Hon Deputy Speaker, the question makes reference to whether there are measures in place to ensure that service providers and directors of companies who defraud the state are blacklisted.
There are basically two provisions under which such activities can be undertaken by the National Treasury, and I am going to outline them briefly.
The first is section 28 of the Prevention and Combating of Corrupt Activities Act of 2004, which prescribes that, when a court convicts a person of an offence in respect of corrupt activities relating to contracts, or to the procuring and withdrawal of tenders, the court may rule that the name of such persons, directors or other persons who wholly or partially exercise control over the enterprise, be endorsed on the Register for Tender Defaulters.
The National Treasury must determine the period - which may not be less than five years and not more than 10 years - for which the particulars of the convicted persons or enterprises must remain on the Register for Tender Defaulters. During such period, the public sector may not conduct business with such a person.
The second instance arises from the Preferential Procurement Regulations, as well as the general conditions of contract. This empowers an accounting officer or authority to restrict an enterprise or its directors, trustees, or shareholders, for a period not exceeding 10 years, if such enterprise did not fulfil the conditions of contract, or has been engaged in corrupt or fraudulent practices, in competing for, or in executing, the contract.
In such cases, the accounting officer or authority must follow the audi alteram partem rule which, in English, means hear the other side, when informing the person of the intention to restrict him or her. The person concerned must be afforded an opportunity to provide reasons why such restrictions should not be imposed.
When an enterprise or person is restricted by an accounting officer or authority, the National Treasury must be informed accordingly and the names of the enterprises or persons are endorsed on the database of restricted suppliers, which is maintained by the National Treasury. Both the Register of Tender Defaulters and the database of restricted suppliers have been made public and are available on the National Treasury's website.
All spheres of government and Schedule 3A, 3C and municipal entities, are required to verify the status of recommended bidders, in order to ensure that no recommended bidders that are listed as companies prohibited from doing business with the public sector, do so. Adherence to this prescript also forms part of the Auditor-General's annual audit. Thank you.
Madam Deputy Speaker, in appreciation of an elaborate and splendid response by the Minister, I will, on behalf of the ANC, suggest that the hon Minister applies certain methods in order to ensure that the applicability of this notion is actually visible at the lower levels of governance. Thank you very much for the response.
Deputy Speaker, let me thank the hon Luyenge for his suggestion; we will discuss with him and others what ideas they have for higher visibility.
One of the challenges, in the first instance, with regard to the tender defaulters, is that it is a court of law that must make the decision, and where that decision is not explicitly made in the judgment, if you like, that is passed by a court of law, no name can be put on any register. That is one of the difficulties in having a very short list of names in respect of tender defaulters. Thank you.
Deputy Speaker, Minister, the Tender Default Register was empty for a long time and it has only recently featured the names of some of those who have defrauded the state.
As you mentioned, it is only after the court orders it necessary, that a name is placed on the register. Are you considering an amendment to the Prevention and Combating of Corrupt Activities Act, to require automatic entry to the register in the event of a tender default? If so, please provide relevant details. If not, why not? Thank you.
We will certainly have a look, hon Deputy Speaker, at the hon George's suggestion. I think the one reason we would be cautious about that, is that you cannot erroneously put somebody's name onto a register and then carry the liability that goes with wrongful decisions. That is why we place the trust in a court of law to make that decision. We will look at other ways of ensuring that defaulters do not benefit from any further business with the state.
Deputy Speaker, may I perhaps ask the Minister whether he can tell us, off the cuff, how many names have been placed on the register?
Deputy Speaker, off the piece of paper rather than the cuff, it would appear that there are two names on the list of tender defaulters that I have in front of me, and a list of almost 3 pages - that I assume amounts to probably 50 to 60 names - in respect of the restricted suppliers.
Particulars regarding policy in terms of which a moratorium on foreign land ownership has been called for
161. Ms L D Mazibuko (DA) asked the Minister of Rural Development and Land Reform:
(1) With reference to his reply to question 1354 on 1 August 2011 in which he states that no official data exists on the percentage of land owned by foreigners and that less than 1% of state-owned land is currently leased to foreigners, in terms of which policy has his department called for a moratorium on foreign land ownership;
(2) whether his department has undertaken a feasibility study to determine the viability of placing a moratorium on foreign land ownership before the policy was proposed; if not, why not; if so, what are the relevant detail NO2489E
Hon Deputy Speaker, the response to the first part of the question asked by the hon Mazibuko is that the department has not called for a moratorium on foreign land ownership. Therefore, the second one falls away. Thank you.
Madam Deputy Speaker, Minister Nkwinti, we know that the last time that the ANC government had plans to limit foreign ownership of land, one of your predecessors, the Minister of Land Affairs, Thoko Didiza, commissioned a study which found that only 5% of land was foreign-owned in 2004. As a consequence of these results, she abandoned plans to limit foreign ownership.
