Tag Archive | Labour

Agri-SA gives views on minimum wage

Tough stuff….

agri-saIn a tense meeting with MPs at working committee level, Agri-SA warned of possible job losses in the agricultural sector if a national minimum wage (NMW) were applied across the board without reference to categories or conditions of employment. The parliamentary portfolio committee on labour had invited Agri-SA and trade union affiliates to comment on the issue of a NMW being applied across the board in all spheres of national employment.

Lumka Yengeni, the chair of the portfolio committee, who caused a stir in the last parliament for touring the country for public views on labour brokers, in addition had called for comment from the mining, industry and commerce. The issue of a minimum wage for domestic workers, however, was not tabled at these series of meetings.

Higher wages the result

In the debate that took place, Hans van der Merwe, Executive Director, Agri-SA, told parliamentarians that a minimum wage set at a higher level than at present as part of a national application would result in a considerable number of structural changes within the farming industry to accommodate what would undoubtedly be, as a result, a call for higher wages in many spheres.

 He said any “adjustments” would no doubt be characterised by the shedding of jobs, increased mechanisation and the consolidation of farming units, as had happened in the past when farmers throughout the country had to “adjust to maintain their competitiveness and profitability.” He warned government that any such moves “should be carefully considered first” since aside from a number of unintended consequences, the target contained in the NDP to create a million jobs by 2030 would be vastly undermined.

Steadily less

Van der Merwe showed parliamentarians that the number of farming units in 1993 was estimated at 57,980, declining to 45,848 in 2002 and to 39,982 in 2007.   The decline in individual units continues, he said, and now some 20% of commercial farms were responsible for 80% of total production.   Employment showed a decline between from 1,093,265 in 1993 to 796,806 in 2007 with further declines since, much of it no doubt due to consolidation of farming units.

He said, “Whilst this does not necessarily imply that consolidated and larger farms are more cost-efficient, it does point to the fact that larger farming units have the financial ability to mechanise. This, against a backdrop of rising costs and in particular rising wages makes mechanisation more and more attractive.”

Agri-SA pointed out that all sectors in industry and commerce consisted of many different and contrasting sub-sectors and this was especially true of the agricultural sector. It ranged from small-scale farmers with a few hired workers to those who only hired seasonally; from some with very low skilled workers to some with a major system of mechanisation and highly skilled operators. He was adamant that there could be no “one size fits all” approach to a minimum wage in the agriculture sector.

The trend overall though, Van der Merwe said, was changing to a situation where in the end there would be fewer but more highly skilled workers with quality jobs and with a higher wage and more complementary benefits.   He produced statistics from UCT to show historically a picture where, as the agricultural minimum wage had increased, so the employment numbers had immediately gone down.

Big squeeze

Finally, he pointed to the fact that a number of farmers had currently hit hard times as a result of the current global economic situation and local recessive climate insofar as exports and local production was concerned and many were going out of business and with financial problems.

Van der Merwe said that in an overall sense the country was going through difficult times in the agricultural sector and there was consequently a threat to national food security targets associated with the decline. He said that the monthly national minimum wage in Namibia was R888, Botswana R5,470, Zimbabwe R590 and South Africa R2,420 and he commented that the issue of a much higher minimum wage would “increase the possibility of South African farmers investing in neighbouring countries where there were more favourable conditions for farming, particularly where labour issues were concerned.”

He also warned that any substitution of local farming produce would be at the cost of South Africa having to import more agricultural produce.

Diametrically opposed

Raymond Mnguni, Food and Allied Workers Union (FAWU), said the union was insulted by the comparison of national minimum wages between neighbouring countries and South Africa.  It made little difference how bad or worse other countries were, he said, but the point was that South African farmers on the whole were paying “poverty wages”.

He indicated that Agri-SA had inferred throughout their presentation that farm workers in this country were a liability rather than an asset.  He said FAWU was “tired” of the threat that farmers would mechanise and cut down on the wages bill every time the question of a better life for working families on farms came up.

Neil Coleman of COSATU disputed Agri-SA’s statistics that showed a decline in employment in the agricultural sector of recent, quoting figures from Free Market Foundation.  In response, Agri-SA admitted that since 2010 to 2013 there had been a minimal increase in employment but their point was that every time there was an increase in minimum wages, employment figures dropped.

