THE NATIONAL COUNCIL OF PROVINCES
QUESTION FOR WRITTEN REPLY
Question 22
Mr T D Harris (DA-WC) to ask the Minister of Trade and Industry:
Whether his department has made contact with the National Economic
Development and Labour Council (Nedlac) with regard to developing the
proposals for sector specific strategies to address vulnerable sectors
referred to in the Framework for South Africaâs response to the
international economic crisis published on 19 February 2009; if not, why
not; if so, (a) which sectors will have specific strategies, (b) when will
the strategies be published, (c) what is the composition of the task teams
charged with developing the strategies and (d) why the four-week deadline
specified has been missed by more than four months?CW24E
Response:
(a) the dti has been working intensively with the vulnerable sectors
identified in the 19 February Framework Agreement through the Nedlac
process. The sectors identified as vulnerable in the framework
document are:
⢠Clothing, Textiles and Footwear
⢠Mining
⢠Automotives
⢠Capital equipment
Progress is reported on below, with the exception of Mining which does
not fall within the remit of the Minister of Trade and Industry.
(b) Crisis response documents have been finalised with respect to
Clothing and Textiles and Automotives, while the Capital Equipment
document is in draft stage. Certain elements of these documents remain
subject to the budgeting process and it has been agreed with National
Treasury that the budgetary implications will be finalised before the
documents are made public.
In addition, the Minister of Economic Development issues broad update
reports on progress with the crisis response from time to time. the
dti can also report the following additional progress:
The Industrial Development Corporation (IDC) has since April 2009,
made R6-billion available over a period of two years to assist firms
across a broad range of sectors that find themselves in distress as a
result of the economic crisis. To date the IDC has approved loans to
11 companies to the value of R644 million and is evaluating another 49
applications.
In the Automotives sector, the dti has facilitated agreement amongst
stakeholders on a set of measures to help the sector amidst the
current crisis which has seen 40,000 jobs lost in the industry since
October 2008. The industry has committed that all firms receiving
state support will provide reasonable sustainability strategies as
well as commitments to do everything possible to save jobs, promote
affordability of motor vehicles relative to other developing
countries, respond to environmental requirements and maintain modest
executive and shareholder remuneration.
In the Clothing and Textiles sector SARS is currently engaged in a
clampdown on customs fraud, round-tripping, counterfeiting as well as
abuse of instruments such as duty credits, rebates and quotas. Five
companies are being charged while a number of others are subject to
investigation. A tariff application is being considered by ITAC to
increase tariffs to the bound rate on 35 articles of clothing and to
reduce tariffs on 3 articles of textiles.
The Clothing and Textiles Competitiveness Programme is being
implemented through the Industrial Development Corporation. the dti is
in final consultations with industry stakeholders and National
Treasury on a Production Incentive for the sector.
In the Capital Equipment, Transport Equipment and Metal Products
sector the dti and IDC are designing a dedicated incentive scheme to
assist firms in relation to the public infrastructure development
programme. The programme will be canvassed with stakeholders and
finalised for implementation to commence by January 2010. Business and
Labour are currently working on an application to ITAC for possible
tariff increases on products with substantial potential for the
creation or retention of decent jobs and recapturing of domestic
market share. Measures to strengthen enforcement are being considered
with respect to products which do not meet mandatory safety standards,
particularly in relation to electrical and other inputs into the
building industry.
(c) Sectoral teams were established under the auspices of the Nedlac
Distressed Sector Task teams. Each constituency: business, labour and
government were requested to appoint appropriate representatives to
these teams.
(d) In the Automotives sector, government was ready to finalise response
measures. However, business and labour requested further time to reach
agreement amongst themselves, particularly on the matter of
conditionalities attached to additional crisis related support for the
sector.