits and licences; deal with resolution of land servitudes; bring the three tiers of government into better working relationships; improving co-ordination between public entities and improving cooperative governance in an overall sense.

Cracking down on corruption

The Bill was described by President Zuma in his state of the nation address.   He said, “We are cracking down on corruption, tender fraud and price fixing in the infrastructure programme. The state has collected a substantial dossier of information on improper conduct by large construction companies. This is now the subject of formal processes of the competition commission and other law enforcement authorities.”

Minister Patel’s statement, when tabling the Bill, said that “focused project management systems and clear performance dashboards” were being built up so that projects in hand could be monitored. Opportunities for the private sector were now being investigated and a conference would be held by government to bring about such a processes with business and industry.

Constitutional process

On the issue of expropriation of land, the Bill states it is being careful to follow constitutionally accepted procedures but Minister Patel said that bearing in mind expropriation can only occur for a public process, in order to speed matters up the process will be taken as a “given” and where such an action is involved, this will be handled on a “post development basis”, the state taking the risk of losses or losing cases.

The actual workings of the Bill envisage a statutory process led by a steering committee that can override and intervene in statutory matter affecting development, the principle being to cut down on time lag and legal obstacles.

No frills

The Bill is relatively telegraphic in its preamble and simply states the Bill is intended to “provide for the facilitation and co-ordination of infrastructure development which is of significant economic or social importance to the Republic; to ensure that infrastructure development in the Republic is given priority in planning, approval and implementation; and to ensure that development goals of the State are promoted through infrastructure development.

The Bill immediately gets down to the business of forming the Presidential Infrastructure Co-ordination Commission and the first issue to be dealt with under “objectives” is the question of the acquisition of land, making it relatively transparent where infrastructure development delays might have been occurring.

Top team

The makeup of the commission also leaves little doubt on the intent that the Commission has to exercise its powers, its body made up of the President, the Deputy President; ministers designated by the President; the premiers of the provinces and the
chairperson of SALGA.

The President, or in his or her absence the Deputy President, is the chairperson of the Commission and a decision by the majority of the members present at a meeting of the Commission is a decision of the Commission.

The Bill will enable the Commission to tie in various government department to binding decisions. One has to assume that by giving such powers to the commission over the department of public enterprises, all state utilities therefore be subject to common actions.

Posted in Cabinet,Presidential, Energy, Enviro,Water, Health, Land,Agriculture, Mining, beneficiation, Trade & Industry, Transport0 Comments

Communications bill awaited setting up consumer body

Communications Bill awaiting tabling….

Dina PuleA draft communications bill probably to be entitled the Independent Communications Authority of South Africa Amendment Bill, published in late 2012 for public comment is awaited in the form of a tabling by Minister Dina Pule.

The primary purpose of the proposed bill from the documents published for comment it seems is to set up a complaints and compliance commission (CCC) as a separate body from the independent communications authority of South Africa (ICASA) and thus gain consumer impartiality.

Electronic transactions the focus

The Bill also proposes a number of important provisions regarding electronic communications networks and services used in electronic transactions.   Mechanisms are also introduced to ensure the accountability of committees, ICASA and their councillors and for ICASA to relate more closely to the Public Finance Management Act.

Early 2013 tabling

The public participation period was concluded before the end of December and the new parliamentary session should see this Bill tabled in the next few months.

Posted in Communications, Justice, constitutional, Trade & Industry0 Comments

coal mining: Eskom pushes for black ownership

Could coal become a “national asset”….

coal miningMinister Gigaba of public enterprises has made of number of interesting comments on coal mining in recent weeks regarding coal resources generally, stating in a public interview before the Manguang conference that declaring coal a national asset might be a possibility.

This could in turn, he said, be a precursor to imposing levies on exports, thus providing greater incentives to supplying coal to Eskom.  Gigaba also said that integrating emerging miners – which he wanted to see as defined as those with a 50%-plus-one-share black ownership – into the state utility’s supply base and this would assist in bringing black transformation in the coal industry to a new level.

Eskom itself told parliamentarians at the end of 2012 that it currently buys 130m tons of the 250m tons of coal produced a year in South Africa for use in its 13 power stations.

Eskom could focus on emergent suppliers

As the ANC conference at the end of last year went into gear, the issue of black participation in the coal mining industry arose when Gigaba stated that a request might come from Eskom to specifically assist in arrangements for coal supply from emerging black miners.

Gigaba said at the time that that coal production was currently concentrated in large mines with eight mines currently supplying 61% of the output. Engineering News commented on this remark quoting that there are 33 black economically-empowered (BEE) coal mines in South Africa if one used the definition of 26% black ownership. However, if one measured using minister Gigaba’s hoped for 50%-plus-one-share definition, the number would be negligible.