What others are doing

Opposition member, Ian Ollis (DA), said nobody wanted the workers to remain poor and he considered the statistics, in fact, slightly encouraging.    Mostly, he added, they showed that Zimbabwe, Mozambique and Namibia badly needed a national minimum wage of some sort very soon.  

He said the debate in South Africa was not about the need for a minimum wage but whether there should be a national minimum, what it should be currently and whether it should applied sector by sector according to the economics of that sector. He said opposition members needed to know how and to what degree Agri-SA were involved in skills training and more about any adaption to mechanisation.

There followed lengthy questioning of dubious quality from various smaller agriculture affiliated unions and opposition members, notably the EFF, on the subject of mistreatment of agricultural workers, low wages paid and matters which did not contribute to the issue of a debate on the NMW.  

At one stage, chair Yengeni called for questioners to refrain from derogatory comments. Ms Mantashe (ANC) called for a detailed written response on the training and up-skilling of farm workers and some accurate figures to be supplied for committee consumption. 

She added that she was disappointed that Agri-SA had omitted the information on the profits made in the sector, particularly comparisons before the 2008 financial crisis and now. Similarly, chair Yengeni called for details of skills training undertaken in the agri-sector.  Agri–SA said such figures were available and would be submitted to the parliamentary committee.

Other articles in this category or as background

http://parlyreportsa.co.za/cabinetpresidential/new-approach-to-land-reform/ http://parlyreportsa.co.za/landagriculture/state-land-reform-process-excludes-expropriation/ http://parlyreportsa.co.za/landagriculture/parliament-discusses-use-agric-gmos/

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Lumka Yengeni

Parliament debates national minimum wage

Sector views on national minimum wage ….

editorial …  Feisty or not, Lumka Yengeni of the parliamentary portfolio committee on labour certainly knows how to advance her career. Whether all her recent parliamentary activity is in line with what Lithuli House wants one never knows but whatever she does seems to attract attention.

The recent hearings on the possibility of a national minimum wage (NMW), which the ANC has stated as a policy imperative, caught most by surprise by the wide ranging topics brought up in debate.  Lumka Yengeni seems to have latched on to ANC policy and summonsed many parties to Parliament to give their views on the subject, including BUSA, the Chamber of Mines and Agri-SA.   Invited to the debates in many cases were also the appropriate union affiliates to that particular sector

Reports on the consequent debates are with clients and will be posted on our website in a fortnight’s time, since immediacy is the purpose of our reports to them.

Maximum pressure for NMW

 The unusual thing about these meetings, as South Africa pivots on the edge of economic direction, is that Parliament should take it upon itself to debate the whole issue of the national minimum wage when the subject also has been scheduled by Deputy President, Cyril Ramaphosa  for a national gathering.

Whether this is naiveté on the part of Lumka Yengeni or plain political upstaging only those close to her will know but the experience of the apple farmers in Elgin over labour broking will testify to the fact that she knows the art of political theatre.

Perhaps, on such a difficult subject, forewarned is forearmed.

Other reports in this category

http://parlyreportsa.co.za//labour/labour-committee-turns-away-strikes/

http://parlyreportsa.co.za//labour/labour-relations-act-changes-passed/

 

 

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Labour committee ignores strikes

Strikes not given as labour problems….

dol logoActing DG of the department of  labour (DoL), Sam Morotua, when asked before the recent short recess for “the major challenges” faced by his department in the labour market, noticeably failed to mention any of the issues surrounding the current spate of strikes both in the mining and metalworkers section.

This was despite later stating that one of his departmental tasks was to run programmes evaluating the effects of labour issues upon the economy.

New chairperson of the labour portfolio committee, Lumka Yengeni, had broken with normal procedure and asked Morotua to enumerate the most important issues currently being dealt by DOL before commencing the department’s strategy briefing Parliament together with the department’s justification of the current labour budget appropriation for 2014/5.

Chair Yengeni had already put her energetic stamp on the committee’s work programme with a more interactive and vigorous approach during the first weeks of the new Parliament.

Seven problem areas

In response to the question by the chair, DG  Morotua listed DoL’s main “challenges” as unemployment and under employment; the changing nature of work in the country; inequalities and unfair discrimination in the workplace; domestic and cross border labour migration; inadequate instruments for constant performance; monitoring and evaluation of labour market and completing programmes to determine impact of such on the economy.

