Legacy Reports: Economic Development and Trade and Industry

This premium content has been made freely available

Trade, Industry and Competition

28 August 2019
Chairperson: Mr D Nkosi (ANC)
Share this page:

Meeting Summary

Legacy Reports

The Committee was briefed on the Legacy Reports of the Economic Development and Trade and Industry in the Fifth Parliament. The reports highlighted the activities undertaken by both committees, and suggested recommendations to the Committee.  Members were reminded that as the Department of Economic Development was merging with the Department of Trade and Industry, the Committee would have to follow up on matters indicated by the previous Portfolio Committee on Economic Development as well matters from the previous Committee on Trade and Industry.

The committee support staff indicated that the Committee’s work was fairly complex as the Department of Trade and Industry had eight Programmes covering 42 Acts, 13 entities as well as the B-BEE Commission, various statutory bodies and over 100 international agreements. The Department was the lead department for Industrial Development, Regulation, Broadening Participation and Trade, Investment and Exports but many other departments were also involved. Two of the big entities inherited from Economic Development was the Industrial Development Corporation and the Competition Commission, and the Committee would have to follow up on the Industrial Development Corporation’s Shiva Uranium Mine court case against Oakbay Resources and possibility of recovering the R250 million capital and interest owed. The Committee also had to follow-up on the proposed merger of the National Empowerment Fund with the Industrial Development Corporation. The Competition Commission and the Competition Tribunal also required attention following the amended Competition Act of 2018, in terms of the Tribunal’s capacity to deal with the increased case load, and the complexity of cases, possibly affecting turnaround times, as well as its financial sustainability.

It would important to continue ongoing monitoring of compliance with local procurement and, in particular, the verification of local content by the South Africa Bureau of Standards, the Auditor-General and government procurement. The Committee had to monitor the review of the Sugar Act and consider the socio-economic impact of the sugar levy, especially on emerging black cane farmers. The implementation of the South Africa Bureau of Standards turnaround plan demanded close attention.

As far as the area of Trade, Investment and Exports was concerned, future work included monitoring the impact of the withdrawal of the United Kingdom and Northern Ireland from the European Union (BREXIT) on South Africa’s trading relationships with the United Kingdom and with the European Union. It was also necessary to monitor the outcomes of the negotiations to finalise the Annexes and Appendices of the Tripartite Free Trade Area and the Continental Free Trade Area, as well as the future negotiations for Phase 2 of those agreements. Public hearings had to be held on the impact of the implementation of existing trade agreements on industry.

The Committee should consider whether the B-BBEE Commission should be listed and ensure that it found a solution to ensure its effective functioning. The implementation of the National Credit Amendment Act (No. 7 of 2019) had to be overseen, and the impact of the Bill on the credit market had to be monitored. The Committee should request the Department of Trade and Industry to review the Consumer Protection Act (No. 68 of 2008) and it would have to follow up on the Copyright Amendment Bill and the Performers’ Protection Amendment Bill.

The Chairperson announced that those issues extracted from the legacy reports would be included in the Committee’s programme for the rest of the calendar year. When entities or departments presented to the Committee, Members would pay particular attention to the implementation of the various issues.

Members determined the need for a strategic planning session to be able to address Members’ issues as well as the expectations of the Committee. The Committee needed to work against a plan that would fulfil its obligations as well as Members’ particular concerns.

Meeting report

Opening remarks
The Chairperson welcomed everyone to the meeting. He explained that he would begin with the Committee business and then move on to the legacy reports which would be presented by the Content Advisor.

Committee Business
The Committee Secretary indicated that there would have to be a change to the Committee programme because dti senior officials would be in London addressing the trade agreements in preparation for Brexit on 3 September 2019. Consequently, the meeting scheduled for 3 September would be postponed to 11 September 2019.

The Committee Secretary explained that industrial policy training had been scheduled for 30 August 2019, but Members had indicated challenges with that date, including the fact that the Women’s Parliament was scheduled for the same date. Prof Black from the University of Cape Town, who was an expert on industrial policy, could not offer training on any day except a Friday. He was therefore proposing that the training on industrial policy be held on 20 September 2019.

