National Small Enterprise A/B: DSBD briefing; Tabling of Correspondence from provinces; Committee 1st Term Programme, with Minister

Meeting report

The Chairperson inquired about the Members present. The Committee Secretary confirmed the Members present, including Members from provincial legislatures.

He then proceeded to formally open the meeting and welcomed Members, the Minister for Small Business Development, and colleagues from various provincial legislatures. Additionally, he extended a welcome to the Committee staff, Parliament staff, representatives from the Department of Small Business Development (DSBD), and officials from related entities. He acknowledged the compliments of 2024 and noted that this was the second meeting of the Select Committee for the day. The Chairperson then invited the Minister to deliver opening remarks, after which the Committee would receive a briefing.

The Chairperson informed Members that questions for clarity would be welcomed from Select Committee Members and Members of the Provincial Legislatures. The Committee Secretary would also present a briefing programme for the provinces. Notably, Gauteng had requested to be part of the current meeting instead of having a separate briefing.

The Chairperson mentioned that other provinces had provided dates for separate briefings and a letter from the Western Cape Provincial Parliament, addressed to the Chairperson of the National Council of Provinces (NCOP), was acknowledged. The Chairperson directed that the Committee Secretary would read the letter towards the end of the meeting, followed by a discussion among the NCOP Committee Members regarding its content and the way forward.

Opening Remarks by the Minister

Ms Stella Ndabeni-Abrahams, Minister of Small Business Development, began by acknowledging the unfortunate start to the year with the passing of Ms Violet Siwela, a Chairperson of the Portfolio Committee on Small Business Development , who had played a significant role in advancing the small business development agenda. The Minister praised Ms Siwela's leadership and commitment to the enterprise ecosystem, noting her efforts to engage stakeholders nationwide to ensure the success of relevant legislation.

She stressed the importance of continuing Ms Siwela's work, particularly in unlocking the potential of SMMEs and cooperatives for economic growth and inclusion. The Minister highlighted the need to finalise the National Small Enterprise Amendment Bill, emphasising the Committee's role in the consultation process required for this legislative step.

The Minister then outlined key provisions of the Bill, focusing on the integration of support agencies, the establishment of a one-stop shop for small enterprise development and finance, and measures to address unfair trading practices. She clarified that the Bill aimed to streamline support services and empower MSMEs and cooperatives to thrive in a fair business environment.

Addressing concerns about Ministerial powers, the Minister reassured the Committee that checks and balances were in place to regulate the declaration of unfair trading practices. She underscored the importance of establishing the Office of the Small Enterprise Ombuds as a means of ensuring accountability and addressing issues such as late payments and unfair business practices.

The Minister concluded by urging collaboration to expedite the passing of the Bill, emphasising its significance in addressing economic challenges and promoting entrepreneurship. She thanked the Committee for its attention and invited the Department's Acting Director-General (DG) to present further details on the Bill.

The Chairperson expressed gratitude for the opening remarks and then addressed Members, informing them of network issues that had caused him to be disconnected earlier in the day. He requested that if he were to experience further disconnections, Mr Mmoiemang should take charge of leading the meeting and asked Mr Mmoiemang to be prepared for such a scenario. The Chairperson then proceeded to hand over control to the Acting DG, Ms Manzini.

Presentation of the National Small Enterprise Amendment Bill 2023

Ms Thulisile Manzini, Acting Director-General, Department of Small Business Development (DSBD), proceeded with the presentation, indicating that the Minister had provided comprehensive background information on the purpose of the meeting earlier. She outlined the presentation's structure, covering the objectives of the National Small Enterprise Amendment Bill 2023, the establishment of new entities, the Office of the Small Enterprise Ombud Services, fair trading practices, the definition of small enterprises, and proposed amendments.

She explained that the Bill aimed to amend the National Small Enterprise Act of 1996 to establish and register the Small Enterprise Development Finance Agency and incorporate it into the Small Enterprise Financing Agency. Additionally, it sought to establish the Office of the Small Enterprise Ombud Services to address disputes and non-payment issues small enterprises face.

Ms Manzini detailed the functions and powers of the proposed Office of the Small Enterprise Ombud Services, emphasising its role in providing affordable access to justice mechanisms for small enterprises and the Bill's provisions for fair trading practices, which empowered the Minister to declare certain practices as unfair.