During the DoL briefing, Bheki Maduna, in charge of finance at DOL, re-confirmed to parliamentarians that for 2013/14 the department received a total of R2.4bn whilst the current appropriation before them for 2014/15 had been increased to R2.5bn.

He said that in the last year, 95% of the budget for administration was spent and also 97% of the inspection and enforcement services budget. Funding “challenges” ahead would be the implementation of the new Employment Services Act; the funding of the new office of chief information officer; new ministerial offices and positions; and the general rising costs of inspection and enforcement generally.

Minimum wages question

In a subsequent meeting of the same committee, when approving the passage of the budget vote to National Assembly (NA), the EFF took the opportunity to make a proposal calling for the introduction of minimum wages in all workplaces, including a wage of R12 500 for mine workers.  A second proposal was made by EFF calling for new labour laws to be amended so that labour broking was scrapped in entirety.

There was overwhelming agreement by members not to debate such changes.

However, in the same meeting, the committee called upon DoL to immediately expedite the process of building the DoL communications technology capacity and investigate the possibility of using the reserves of the unemployment insurance fund (UIF) to improve on benefits payable to UIF beneficiaries and to increase the period over which payments were made, particularly maternity benefits.

Subsequently when the DOL budget vote came before the NA, labour minister, Mildred Oliphant brought the House up to date on the DoL legislative programme.

Labour law amendments

She stated that amendments to the Compensation for Occupational Injuries and Diseases Act were in final draft stage but the questions of rehabilitation, re-integration and return to work were awaiting consultation with stakeholders.

She announced that the Basic Conditions of Employment Act would be amended regarding the issue of inspection and enforcement, confirming DOL’s earlier statement to the portfolio committee that additional budget would be required in this area.

All new regulations to the Employment Equity Act had been finalised, she said, publication being awaited; the Unemployment Insurance Act was to be amended and that these changes related to improvements of benefits and the submission of information by employers to the unemployment fund; and amendments to the Occupational Health and Safety Act were necessary because of the shortcomings in the way that health and safety was being regulated in the country.

Other articles in this category or as background
http://parlyreportsa.co.za//labour/labour-relations-act-changes-passed/
http://parlyreportsa.co.za//cabinetpresidential/parliament-delays-process-on-labour-relations-bill/
http://parlyreportsa.co.za//bee/rumblings-in-labour-circles-on-bee/
http://parlyreportsa.co.za//bee/dates-for-new-labour-law-amendments-outlined/

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Protected Disclosures Act: More whistleblower cover

Act to cover workers and state employees…

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

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

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

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

Civil and criminal liability

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

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

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

Employee safeguards

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

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

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Labour Relations Act changes passed

LRA Bill through Parliament

Mildred OliphantThe Labour Relations Amendment (LRA) Bill has now been passed by the National Assembly, thus confirming the ambition of Minister of Labour, Mildred Oliphant, to have this and the Basic Conditions of Employment Amendment Bill (BCEA) as signed-off legislation before the last session of Parliament of the present government. The Bill received the concurrence from the NCOP, in this case the matter being considered a formality although the select committee involved called for submissions.

Two down, two to go and more to come

This leaves the two equity labour laws, the Employment Services Bill and the Employment Equity Amendment Bill, as part of four Bills approved by the Nedlac process and designed by the department of labour (DOL) to overhaul labour legislation in South Africa, to be finally approved in the last session.

The LRA changes in the meanwhile will enable legislation to address, DOL says, “a number of unfair labour practices” with minister Oliphant telling the House that the Bill now passed “will bring the provisions relating to child labour in line with international standards and will strengthen the mechanisms for enforcement of basic conditions of employment, including wages.”

Ballots and part timers

The new Act will alter the anchor Labour Relations Act (1995) to include a number of major amendments including the facilitation of the granting of organisational rights to trade unions that are “sufficiently representative” and, in addition, will require a trade union or any employers’ organisation to conduct a ballot prior to calling a strike or lock-out.

The new provisions will strengthen the status of picketing rules and agreements and in many instances the powers of the labour court are clarified. They will also determine and outline minimum service conditions deal with circumstances involving workers placed by temporary employment services, regulates on the employment of fixed-term contracts and deals with part-time employees earning below an earnings threshold.

UIF also involved

DOL has also tabled amendments to Unemployment Insurance Act to include foreign workers and public servants as well as to amend benefits by extending the period of payment of benefits to the contributor from eight months to twelve months and also extending the period in which a contributor can lodge a claim from the current six months to twelve months. Nomination of beneficiaries for death benefits will be possible and the fund itself will be allowed to finance its own employment promotion projects.