Given your recent remarks, in June this year, in which you said that government would, nevertheless, be pursuing a policy of "precarious tenure" to restrict land ownership by foreign nationals, and given your Deputy Minister's remark that government wishes to "guard against the danger that prime land in South Africa gets snapped up by foreigners as this would push up prices", have you instituted or do you plan to institute a research study to establish how much land is foreign-owned, as was done by your predecessor, and to assess the risks and the benefits to the rural economy of such a policy proposal? If not, why not; and, if so, what are the relevant details?
Deputy Speaker, the hon member is correct. None of my predecessors implemented the recommendations of the panel. So, part of what we are doing now is actually looking at that before we can do any further study. We have looked at that report and we are convinced that we need to implement some of the recommendations of that report. Secondly, you could not implement a tenure reform system and leave them out because they are foreigners and they bring in foreign investment. They have to fall into the same context within which we will be operating and implementing land reform. Thank you.
Deputy Speaker, thank you Minister for your response. Are there other measures in place to deal with this matter and what are the implications for the broader pro-poor policy development? If this is left unattended, are there any security implications for the country? Do developed countries open their land to ownership by foreigners? Thank you.
Deputy Speaker, the answer is no. Every country has measures to protect its national assets, including land - particularly land. So, we should not be an exception to that.
Secondly, we find it interesting that actually people who are non-South African citizens but are residents here have no objection to this because in their own countries this is happening. I think that they have been surprised that in this country we do not yet have this kind of measure to protect our own assets. Thank you.
Deputy Speaker, thank you Minister for the information. Minister, it does not help to beat about the bush here. The important question for us all to know, and especially for South Africans and possible investors, is: When are we going to get this much talked about Green Paper that must be released? In the leaked version, we saw this proposal of precarious tenure and other issues that need to be dealt with. Some of these have already been implemented, like the plough system. Minister, I just want to know if you can tell us when we can expect this Green Paper. We have been waiting patiently since last year.
It was approved today by Cabinet for public comment. [Applause.]
Deputy Speaker, hon Minister, as there is no official data in existence, what unofficial data are you referring to in your references to policy-making in this regard? Two of the nation's leading real estate agents are quoted as saying that, over the past 12 months, less than 5% of all property sales concluded by both of them have gone to non-national buyers, making reasons for targeting foreign land ownership obscure or less obvious. Can you elaborate on this?
Hon Deputy Speaker, the hon Dudley is quite correct; that is exactly the point. The point that she is making when she says official data does not exist and, therefore, formulating policy becomes a problem, is exactly the challenge we are faced with in the department. That is why we have put together a national reference group which includes farmers and intellectuals - that's commercial and emerging farmers - and all of them to sit with us and discuss exactly that point because we have got various databases which are different in content. So, we want to have one database for the country so that we can formulate policy properly. That is the problem.
Particulars regarding applications for special pensions
127. Mr D D van Rooyen (ANC) asked the Minister of Finance:
(a) How many applications for special pensions have his department received since 1 April 2011, (b) how many had been processed as at the latest specified date for which information is available and (c)(i) what challenges have his office encountered in this regard and (ii) in which areas? NO2451E
Deputy Speaker, submissions of special pensions applications closed on 31 December 2010. Therefore, no applications from people applying in their own right were received since 1 April 2011.
However, a total of 1 978 applications were received after the closing date of 31 December 2010 and were declared as late applications. A total of 9 924 applications were received from the under-35 group since January 2009, ending 31 December 2010.
The number of applications processed as at the end of July 2011 is 7 185. The remaining number of 2 739 applications are still at a political verification and research level. Most of the applications received by December 2010 were incomplete, as applicants were only submitting these forms to meet the closing date deadline.
A total of 5 667 applications were received in December 2010. Only 3 440 of these applicants were from Africans that were under the age of 30 or over the age of 35, and do not qualify now. These applications came from all provinces. Thank you.
Hon Deputy Speaker, in the spirit and the letter of the clarion call by uMkhonto weSizwe veterans, I would really like to commend the Minister and the Ministry for the work that they have done hitherto.
Minister, it has been brought to our attention that some of the applications have been declared dormant mainly because applicants can't be traced. Now, I was just wondering whether, instead of relying on directly engaging applicants, you won't consider using political organisations of the affected applicants to trace them so that this process can be completed appropriately.
Hon Deputy Speaker and hon van Rooyen, we are certainly in touch, as far as I am aware, with the various political organisations. However, if there is any specific recommendation that will help us to expedite these matters, please feel free to guide us. Thank you very much.
Deputy Speaker, Minister, the aim of the special pension is to compensate those who were unable to accumulate pension benefits, given their participation in the struggle for democracy in South Africa.
Is there an ongoing process to evaluate the financial means of a special pension recipient to ensure that those who no longer acquire assistance no longer receive the pension? If so, please provide the relevant details; if not, why not? Thank you.
Hon Deputy Speaker, this process is still pretty much incomplete. However, I think that the idea of an ongoing assessment is a good one. It will assist us in ensuring that funds from this fund are used in an appropriate way. I will enquire whether there are any further details that we could supply to hon George and then let him have them. Thank you.