The Committee Secretary added that Members should note that the Portfolio Committee on Trade and Industry was one of four Committees designated as a Group C Committee, which meant that the regular days for meetings were Tuesdays, Wednesdays and Fridays. The Committee could not ask for permission to work on a Thursday if it were not working on the Friday.

The Chairperson reiterated that the 3 September programme had been moved to 11 September 2019. He asked the Secretary to amend the programme and send it to Members.

Ms J Hermans (ANC) asked what would happen to the report on NRCS and SABS and the Public Protector Report that was on the programme for that day.

The Committee Secretary replied that, given the fact that the programme was so short that term, the presentations would have to be moved to a date in the following Quarter. The Public Protector report had been referred to the Committee and, therefore, it had to consider the report.

The Chairperson asked for consensus on the position that the programme would be amended to accommodate dti on 11 September and that there would be no meeting for the Committee on 3 September 2019.

There was consensus.

The Committee Secretary added that the second point was to schedule the industrial policy training for 20 September 2019.

The Chairperson asked if Committee Members were comfortable with 20 September as Prof Black was available on that date.

Ms Hermans stated that the 20 September 2019 was a difficult day because that was the date on which schools closed and it was very difficult for the mothers in the Committee. Perhaps the training date could be moved to 13 September 2019.

The Secretary replied that he could check whether Prof Black was available on 13 September 2019.

Mr S Mbuyane (ANC) requested that the training be held on a date other than 13 September. That day was a problem because Members would be in Parliament on 6 September and would not be going home that weekend. Members could not spend two weekends away from home. He explained that it was problematic for some Members to meet on a Friday as there was only one flight home on a Friday morning, and it was difficult to catch a flight on a Saturday.

The Chairperson stated that he did not want Members to miss the training, but he agreed that the Members could not be away from home on two consecutive weekends and that the training would have to take place on 20 September 2019. He requested the Secretary to make the necessary arrangements.

The item relating to the Public Protector would be re-scheduled for the following quarter as the Committee programme was very full.

Minutes
The committee addressed the minutes of previous meetings.
Minutes of 2 July 2019: The adoption of the minutes, with no amendments was proposed by Ms Hermans and seconded by Ms N Motaung (ANC).
Minutes of 17 July 2019: It was noted that the attendance register was not attached. Mr Mbuyane moved for the adoption of the minutes, with no amendments. Ms R Moatshe seconded the adoption.
Minutes of 23 July 2019: The adoption of the minutes, with no amendments, was proposed by Ms Motaung and seconded by Ms Hermans.
Minutes of 20 August 2019: In relation to the My Parliament App installed on Members’ cell phones, Mr M Cuthbert (DA) informed Members that the certificate used in uploading the application meant that the parliamentary IT Services could track all personal information on phones. Members needed to go to security and see what was being checked on their phones.

The Chairperson added that the IT technicians had agreed to support Members and there would have to be a follow-up on the matter.

Mr Cuthbert added that the app had been installed through Hub and this had caused the problem.

Ms Hermans moved for the adoption of the minutes, including the matter arising as expressed by Mr Cuthbert. Mr Mbuyane seconded the adoption of the minutes.

21 August 2019: Ms Hermans requested that the Secretary include a list of things to be followed up by the Committee. The minutes were proposed by Ms Motaung and seconded by Ms Moatshe.

The Chairperson informed Members that if anyone ever wanted to object to a motion, the Member should please inform him as he tended not to ask for objections.

The Chairperson stated that the Content Advisor would make the presentation on the legacy reports. Members could find the presentation on the App for Members.

Portfolio Committee on Economic Development Legacy Report
Ms Margot Sheldon, Committee Content Advisor, explained that this Committee had not given much detail, so she had added the Budget Report to the Legacy Report.

General issues from the Legacy Report:
 Slow economic growth and high levels of unemployment were hampering the achievement of objectives to stimulate inclusive economic growth.
 The effects of high electricity costs and below cost imports.
 Development finance and economic opportunities for previously marginalised individuals and youth, including post-investment support.
 Implementation of legislation.
 Partnerships between relevant state organs and business entities for the implementation of mutually beneficial programmes.
 Sustainability of government investments in initiatives such as the Industrial Development Zones.
 Compliance with the Preferential Procurement Policy Framework Act, particularly regarding the manufacturing sector.
 The need to increase local content in the manufacturing sector and film productions.
 Cooperation among Portfolio Committees and with Select Committees to oversee transversal issues.
 The need to track responses to Committee recommendations.
 During oversight visits to ensure that all relevant government stakeholders were available to brief the Committee for maximum effectiveness.