Under the occupational health aspect of DOL’s mandate, a Bill has been promised on the issue of noise pollution levels in the factory environment.

previous articles on this subject
http://parlyreportsa.co.za//cabinetpresidential/parliament-delays-process-on-labour-relations-bill/
http://parlyreportsa.co.za//education/employment-services-bill-will-promote-jobs-and-free-employment-services/
http://parlyreportsa.co.za//bee/dates-for-new-labour-law-amendments-outlined/

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Labour : nobody at top biting the bullet

Parliamentary labour committee gives hint…..

mildred-oliphantLabour Minister Mildred Oliphant said in her budget vote speech that she would meet with the trade union leadership to discuss the “adversarial nature” of the country’s industrial relations and explore ways to arrest the “potential threat” to the system of collective bargaining. With the Nedlac process under scrutiny, South Africa heads towards an election with a Parliament not quite sure what is really happening.

Meanwhile, after months of painstaking negotiations and re-drafting of South Africa’s new labour laws and with the amendments under the Labour Relations Act nearing finalisation and adoption, suddenly an adversarial attitude was also adopted by the governing alliance members over contentious and much argued about issues such as labour broking.

So, with attitudes hardening, business has again lost track of indicators regarding government’s views on labour matters. A swing to the left was previously the concern but as political commentators now note, a swing to the nationalistic right is even more worrying.

What relevance then her speech?

Minister Oliphant  also said in her address that her department would host a labour relations indaba to enable stakeholders and role-players to engage regarding the future of collective bargaining in South Africa but a reading of recent parliamentary views stated by ANC MPs would change the ground rules for such an engagement yet again. Quite clearly, with an election forthcoming, the pack of cards has suddenly been thrown into the air. Oliphant continued…….

“We want to generate greater interests and concerns of social partners in respect of labour relations conflict, and identify measures to strengthen labour relations and dialogue to achieve labour market stability and peace,”  adding that the department of labour (DoL) was working closely with NEDLAC and the CCMA to achieve this.

Smoky glass

The minister noted that her budget vote took place at a critical time, when South Africa was entering the collective bargaining season, which seemed a pretty pointless thing to say and then compounded the totally inert contribution by adding that “Looking at the year ahead, that all stakeholders will  have to work together to achieve a peaceful environment in labour relations and collective bargaining.”

Finance waves a finger at somebody

pravon gordhanShortly afterwards when introducing the debate on his budget vote in the National Assembly, finance minister Pravin Gordhan said South Africa “was at a cross-roads over renewed labour unrest in the mining sector” and something needed to be done or the country would lose jobs and investor confidence, and companies would close. ‘

In his medium term budget statement, he was at pains to re-assure the investing community that budget deficits were under control and that SA was walking the big talk. But there was no reference to the big issue. A bloated public service, way out of proportion to the size of the community in South Africa, has a  pay rise coming.  This is more than a bump in the road head, it massive pothole to be negotiated.

“Concerted action by organised labour, business, civic leaders, and government is needed in the coming months , said the minister. “There is no role for complacency here”, he warned. Gordhan reiterated that labour unrest and stoppages at mines contributed “to much of the weaker economic performance in 2012”, which was compounded by job growth of only one percent.

“We are all in this together. If we do not resolve our labour relations challenges we will be losers. We will see deteriorating confidence, job losses, and business failures.”

Finding sensible solutions, Gordhan said, to the labour strife would benefit all. “But if we find a balanced, fair, socially responsible solution, we all stand to gain and we will see higher investment, higher employment, and improvements in living conditions. This is the choice that lies before us.”

Misfire, or was it?

zuma2Then spoke President Zuma in a special extra parliamentary speech from Pretoria, who also called on mining participants in the wage talks to play a stronger role, saying government could not take sides in the turf war between unions. His continued reference to the minister of finance’s speech earlier in Parliament was the anchor point of what he had to say, which it turned out to be very little.

In the meanwhile, minister in the presidency responsible for performance monitoring and evaluation, Collins Chabane, told parliamentarians in his budget vote speech that the National Development Plan (NDP), endorsed by COSATU or not, would form the basis of strategic framework for the next five years for government focus, the NDP forming the basis of nearly twenty budget votes speeches in Parliament in the last three weeks.