Levies not wanted

The question of levies on exports has not been debated in Parliament, only commented upon, but newspaper reports indicate that larger coal producers have complained, as one did publicly, that “any export levies would constrain their ability to invest in new coal mines as well as undermine efforts to improve infrastructure”.

Eskom says in its annual report  that it has contracted out 80% of its coal supplies to 2018 but beyond that there would have to be significant investment in coal mining by industry to meet future demand. It also says it has been working for the past few years to develop a long-term coal supply strategy which would ensure a secure supply of coal in the right volumes, at the right quality and at costs that South Africa could afford.

Eskom walks the talk

This was accompanied by a statement that Eskom was committed to ensuring that its procurement was accompanied by the emergence of black players into the industry. In a resultant conference held by Eskom with some 500 smaller miners and black entrepreneurial parties, Eskom told attending delegates “it would use its purchasing power to empower black-owned suppliers and increase equity stakes to 50% plus one share.”

Speakers also stated that “commercially acceptable levers would be used to increase black ownership.” Participation in discussion with established industry players, they said, had been achieved successfully in a case with Anglo American and BHP Billiton, resulting finally in one such a black owned mining venture, it was noted.

Posted in BEE, Electricity, Energy, Enviro,Water, Finance, economic, Fuel,oil,renewables, Labour, Public utilities, Trade & Industry0 Comments

air quality dispersion comments called for

strelitsia_smallair quality regulations for comment…

The department of environmental affairs (DEA) has published draft regulations regarding air quality in terms of the National Environmental Management: Air Quality Act referring to air dispersion modelling and has called for comments.

The regulations, says an explanation from DEA, provide a technical guideline for demonstrating compliance with air dispersion modelling for quality management in South Africa which is applicable to the need in this country for an air quality management plan, prioritising areas in such a plan, an atmospheric impact report and assessments accordingly.

New basis of controls

The regulations, which are in draft stage, are accompanied by the comment that that the Air Quality Act as a whole represents a distinct shift from exclusively source-based air pollution control to holistic and integrated effects based air quality management. Air dispersion modelling is part of this, they state.

DEA also states that the objectives of the regulations and guideline are to standardise model applications for regulatory purposes and to make sure that dispersion modelling studies are compatible across different cases.

Any written comments should be submitted to DEA by 14 February.

Posted in Enviro,Water, Health, Public utilities, Trade & Industry0 Comments

IPP 3 delayed until mid-August says DOE

More time needed before next IPP window……..

Announced by the department of energy (DOE) during December, potential IPP power producers now have until 19 August 2013 to submit their bids, thus meaning that the submission date for the third bidding window for independent power producers (IPP) has been postponed again.

As part of the renewable energy IPP procurement programme, which was introduced in August 2011, the submission date had originally been set for 7 May 2013 but DOE says that more time is needed to incorporate lessons learnt from the previous IPP windows.

In addition, DOE says it needs to update requests for proposals according to new matters coming to light

More power from renewables

By giving more time to bidders to consider updated request for proposals, this affords the IPP team, says DOE, more time to consider the preferred bidder process, DOE stating that the country’s overall energy needs programme will require an additional 3200 MW of renewable energy from the three phases or windows of IPP bidding.

IPP targets in technical terms for onshore wind, both types of solar energy, biomass, bio-gas, small hydro and generalise small energy projects are all included in the DOE statement.

Amendments to regulations regarding petroleum products wholesale licences and petroleum products manufacturing licences were also published by DOE in December late.

Posted in Electricity, Energy, Finance, economic, Land,Agriculture, Mining, beneficiation, Trade & Industry0 Comments

Eskom taking SA “to the edge”- says EIUG

EIUG says review of Eskom strategy necessary….

eiuglogoMike Rossouw, chairman of South Africa’s Energy Intensive User Group (EIUG), says South Africa has reach a “tipping point” in terms of electricity prices and that not enough attention is being given by government to the potential effect of damage to productive sectors of the economy with consequent risk of demand contraction and revenue collapse.

Writing in the Business Day, Rossouw, who represents major groupings of large power consumers such as paper and pulp, motor vehicle and steel manufacturers, called for a review to consider urgently new technology innovation in power sources; the validity of a substantial, expensive and inflexible nuclear programme and much more investigation into alternative fuel options such as gas.

Casualties ahead

EIUG stated it represents some 44% of the total electricity demand in South Africa and Rossouw complained that already the country has had to watch its ferrochrome industry lose its place as world leader to China in the last few years because of “global ineffectiveness on the electricity pricing issue”.

Foundries are shutting down, he said, and he blamed government for its lack of “an holistic approach in dealing with Eskom’s price application.”  He said that South Africa “cannot afford to get this one wrong” and called for NERSA and the minister of energy to take into account an investment and operating climate that should have more regulatory certainty.