Furthermore, she discussed proposed changes to the definition of small enterprises, aiming to simplify classification and align with international best practices. Amendments to Section 20, Subsection 2 of the Act were also proposed for clarity.

Ms Manzini concluded by outlining the legislative process, including public hearings and the National Assembly's consideration of the Bill. She recommended that the Select Committee notes and considers the Bill for tabling at the NCOP for concurrence.

See attached for full presentation

Discussion

Mr T Dodovu (ANC, North West) questioned the definition of small enterprises, particularly foreigners and non-foreigners, with a specific focus on township economies. He requested clarification on whether there were any specific definitions or considerations for these groups within the Bill.

Mr J Londt (DA, Western Cape) began by raising concerns about the challenge of conducting public participation for multiple pieces of legislation, noting that while sending legislation to different Select Committees in provinces is standard practice, it puts a strain on a small number of people responsible for public engagement. He highlighted the risk of rushing legislation through without adequate public participation, which could lead to bottlenecks and wasted resources. Mr Londt pointed out that some Bills are being addressed in a single sitting, which he deemed potentially unconstitutional.

He also referenced previous discussions in the Committee about concerns regarding the powers granted to the Minister to determine unfair trading practices, emphasising the need for clear guidelines to prevent potential prejudice against certain sectors or individuals due to interpretation discrepancies.

Mr Londt urged for clarity and adherence to proper procedures to avoid wasting time and resources and ensure effective public participation in the legislative process. He requested clarification on these issues before any further questions were raised.

Mr P Govender (IFP, KZN Legislature) thanked the Department for the comprehensive presentation. He mentioned that Mr Londt had already addressed his initial question regarding timeframes. However, he wished to delve deeper into that topic.

Mr Govender welcomed the establishment of the Office of the Ombudsman and recognised its potential value in assisting SMMEs. He sought clarification on two points: Firstly, how the Ombudsman would be identified, and secondly, how the office would be funded, particularly in terms of staffing and financing.

He emphasised the importance of understanding the logistics and financial arrangements for the Office of the Ombudsman to ensure its effective operation in supporting SMMEs.

Mr M Dangor (ANC, Gauteng) thanked the Chairperson and extended New Year greetings to all attendees, expressing hopes for a successful year ahead. He suggested setting aside the discussion on process and focusing solely on the substance of the Bill for the time being.

Mr Dangor then posed a question regarding the provisions of the Bill for the establishment of small cooperatives that have the potential to grow. He sought clarification on whether the Bill includes any provisions specifically aimed at facilitating the establishment and growth of such cooperatives.

Mr M Mmoiemang (ANC, Northern Cape) appreciated the briefing by the Minister and emphasised the importance of reviewing and amending various pieces of legislation, particularly in areas where clarity is needed, such as the role assigned to the Minister and the definitions of small enterprises. He requested examples of practices that would constitute unfair trading practices. He inquired about why the National Empowerment Fund (NEF) was not considered in the Bill, suggesting that it might be beneficial to merge it with the Small Enterprise Development Agency.

Mr Mmoiemang sought clarification on a sentence in Section 20 of the presentation related to a Constitutional Court judgment and requested further explanation from the DG. He highlighted the potential role of the Office of the Ombudsman in mitigating disputes for small enterprises. He stressed the importance of leveraging technology to reach remote areas and simplify processes for entrepreneurs.

He stated that he was satisfied with the presentation and thanked the Chairperson.

Ms S Nkosi-Malobane (ANC, GPL) expressed her gratitude and apologised for the earlier mishap. She raised two main points for consideration. Firstly, she addressed the issue of public participation, highlighting the challenges legislators face in conducting public engagement, particularly amidst election periods. She emphasised the importance of monitoring public participation activities to ensure they do not deviate into election-related events. Additionally, she suggested incorporating insights from previous public engagements, such as those related to the Township Economic Bill, into the current legislative process.

Secondly, Ms Nkosi-Malobane focused on the protection of South African citizens engaged in economic activities, particularly in townships. She expressed concern about foreign nationals dominating certain economic sectors, potentially at the expense of local residents. She advocated for enforceable laws to prioritise South African citizens in economic opportunities and cited examples of international agreements impacting local industries (fashion), such as agreements with China.