Particulars regarding plan to rectify current backlog of company registrations
97. Ms S P Lebenya-Ntanzi (IFP) asked the Minister of Trade and Industry:
(1) Whether he and his department have a strategic plan in place in order to rectify the current backlog of company registrations at the Companies and Intellectual Property Commission (CIPC); if not, why not; if so, what are the relevant details;
(2) what (a)are the details of the current size of the backlog and (b) is the expected time required to (i) deal with and (ii) reduce the backlog? NO2408E
Deputy Speaker, the process of registering companies to require limited liability status is the first step towards participating in economic activity, and it is therefore imperative that it takes place smoothly and efficiently.
The Companies and Intellectual Property Commission is an autonomous commission responsible for its own administration, but reporting to the Minister of Trade and Industry. I have interacted on a number of occasions with them about some of the challenges and problems that they are facing. Earlier this week, I went on a walkabout to engage with staff and to see some of the issues and the progress they were making.
The main issue is that, since the formation of the commission and entry into force of the new Companies Act, there has been a significant increase in company registrations under way. This took place against the background of some backlogs arising from the old Companies and Intellectual Property Registration Office. The question does provide a table showing the status of implementation of various transactions during the course of August up until 18 August.
I think that this shows some significant progress in some areas. For example, name registration is a very important part of the process. Under the new Companies Act, it is not necessary to register a name, but many companies do. The number of transactions outstanding at the beginning of August was 31 108; 10 004 applications were received up until 18 August and 37 220 applications were processed, leaving only 3 892 on 18 August.
Similar progress was reported with respect to amendments to companies, where the number of the backlog went down from 19 000 to only 450. The challenges still remain in company registrations and also with co-operative registrations. What is happening is that the leadership of the Companies and Intellectual Property Commission is now deploying additional resources to try to unblock those particular blockages.
The commission has been mandated to prepare a full update and to table this at a meeting of the Portfolio Committee on Trade and Industry on 13 September. They are well aware that we, together with Parliament, are expecting that there will be further significant progress by that time. Thank you very much.
Madam Deputy Speaker, thank you hon Minister for a response to my question. My follow-up question will be: Do you think that the decentralisation of the commission into provincial offices might assist with the current high volume backlog of company registrations; and has your department explored the merits or otherwise of this option? Thank you.
I think that at this point, the basic challenge is to get some of the processes at head office going to the point where we can start to say backlogs are cleared and that we are now beginning to move further forward. The next phase, as I see it, is that we are going to start to establish some benchmarks in terms of the amount of time it takes to register companies and things like that.
We will certainly explore the way in which decentralisation may assist, but one of the important points is that, under the new Companies Act, it is quite possible to register electronically. Therefore, it is not as necessary to have as many decentralised offices as it might have been under the older systems. Thank you.
Deputy Speaker, it is difficult to overstate just how bad the situation was at the commission when the committee went there. They were registering about 2 400 registrations in the first two months. With the Companies and Intellectual Property Registration Office, Cipro, we were registering around 6 000. Nevertheless, we take the Minister's words as encouragement.
Minister, one of the main problems at the commission is the fact that of the 1 600 calls that the call centre receives every week, about 1 100 of them go unanswered. We were told that this is because they have a shortage of 30 call centre seats in their call centre, and we were told that they did not have space at the DTI campus to put in 30 more seats. My question is: Will you as Minister approve additional space on the campus for that call centre, or alternatively allow the commission to contract out some call centre capacity, perhaps down here to some of our call centres in the Western Cape? Thank you.
Well, I think the first part of this is that in all these areas of blockage, including the call centre, they have been employing more people. The question of space in the longer term needs to be resolved by CIPC moving off campus. They are aware that that is what we are expecting of them.
In the medium term they need to find new premises off campus, but in the meantime, we are doing what we can to try to accommodate them in all the various areas. We do see this as a priority piece of work.
Deputy Speaker, hon Minister, the Companies and Intellectual Property Commission, CIPC, is only three and half months old. Therefore, it was expected that it would experience teething problems, given the challenges it inherited from Cipro.
However, Minister, now that the Valour-IT problem has been resolved, could you explain how this is going to assist CIPC to improve the processing of registering new companies as well as addressing the backlog speedily and effectively?
I think that regarding the point about moving speedily to the new commission and putting in place a new leadership and a new commission, the data has actually been vindicated by the statistics that have just been given. If we had set a longer period and hoped that we were going to resolve all the problems under the old Cipro, we would have been in more serious trouble than we are in now.
So I believe that the leadership in CIPC, the commission of the Deputy Commissioner and other staff members are now working much more effectively than Cipro ever worked. They have identified a number of the problems and so on. Regarding the point you make about the Valour-IT, well, I think one of the things that they are looking at is whether the type of software, the Enterprise Content Management System, is in fact what they need.
The issue of Valour-IT means that now there is no legal or other barrier to them acquiring whatever software they need to acquire. They can go ahead and acquire whatever software they need to. However, what they are looking at is whether the choices that were made under the old Cipro and under that contract are the correct ones, or whether there are other alternatives. They are seriously looking at other alternatives in a technical sense. Thank you.
Hon members, the time allocated for Questions has expired. I only had two speakers here. Outstanding replies received will be printed in Hansard.
See also QUESTIONS AND REPLIES.