”Government through NERSA must extend affordability to industry on power issues and accordingly the state must re-think its position on the effects of Eskom’s 16% hike per year for five years on the economy”, he said.

Looking back

Rossouw noted that the Eskom application will take the price of electricity “to about 128c/kWhr, an overall increase of a huge 540% over a 10-year period to 2017 with prices have already increased by some 200 % since 2007.

“Electricity cannot be treated as a source of revenue nor as a vehicle that allows municipalities to recover their losses”, he said. “10% increase is a figure that is enough to allow Eskom to continue viable operations”.

Calling for less “bulking up of Eskom’s balance sheet to meet rating agency expectations”, Rossouw stated that Eskom’s MYPD(3) application to NERSA contains only “limited disclosure” but, nevertheless, NERSA, he says, does in fact have access to the full story and maintained that the regulator should react by balancing affordability against the Eskom capital expansion programme.

In the article, he repeated the call that much that much more attention should be given by DOE to what appears to be a “highly inflexible nuclear power generation programme” and “more investigation carried out into alternative fuel options such as gas.”

Posted in Electricity, Energy, Finance, economic, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Credit Bill aims to help consumers – ParlyReport

Private member’s Bill calls for hearings

In an interesting development in terms of the newly introduced National Credit Act far as consumer protection is concerned, one ofmario oriani-ambrosini the first private member’s Bills to be seen for a number of years seeks to make some important to the anchor legislation.

The National Credit Act Amendment Bill is being tabled by IFP member of Parliament, Mario Oriani-Ambrosini;  an explanation within the background of the Bill stating that the move is necessitated in order to avoid unintended consequences of existing legislation and bring debt relief in specific deserving cases.

A private member’s Bill is treated, if accepted by the Speaker, in the same manner as any Bill introduced by a minister. The last private members Bill was introduced by MP Edwin Conroy some eight years ago.

The preamble of the Bill says the new proposals include the need to clarify the definition of the use of the word “consumer” in order to avoid some of the unintended applications that might occur in transactions with consumers at the retail level or as end users, particularly so as to exclude business-to-business transactions or, for example, a mortgagee applying for a loan and a number of other such purchasing situations.

Also the preamble includes a statement regarding a perceived need provide economic relief to deserving consumers under debt rearrangements by giving the discretion to a magistrate acting on the recommendation of the relevant debt counsellor to suspend the accrual of interest on a debt or debts for a period of up to five years, if serving such debt becomes in itself beyond the debtor’s financial capabilities.

Such is presumably perceived by the originators as being important during the current period of economic downturn.

Comments are invited to the portfolio committee on trade and industry at Parliament.

Posted in Finance, economic, Trade & Industry0 Comments

MPRD Amendment Bill to be tabled early 2013

MPRD Amendments will cause heat in oil industry…..

susan shabanguNot yet scheduled for meetings by committees or hearings dates in Parliament, is the draft Mineral and Petroleum Resources Development Amendment Bill for which mineral resources minister, Susan Shabangu, obtained cabinet approval for in early December last year and who  called for public comment on the draft by the end of January 2013.        With a problematic preamble which states that the draft Bill is to promote the concept that “that the nation’s minerals are developed in an orderly manner while promoting justifiable social and economic development”, certain sectors have already provoked considerable industry comment which were presumably have been conveyed in comments to the minister and her department as called for when gazetted.

Amongst the many “refined existing definitions”, the draft Bill as it stands at present and possibly to be tabled seeks to allow the state to acquire by right of ownership any mineral resource to a “free carried interest” in any exploration matter and a right to acquire “a further interest” in that exploration with also production rights “through an organ of state or state owned company”.

Changes are also proposed on the issue of ministerial limitations on the ability of mining companies to trade JSE shares on the open market.

PASA to go

The disbanding of the Petroleum Agency of South Africa appears to be on the cards as well, since the draft Bill clearly relegates all functions of this agency to the department of mineral resources (DMR) and much of the work undertaken with and by DMR will now be allocated under the Geosciences Act, other work passing from DMR to fall under the National Environmental Management Act and therefore bringing in a further department.

“Technically, therefore, government departments would become a petroleum regulator”, was the comment by the Offshore Petroleum Association of SA in the Johannesburg press. However, clarification of this and the situation with regard to PetroSA and the acquisition of exploration rights will presumably emerge during parliamentary hearings since submissions so far in terms of the gazetted document are naturally private.

The draft Bill also contains a great number of changes and redefinitions in the area of associate minerals affecting a broad spectrum of the mining industry. However, in particular the draft states that it proposes to “make provision for the implementation of the approved beneficiation strategy through which strategic minerals can be processed locally for a higher value”. The ability of the minister to set those beneficiation levels and any prices seems to be incorporated.