Mr J Kanyane (ANC, GPL) expressed satisfaction with the content of the Bill but raised concerns regarding the method of sourcing information from the public, particularly through public hearings. He highlighted that Gauteng has adopted a hybrid approach, utilising both public hearings and written submissions for public participation. However, due to various political commitments, they are leaning towards prioritising written submissions over public hearings.

Mr Kanyane sought clarity and guidance on whether prioritising written submissions would compromise the Section 76 process. He emphasised the importance of ensuring that the chosen method aligns with the requirements of Section 76 to maintain the integrity of the process. He indicated the need for clarity and guidance before the Committee’s upcoming meeting on Thursday, where it would revisit its team programme and define its methodology clearly. Mr Kanyane emphasised the importance of obtaining necessary information while ensuring that the approach to public participation adheres to legislative requirements.

The Chairperson clarified that the focus of the discussion should be on questions related directly to the content of the Bill itself, rather than on procedural matters, which fall within the purview of Parliament's processes. The Chairperson handed over to the Minister, the Director-General, and other officials of the Department and entities to respond to questions specifically concerning the Bill.

Responses

The Minister clarified the provisions in the Bill related to unfair trading practices, emphasising that the powers granted to the Minister are clearly defined and aimed at protecting small enterprises from unfair practices by larger entities. She highlighted specific clauses in the Bill that outline the Minister's responsibilities and the consultation process required before any actions are taken.

She further explained that the Bill focuses on licensing requirements for all individuals engaged in legal trade within South Africa, regardless of Nationality. She emphasised that the Constitution prohibits discrimination against legally operating businesses based on Nationality.

The Minister will appoint the Ombuds person in accordance with public service regulations and funding for the office will be provided by the Department to ensure assistance to SMMEs and cooperatives facing legal challenges.

The Minister discussed consolidating agencies into a single entity to provide comprehensive support to SMMEs and cooperatives. She explained that while some agencies, such as the Cooperative Bank Development Agency, are currently under different Departments, efforts are being made to streamline support services for small businesses.

The Minister reiterated the importance of passing the Bill promptly to address the challenges faced by SMMEs and cooperatives. She highlighted upcoming legislation, including the Business Licensing Amendment Bill and the Public Procurement Bill, aimed at further supporting small businesses and promoting economic transformation.

The Chairperson thanked the Minister for her responses and invited any further questions from Members specifically related to the presentation or the Bill itself, excluding procedural matters which would be addressed later. Not receiving any additional questions, the Chairperson reiterated that deliberations would occur at a later stage in provincial committees and the Select Committee, allowing for public input.

The Chairperson then called on Ms Grace Dinizulu to outline the legislative process, including addressing correspondence from the Western Cape Legislature and other procedural matters.

Committee Matters

Public Hearings Schedule

Ms Grace Dinizulu, the Committee Secretariat, provided an update on the dates for the briefings and public hearings from various provinces. This information was provided to the Chairperson and Members for further deliberations.

Here are the details:

• Eastern Cape: Briefing on 9 February 2024, from 11:00 to 13:00, followed by public hearings from 14:00 onwards, both virtual.
• Gauteng: Already met jointly.
• Limpopo: Meeting on 13 February 2024, from 18:00, virtual.
• Mpumalanga: Meeting on 09 February 2024, from 17:00, virtual.
• North West Province: Meeting on 23 February 2024, virtual.
• Northern Cape: They met to discuss the briefing date, and further information will be provided.
• KwaZulu-Natal (KZN): Meeting on 9 February 2024, time not specified.
• Western Cape: The date has not been submitted yet

Mr N Maneng (ANC, NCPL) confirmed that the Committee had a programme meeting earlier and that everyone had agreed on the proposed Bills and committed to forwarding the correct dates to the Committee. He assured the Select Committee that they were on board with the process.

Western Cape correspondence

The letter from the Western Cape Provincial Parliament conveyed concern regarding the short timelines for processing Section 76 Bills, notably the Public Procurement Bill and the National Small Enterprise Amendment Bill. The Speaker (WCPP) proposed that the NCOP Select Committees reassess their schedules to provide more time for legislatures to handle the Bills and conduct public participation. Further, she recommended moving the consideration dates to the second week of April 2024 to facilitate this extended timeline. Stressing the significance of meaningful participation in the legislative process, the letter urged the NCOP to respond by 02 February 2024.

