Tag Archive | fubbs

Parliament set for tough questioning

Editorial…

…..Busy session to get some answers

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

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

Party vs the Church

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

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

Take that

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

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

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

Cry, the beloved country

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

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

Ignored

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

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

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

Looking ahead

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

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

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

Energy up and down

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

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

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

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

Untouched as usual

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

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

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

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Special cabinet statement might correct damage to SA

Editorial…..

At last, a sensible special cabinet statement……

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

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

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

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

Bad four days

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

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

Always a problem

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

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

Overlooked as well

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

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

Politics ahead of economics 

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

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

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

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Changes to Protection of Investment Bill

sent to clients 13 Oct…. updates yet to be posted ….

Unpopular Bill on its way to final vote….

After some marathon debates in the Portfolio Committee on Trade and Industry, Parliament put aside the newly named Protection of Investment Bill (previously the Promotion and Protection of Investment Bill) until after the recent winter recess for members to consider two important substitution clauses suggested by an Opposition member.

Whether the final Bill will meet international expectations still remains a query despite being finally hammered through. (report and details still with clients)

lionel octoberThe Trade and Industry Department (DTI) was represented throughout the two days of clause by clause debate by director-general, Lionel October; Mustaqeem De Gama: DTI Legal Director: International Trade and Investment (ITED) and Counsellor to the WTO; with Ms. Phumelele Ngema: Parliamentary Legal Advisor. This followed earlier hearings which included many submissions from business, industry and institutions such as the Institute of Race Relations.

Taking it seriously

Bearing in mind that a full back-up team from DTI was also present for the first clause-by-clause debate, including Ms. Xolelwa Mlumbi-Peter: DTI Acting Deputy Director General: ITED who promoted the Bill from DTI, it could said that DTI fielded their full team on the issue with a full bench of reserves and consequently had taken all submissions during the Bill’s hearings a week before in a serious light.

Main objections to the Bill had come in the areas in the definition of investment; fair and equitable treatment of both local and international investors on equal terms; the definitions of “property” in the case of expropriation and disputes, particularly the issue of arbitration and the locale and parties involved in such determinations.

Lack of clarity

Specifically complaints were received that Bill as tabled was unclear on the obligations of investors;

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there appeared to be differences in standards of fair and equitable treatment for international investors; many disliked the omission of a favoured nation clauses; lack of reference in the Bill to exactly what was meant by expropriation; and the fact that DTI in the form of the Minister had express rights to regulate in the public interest and in dispute resolution remedies.

The fact that the Minister “may” allow cases to be referred to international arbitration was, by some, expressed as an objectionable approach to international business relations.

No movement on national bias

In the first meeting  to provide responses to submissions received, Lionel October assuring members that DTI had no intention to act in a manner that reduced investment flows into South Africa.    He said government had a duty to regulate in the public interest and needed the political space to do so. He insisted that any dispute resolution is to be limited at first to domestic remedies with the option, now, of state-to-state arbitration once domestic remedies had been exhausted.

Further, he said, DTI was amenable to deleting the part of the definition of ‘dispute’ that read “provided that a dispute will only arise once the parties agree, or as prescribed by law”. He explained that the proposal that the definition of “measure” could be changed to a definition reading “measure refers to binding governmental action directly affecting an investor or its investment, and includes laws, regulations, and administrative actions…etc.”

Cosmetic change to title

de GamaMustaqeem De Gama, in agreeing to the point that the title of the Bill should be changed to “The Protection of Investment Bill” in the light of the argument that there was little in the way of Promotion, said that he wished to assure all that the phrase regarding “use of available resources” in the clauses on security of investment as only referring to physical security and policing.

It was agreed that the state must provide this type of security on an investment. Wording would apply as such. It was also agreed that the word “dispute” would not be defined as such in the Bill allowing a court to fall back to the normal dictionary definition of the term.

Rights to establish investment

On the right of international enterprises to invest and the restrictive clauses in this respect referred to under Clause 6 as the “ Right of Establishment’”, De Gama said the clause does not seek to deal with or create a right of establishment up front but only sought to require that an investment be established in accordance with domestic laws. He claimed that any state had an inherent right to regulate who does and does not “establish” in their territory.