This specifically will bring focus upon the benefits from tailings in mine dumps, meaning that not necessarily the owners that created them originally will be the sole beneficiaries of subsequent workings. On this subject, the Bill also calls for a new description or interpretation of the word “beneficiation”, this to be inserted into the anchor legislation, the MPRDA itself, by amendment.

Regional mining developmental bodies and environmental committees regarding MPRDA matters are to be set up under the jurisdiction of DMR, such bodies having regional managers with powers.

What effect any submissions have will been seen from the document that is eventually tabled.

Posted in Energy, Fuel,oil,renewables, Justice, constitutional, Mining, beneficiation, Public utilities, Trade & Industry0 Comments

Tougher rules ensvisaged with new environmental law

Much debate to follow on penalties

Much in the way of environmental legislation has been pulled together in one amending document, the National Environmental Management Laws Amendment Bill, with considerable and extensive debate currently in process surrounding the implications of imposing penalties on environmental offenders.

The mechanisms to assess such penalties, who actually imposes them and collects, is not clear, say parliamentarians, and many such matters, particularly those which affect mining and necessary environmental plans for development, have been deferred into the next parliamentary session.

What constitutes unlawful activity?

A considerable number of the provisions surround the empowerment of the minister to prohibit development in certain geographical areas will have to be considered and also how to proclaim activities making them unlawful or allowed in terms of the National Environmental Management Waste Act. Also the question of the imposition of fines in certain areas of industrial activity will be probed.

On the question of general unlawful environmental activity and the fines relevant to their sections, it has been submitted by a number of environmental groups  in public hearings have complained that by defining the fines in the manner they are proposed was, in reality, as an unintended consequence making provision for a  “menu” to enable parties to “buy their way out” of certain environmental restrictions.

Procedures to be followed

Much of the legislation so far agreed to, however, involves non-problematic areas with regard to changes in environmental implementation plan procedures;  the appointment of environmental officials and the preparation of “outlook reports”. Further debate is expected to follow on legislative issues surround the controversial subject of “products” deemed to possibly have a detrimental effect on the environment.

Affected also by the proposed legislation is the National Management Biodiversity Act, where certain relatively minor amendments are concerned regarding activity in this area of endeavour but the entire process of amending the anchor legislation must be noted as having implications for a number of other pieces of environmental legislation, particularly the National Environmental Management Air Quality Act.

The current chairperson for this session of Parliament has been Adv. Johnny de Lange and the committee goes forward into 2013 with a number of major issues on its agenda that urgently need to be debated.

Posted in Enviro,Water, Mining, beneficiation, Trade & Industry

Public service corruption and misconduct could hit 1bn mark

Parliament gets commission sum up for 2012……

The parliamentary session for 2012 came to an end on a sour note regarding corruption with an update from the Public Service Commission (PSC) informing the public service and administration portfolio committee that, based on auditor general outcomes for all government departments, the total sum representing  “financial misconduct” in the public service for 2011/2012 could well hit the R1bn mark by the time PSC report was ready.

PSC commissioner, Prof. Richard Levin, told parliamentarians that, in the view of PSC, offending heads and senior public servants should be charged criminally for failing to declare conflicts of interest and that senior public servants in the supply chain should be prohibited from doing any form of business whatsoever.

Last year misconduct findings on the increase

In 2011/12, the period under review, some 838 senior civil servants were charged with financial misconduct, a considerable increase over the previous two years, he noted.    An extraordinary 20% of senior managers in the department of co-operative governance and traditional affairs had interests in firms doing business with government; with department of transport standing at 19% and the department of public works reflecting 17%.

Prof. Levin said that departments around the country had “consistently failed” to take action against clear cases of misconduct, primarily due, he said, to an inadequate capacity to chair disciplinary hearings, resulting in a considerable number of public servants remaining for long periods on costly precautionary suspension.

More disciplinary powers called for

In his report to the committee, Prof. Levin recommended that the PSC be given more powers to enable it to “vigorously follow up” in the case of severe misconduct; that lifestyle audits of key staff be conducted where appropriate and with urgency, as well as indebtedness reports conducted where obvious implications were concerned.

He called for the PSC to have greater investigative powers and that government public service policy on whistle-blowing and access to information “needed to be developed and implemented”.

Call for all to join the fight

Meanwhile, public services and administration deputy minister, Ayanda Dlodlo, said at an anti-corruption day summit in Pretoria that “the battle against corruption is not only the responsibility of government and should be supported by civil society and the private sector”.

She said the entire South African society had a role to play in the fight against corruption.

“The word corruption irritates me, and I hope it will irritate more people and mobilise them to fight against it. This word must disappear entirely from our vocabulary. Our country has lost an unquantifiable amount of money as a result of corruption; money that could have been used to uplift the poor people”, she said

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, Public utilities, Trade & Industry0 Comments

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