The apparent focus by government on the NDP and COSATU’s renewed platform of referring back to the Freedom Charter, was also evident during a speech by Trevor Manuel, minister of planning and one of the main architects of the NDP, who told his audience “We should guard against be waylaid by all manner of self-serving agendas that direct us away from building the desirable plan”.

VaviMeanwhile, Zwelinzima Vavi, general secretary of COSATU, told his audience, “Four out of ten people are unemployed and 19 years after democracy, we have become the protest centre of the world, a country still far from achieving the economic demands of the Freedom Charter.” He told his audience there was a lot to celebrate but all COSATU wanted was for the wealth of the country to be shared.

No mention of the NDP. Nobody stepping to the footplate.

To-ing and fro-ing on labour issues appears to be average activity for politicians, including the President, and at the moment, with nobody sticking their heads over the parapet, Parliament heads towards an election with business sitting in a vacuum and the international rating bodies not quite are what we are up to .

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Employment Services Bill to promote jobs, free employment services

Labour broking debate continues

A new Bill has been tabled in Parliament called the Employment Services Bill which aims to regulate in the area of employment services, regulating and providing for registration of private employment agencies. One of the aims of the Bill is to provide “comprehensive and integrated free public employment services” and to “establish schemes to promote the employment of young job seekers and other vulnerable persons”.

The government gazette, in describing the Bill’s purpose, says the legislation has been designed to regulate for and facilitate the employment of foreign nationals into areas “where they are needed ….and does not impact adversely on existing labour standards or the rights and expectations of South African workers”.  The Bill has been tabled by the minister of labour.

An “employment services board” is to be established to “promote employment, growth and workplace productivity” and “give effect to the right to fair labour practices contemplated in section 23 of the Constitution.”

Constitutional concerns

In terms of the Bill, schemes to assist employees in enterprises in distress and therefore to retain employment, will be undertaken and efforts made to “improve the employment and re-employment prospects of employees facing retrenchments.”

The Bill comes at a time when the furore over “labour broking”, whatever that might mean to different parties, is slowly subsiding and a more pragmatic approach appears to be the route rather than outright banning of short term work opportunities through agencies or “brokers”.

Nevertheless, the proposed legislation covers many more aspects than simply that issue. Hearings will take place once Parliament re-assembles in the New Year.

The new proposed legislation states that private employment agencies will be prohibited from “charging work seekers any fees for services rendered, unless the minister permits such fees for specific categories or specialised services” and they will be prohibited from “making deductions from employees’ remuneration”.

Private employment agencies must keep and safeguard the confidentiality of information relating to work seekers, the Bill warns, and “the labour court will be empowered to impose fines for breaches of the act”.

In the preamble, the Bill states that its purpose is to improve access to the labour market for work seekers and “facilitate access to training for work seekers, in particular, vulnerable work seekers.”

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

Brief on new draft energy and electricity bills

The director general of the energy department, Nelisiwe Magubane, has now briefed Parliament on the impending tabling of both the National Energy Regulator Amendment Bill and the Electricity Regulation Amendment Bill which, according Magubane will beef up NERSA giving it the regulatory power to control “the entire energy space”.

She told the parliamentary committee on energy that that an independent appeal board headed up by a judge would replace the existing tribunal so that NERSA did not have to play both judge and jury in regulatory matters, where a decision on tariffs or regulatory procedures were involved. Appeals would therefore conducted in a fairer environment.

Both bills have been the subject of public comment and it remains to be seen what the final Bills tabled before Parliament look like. On electricity, much involves independent power producers (IPPs) and may sort out the anomalies that exist in the procurement of land for power line erection and the difficult liaison with the department of public works over such issues.

As far as the Energy Regulator Act (ERA) is concerned, the amendments proposed to parliamentarians were stated as being designed to “improve the credibility of the decision making process by establishing an appeals board; to improve the governance and accountability of the board and to improve the working relations amongst regulator members.”

The department of energy said that the energy sector had to be regulated more effectively “given the current need that has now arisen to increase private sector participation”.

Present at the briefing were officials of NERSA who also claimed, as did the department, that both new Bills would enable them to have the ability to work in a less fragmented environment with not so many departments having regulatory control over different issues.

NERSA at no stage discussed matters relating to fuel pricing and neither did the department. Further meetings are to follow.