Opposition members said that wording as such was another investment barrier and Dean Mcpherson (DA) pointed to the Regulation of Land Holdings Bill where it is proposed that no foreign person may own agricultural land.  He felt that South Africa should not be limiting investment but rather welcoming all investment of whatever kind in order to grow the economy. He was wary of specifying who can and cannot invest in South Africa, particularly in the light of other Bills now being processed by Parliament.

State to hold rights on access

DTI responded with the view that “no investors have ever been so bold as to attempt to exempt themselves from following domestic law”. De Gama continued that international law gives any state the right to regulate the access of foreigners to their land. “If the investment negatively impacts the economy, the state should have a right to take action to mitigate these negative effects through various policy spaces”, de Gama concluded.

If expropriation is ever necessary in an extreme case, the Constitution requires just compensation be paid and that was clearly stated in the Constitution, DTI pointed out. Opposition members complained that the exact definition of expropriation per se “in terms of the laws of the country” was still being debated in another Bill, the Expropriation Bill, currently before the Portfolio Committee on Public Works.

Double talk

The chairperson, Joanna Fubbs, refused to allow debate on the subject to continue on the basis that joan fubbs“this definition was the responsibility of another department”. DA member, Geordan Hill Davies, complained that Committee was “just side stepping the issue insofar as The Protection of Investment Bill was concerned” and the apparent avoidance in “debating this issue in this forum just added to the uncertainty of South Africa’s intentions”.

Fair and equitable treatment

Also under the microscope was the issue raised during a submission from American Chamber of Commerce in SA and others during hearings that any form of iron clad promise of fair and equitable treatment of investments by foreign companies was not evident in the Bill. In this regard, Lionel October argued that this could not possibly be the case as South Africa needed investment and the Bill was designed to protect such.

However, the phrase “subject to national legislation” could not be deleted as a matter of state policy and the expression at the outset of the Bill of “in like circumstances” also had to stay in view that “national treatment” was necessary to avoid ambiguity, as previously stated.

Like circumstances issue

Lionel October argued that the SA government would be applying “national treatment” in line with WTO practice. The DTI had never discriminated based on place of origin, he said. The only reason for the ‘like circumstances’ clause in the Bill before them was because, for example, “minor abuses of black empowerment policies”, such policies and others being specific to South Africa, he said.

He said a dispensation had been granted on the issue that international arbitration was only to be allowed at the Minister’s discretion after all domestic legal avenues had been exhausted and to allow state-to-state arbitration to take place. Opposition members argued that in some cases in the world of modern investment this was both an impractical and unenforceable suggestion.

No “certainty”

geordin hill-lewisGeordin Hill-Lewis said this whole section was the crux of the Bill’s weakness in encouraging investment. He felt that the essence was that foreign investors wanted be treated in like manner to domestic investors and the wording of the Bill still implied, or gave the impression, that SA would treat foreign investors less favourably.  In addition, SA could legislate in the future to the further disadvantage of foreign investors. “There was no certainty in the wording at present”, he said.

New clauses

Geordin Hill-Lewis produced two amending clauses, one on “Standards of Treatment” (to be inserted after Clause 7 to become Clause 8) and a further on “Legal Protection of Investments” (to replace Clause 9 which would become Clause 10 because of the above addition). These had been prepared overnight by the DA’s legal advisors.

DTI and all members were asked to study these two clauses during the two week recess when the Bill would be finally concluded. The Chairperson noted that this issue was not closed. DTI confirmed that they would study the recommended changes. In addition, seven issues within the Bill were carried over for further discussion before the Bill could be recommended to go forward until after the recess.

The hearings conducted before the debate included submissions from Anglo-American, SA Institute of Race Relations, Banking Association of SA, The Mandela Institute of Wits University, NUMSA, the EU-SA Chamber of Commerce and the American Chamber of Commerce in SA. All expressed disquiet to varying degrees on the Bill as originally proposed.

(further articles to be posted in due course leading to final committee vote)

Other articles in this category or as background

Promotion and Protection of Investment Bill re-tabled

Promotion and Protection of Investment Bill opens up major row – ParlyReportSA

Expropriation Bill phrases could be re-drafted – ParlyReportSA

Land Holdings Bill joins state acquisition trend – ParlyReportSA

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