Legislative Programme

She moved to read the programme which is as follows:

• 09 February 2024 and 16 February 2024: Provincial briefings.
• 20 February 2024: Public hearings on Companies Amendment Bills from 09:00 to 13:00, followed by a plenary session from 14:00 to 17:00, and another public hearing session from 18:30 to 20:00.
• 21 February 2024: Public hearings on the National Small Enterprise Amendment Bill at 15:00.
• 22 February 2024: Reception of Department of Small Business responses to written or oral submissions on the National Small Enterprise Amendment Bill at 18:00.
• 27 February 2024: Continuation of public hearings on Companies Amendment Bills from 09:00 to 13:00 and from 18:00 to 20:00.
• 05 March 2024: Departmental responses to stakeholder issues raised during public hearings on Companies Amendment Bill from 15:00 to 18:30.
• 06 March 2024: Consideration of negotiating mandates on the National Small Enterprise Amendment Bill from 18:00 to 20:00.
• 12 March 2024: Deliberations on Companies Amendment Bills from 09:00 to 13:00, followed by consideration of final mandates on the National Small Enterprise Amendment Bill from 15:00 to 17:30.
• 19 March 2024: Finalization of the Companies Amendment Bill from 09:00 to 13:00.
• 26 March 2024: Consideration and adoption of the Committee's annual reports and legacy report for the 6th Parliament from 09:00 to 13:00.
• 02 April 2024: Constituency period.

The Chairperson emphasised the need to amend the programme to align with the legislative cycle, which requires at least an 8-week timeframe to process Bills. He clarified that the legislative process begins now, and provinces should submit their mandates by the end of March to adhere to this cycle. Any requests for extensions due to the substance of the Bill should be directed to the Chairperson of the NCOP. The Chairperson stressed the importance of following the rules and ensuring that the process remains in line with the legislative cycle.

Mr Dangor supported the suggestion for the Committee to endorse the request for an extension to accommodate the eight-week legislative cycle.

Mr Mmoiemang expressed his support for considering the eight-week legislative cycle and suggested that the Western Cape Legislature reevaluate its request for an extension until April. He emphasised the importance of processing the Bill within the eight-week timeframe to ensure adequate public participation.

Mr Kanyane expressed gratitude for the clarification provided by the Chairperson. He emphasised the importance of the request being based on the substance of the matter rather than political considerations. He also acknowledged the flexibility provided by the extension and indicated that Gauteng would need to revisit its team programme in light of the concurrent proceedings.

The Chairperson stressed the need to accommodate the eight-week legislative cycle of the NCOP. He explained that negotiating and final mandates would fall within this period, with any extension requests going to the NCOP Chairperson. Regarding a previous letter from the Western Cape Legislature, he mentioned consulting with other provinces and promised a response. He noted the North West's indication to process the Bill and decided to refer the matter to the Committee for discussion. Finally, he mentioned attaching the amended programme for circulation to all provinces, including the Western Cape Provincial Parliament and then asked for the legal team’s opinion.

Ms Telana Halley-Starkey, Parliamentary Legal Advisor, introduced herself and mentioned her role in assisting the Committee with the Bill. She expressed no issues with the programme but suggested adding legal services to the responses scheduled for 22 March 2024. This addition would allow legal services to address any legal and constitutional issues arising from public hearings or mandates.

The Chairperson suggested that Ms Halley-Starkey work closely with the Committee Secretary on the reworked programme, starting from the evening of this meeting. The reworked programme will be submitted to the Chairperson of the NCOP and circulated to the WCPP. The Chairperson then asked if there were any further comments from members before adjourning the meeting.

Mr Mmoiemang reminded Members to attend the sister committee meeting tomorrow morning, where the C-list of the Expropriation Bill will be adopted.

The Chairperson thanked Members of the Select Committee and reminded them about the meeting scheduled for the following day. Then, the Chairperson asked if the Minister had any closing remarks.

Closing remarks by the Minister

The Minister thanked the Chairperson and all Members for their dedication and contributions. She stated the importance of doing justice to the constituency that the Members of Parliament serve, even amidst upcoming elections. The Minister pledged continued support and commitment to the work ahead, acknowledging the importance of collaboration with the Select Committee.

The Chairperson concluded the meeting by thanking the Minister and all participants. He reminded everyone to make officials available for the briefings starting on 9 February 2024, which will likely be virtual.

The Chairperson expressed appreciation to the Select Committee Members and attendees from provincial legislatures, and the meeting was officially adjourned.