Posted in Cabinet,Presidential, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Labour, Land,Agriculture, Mining, beneficiation, Trade & Industry0 Comments

New fuel pipeline will come at a cost

Brian Molefe, CEO of Transnet, told his audience at opening of the 550 kilometre multi-product fuel pipeline between Durban and Johannesburg that the cost of the new installation “will have to be recovered”.

In his opinion, the new pipeline “was one of the most cutting-edge and innovative infrastructure investments in the world”, the cost involved being given at R23.4bn at this stage, he said. It is understood that Transnet has applied to NERSA for a further 22% increase in tariff charges for the coming year, according to reports.

Last year’s tariff increase for fuel pumped is understood to have been just short of 60%. January 2012 has seen the new installation working alongside the older pipeline but the new line is only configured for diesel at this stage, with limited pumping facilities along its length.

Coming on top of a recent 43c per litre fuel price increase and the minister’s November call for “an audit” into refinery shortages, both fuel and electricity supply problems would seem to be moving in the same dismal direction leaving government and suppliers further apart.

On an up-beat note, Molefe told his audience that “the state-of-the-art pipeline” would also transport 93 and 95 octane petrol, low sulphur and ultralow sulphur diesel and jet fuel at a rate of “about three-million litres an hour”.  He said that eventually the capacity of the line was expected to be in the region of 26.7-billion litres of fuel a year.

Transnet pipelines head Charl Möller said the new pipeline would be upgraded in five phases up to 2032 as more pumping stations and metering points were added.

Posted in Cabinet,Presidential, Energy, Finance, economic, Fuel,oil,renewables, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Trade & Industry, Transport0 Comments

Davies to re-introduce his ailing BEE

Following the gazetting of a draft Broad-Based Black Economic Empowerment Amendment Bill in December 2011 for comment (60 days), trade and industry minister, Rob Davies, has recently indicated his view that the planned  amendments to BBBEE legislation would “seek to strengthen access to procurement opportunities and to assist with black enterprise development.”

He also indicated in his statement that fronting was a practice that had to be eliminated and penalties for non-compliance as far as regulations were concerned would be introduced in the legislation, which included jail sentences. How this would relate to the Liquid Fuels Charter is not clear. . In terms of the draft BBBEE Act Amendment Bill, the cabinet statement set out the proposed amendments, some of which included amendments including the penalties mentioned for non-compliance in terms of enterprise development, or lack of it, fronting and procurement elements not complied with in terms of the BBBEE scorecard.

Definitions of what is termed as fronting are given in order that legislation may apply and the appropriate regulations enforced. On this issue, much was passed on by minister of energy, Dipuo Peters from the energy conference in November 2011.   Minister Davies said that more emphasis was to be placed on enterprise development and procurement within key sectors, in terms of both the IPAP and new growth path plans. Incentives were to be created for broad based black ownership and the use of such tools as employee share ownership, co-operatives and community ownership.

Relevance to the Employment Equity Act was an important factor, Minister Davies said, as was aligning skills requirements to current and new skills development strategies involved in the new growth path and elsewhere. Targets for this, for procurement matters and enterprise development had to be “adjusted” accordingly, he said.

Meanwhile, Minister Dipuo Peters also welcomed the BBBEE legislation as contributing towards the objectives of the liquid fuels charter. Challenges facing her department were irregular monitoring of compliance, pockets of poor performance within the value chain and lack of financially sound BEE deals, she said late last year.

She also added that her department was looking at ways to strengthen liquid fuels strategic stocks to cover any emergencies that might arise.

She advised the media in November the compliance report on the liquid fuels charter had been submitted to the cabinet for approval. At the time, she expressed her view that current shareholding was not spread uniformly across the value chain and total assets spread in line with demographics, noting that whilst technical issues such as access to storage facilities was a significant problem. In general, she complained that the participation of women, procurement and enterprise development lagged behind targets.

She also added that her department was looking at ways to strengthen liquid fuels strategic stocks to cover any emergencies that might arise. Her recent comments on the new BBBEE legislation were made in the light of Minister Davies announcement.

Reference to both BBBEE legislation and the Liquid Fuels Charter is expected to come up in President Zuma’s address to the nation.

Posted in Cabinet,Presidential, Education, Electricity, Energy, Finance, economic, Fuel,oil,renewables, Health, Justice, constitutional, Labour, Land,Agriculture, Mining, beneficiation, Public utilities, Security,police,defence, Trade & Industry, Transport0 Comments


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