Issues arising in relation to the Industrial Development Corporation (IDC) included IDC’s Shiva Uranium Mine court case against Oakbay Resources and possibility of recovering the R250 million capital and interest owed and the proposed merger of the National Empowerment Fund with the IDC.

Key issues arising in relation to the Competition Tribunal following the amended Competition Act of 2018                                           was its capacity to deal with the increased case load and the complexity of cases, possibly affecting turnaround times, as well as its financial sustainability – it had a deficit of R320 000 and R3.3 million at the end of the 2017/18 and 2016/17 financial years respectively.

Considerations regarding the International Trade Administration Commission  (ITAC) was the impact of scrap metal exports on the local steel industry and pricing policy in that regard as well as the Minister of Economic Development’s request to put moratorium on the exporting of scrap metal, import controls, turnaround times of customs tariff investigations and the entity’s financial sustainability as it had a deficit of R7.5 million and R11,6 million at the end of the 2017/18 and 2016/17 financial years respectively.

Portfolio Committee on Economic Development Legacy Report
Ms Sheldon said that the report grouped comments under four themes or scope of work in the Department of Trade and Industry because of the complexity of the Department which had eight Programmes covering 42 Acts, 13 entities plus B-BEE, various statutory bodies and over 100 international agreements. The Department was the lead department for Industrial Development, Regulation, Broadening Participation and Trade, Investment and Exports but many other departments were involved.

Under Industrial Development, some of the future work included:
-Ongoing monitoring of compliance with local procurement in particular the verification of local content by the South Africa Bureau of Standards (SABS), the Auditor-General and government procurement.
- A need to monitor review of Sugar Act; consider socio-economic impact of the sugar levy which was going to impact other agricultural sectors, consider the opportunity to export sugar to the European Union, and to oversee the implementation of transformation commitments made by the South African Sugar Association in relation to small, black sugarcane growers.
- Monitoring the review of the compulsory specifications for automotive, processed foods, and electrical goods by the National Regulator for Compulsory Specifications, overseeing the modernisation of the ICT systems at the NRCS and ongoing monitoring of the turnaround time for processing letters of authority, particularly in the Electro-Technical Business Unit.
- Monitoring of the implementation of the SABS turnaround plan.

As far as the area of Trade, Investment and Exports was concerned, future work included monitoring the impact of the withdrawal of the United Kingdom and Northern Ireland from the European Union (BREXIT) on South Africa’s trading relationships with the United Kingdom and with the European Union. It was also necessary to monitor the outcomes of the negotiations to finalise the Annexes and Appendices of the Tripartite Free Trade Area and the Continental Free Trade Area, as well as the future negotiations for Phase 2 of these agreements. Public hearings had to be held on the impact of the implementation of existing trade agreements on industry.

Other issues to be addressed by the Committee included:
-Considering whether the B-BBEE Commission should be listed and finding a solution to ensure its effective functioning.
- Overseeing the implementation of the National Credit Amendment Act (No. 7 of 2019), as well as monitoring the impact of the Bill on the credit market;
-Requesting the DTI to review the Consumer Protection Act (No. 68 of 2008) to ensure that the NCC is able to proactively investigate consumer matters and to enforce compliance with the legislation.
-Monitoring the development of a holistic amendment of the National Gambling Act (No. 7 of 2004) that addresses regulation in the horseracing industry, and online gambling, among others.

A critical issue for the Committee was to follow up on the Copyright Amendment Bill and the Performers’ Protection Amendment Bill.

Discussion
The Chairperson thanked the Committee support team for putting together the detailed report. The issues extracted would be included in the Committee’s programme for the rest of the calendar year. When entities or departments presented to the Committee, Members would pay particular attention to implementation of the various issues.

The Chairperson called for the adoption or acceptance of the legacy report which would ensure that the Committee did not drop the ball. He would accept any urgent comments, but the report was not a matter for discussion at that point.

Mr D Macpherson (DA) thanked the Content Advisor for the comprehensive presentation. The legacy would have been lost if the Committee did not take up some of the serious issues that had been raised by Opposition Members and the issues were pushed aside because of where they had come from. The Committee sat with much unfinished business because of that attitude. That attitude had accelerated towards the end of the Fifth Parliament.

He added that some of the serious issue that had literally dragged on for five years had to be addressed and put to bed. The Committee could not abdicate responsibilities to the Executive and the wonder why issues were not resolved. The Committee was at a crossroads: was it going to continue doing things as in the past or was it going to turn a corner and become a proactive Committee that did not wait for issues to manifest. The National Regulator for Compulsory Specifications (NRCS) was an example of an issue that had dragged on for five years and there was still no resolution. The South African Bureau of Standards (SABS) and the Competition Commission matters had dragged on for years. There were endless examples. The Committee would look to the Chairperson to say that maybe there were other ways in which things could be done so that the legacy of that Committee would be to have done things differently from the five previous Parliaments. He sincerely hoped that the Committee could turn the corner on some of the issues that had bedevilled the Committee for five years, if not longer.

Mr Mbuyane welcomed the well-presented report. Some of the issues in the legacy report were already in the current Committee programme, such as the sugar industry, which was very, very important. Was there a status report from the sugar industry about how far the transformation had progressed? He also suggested that the Committee needed status quo reports from the SABS and NRCS as there had been serious allegations and the Committee needed clarity. There was the key issue of the merging of the National Empowerment Fund and the Industrial Development Corporation. Where were they? What were the challenges in respect of the B-BBEE Commission becoming a stand-alone institution? What could be done? Was there a document on broad-based tourism and what had to be achieved?

The Chairperson noted that the Committee was made up of Members from different political parties and it had to ensure a proper working relationship between Members across parties was essential for the Committee to get to work. Members were dealing with the Committee reports but if issues had been dropped, they could be considered but that did not make the report wrong. Relationships had to be built so that issues that affected stakeholders and communities had to be put right at that level. The report should be accepted as a Committee report and there might be things that the Committee could not support for effective implementation and the Committee might have to focus on other issues. Only one of three Bills had been assented to by the President but that brought work for the Committee. If the Committee Members did not work well together, things would not get done. He thanked the members of the team that had prepared and presented the report. Everything was about moving forward and getting things done.

Ms Hermans asked the Secretariat or the Chairperson whether there would be a strategic planning session for the Committee because the Members had been dealing largely with induction and getting to know the nitty-gritties of the two Departments but if the Committee had a strategic planning session it would be able to take on board all issues of Members and so that that Committee was not judged based on issues of the previous Committee.

The Secretariat explained that the Committee was waiting for the new Departmental strategic plan so that the Committee could align its strategic plan to that of the Department. The Committee would spend two or three days on developing a new strategic plan to be tabled in the new financial year.

The Chairperson stated that the acceptance of the document meant that it formed a foundation for the Committee’s work moving forward. It was a foundation document and would be a document for planning as well need re-look and research. By reference to that document, the Committee could show what had been done and what should be done moving forward. The Committee would have to develop an implementation plan.

Mr Mbuyane proposed the adoption of the document as a working document but also said that the Committee was a part of the Legislature and did not have to wait for the Executive. It did not wait for a department to have a strategic plan. The Committee was going to do oversight, so it did not have to wait for the Department’s strategic plan.

The Chairperson noted that the debate was about when to have a strategic planning session. The reality was that there would be big changes in merging two departments and the Departmental strategic plan would not be available for some time. There was work for the Committee that was not dependent the Department. He stated that the Committee had not yet gone over the time allocated to Committees for preparation and training, but the Committee had to manage the transition and not drop the ball.

He acknowledged the Legacy Report as a foundation report and working document. The Committee would be working and managing the situation but not waiting for the Department’s plan. The Committee was still undertaking induction and training. The Committee had had a good discussion the previous day regarding capacity development of Members so that Members could be effective and efficient. He believed that the Committee would need some support to grow and to manage the demands on the Committee. Members would need support to grow themselves and to be more effective.

Closing remarks
The Chairperson thanked everyone for attending the meeting.

The meeting was adjourned.

 

Present

Download as PDF

You can download this page as a PDF using your browser's print functionality. Click on the "Print" button below and select the "PDF" option under destinations/printers.

See detailed instructions for your browser here.

Share this page: