International Trade Administration Bill: Department's Response to submissions

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE; ECONOMIC AFFAIRS SELECT COMMITTEE: JOINT MEETING
18 September 2002
INTERNATIONAL TRADE ADMINISTRATION BILL: DEPARTMENT'S RESPONSE TO SUBMISSIONS

Chairpersons: Dr R Davis; Mr M Moosa (ANC)

Documents handed out:
International Trade Administration Bill [B38-2002]
SACOB submission
COSATU submission

SUMMARY
The Department of Trade and Industry responded to the submissions made by stakeholders - specifically COSATU and the South African Chamber of Business. Agreement was reached by the Committee to make amendments to Clauses 2; 4 (8); 5; 6 (1); 8(c); 14 (5); 15 (4); 22 (2); 24 (1)(b); 22 (3)(c); 30 (1)(b); 31 (1); 31 (2); 64. In addition the acronym CITA will be changed to ITAC.

MINUTES
Mr. Tshediso Matona, Deputy Director General International Trade and Economic Development- Department of Trade and Industry (DTI), stated that although the number of submissions received had been limited, the ones received had covered critical issues. It appeared that the stakeholders were in principle not opposed to the Bill being passed. He reiterated that in DTI's view the broad approach of the Bill was not intended to make it a Policy Bill though fundamentally most of the proposals made would in effect make it a policy one.

Commenting on the proposed suggestions by the stakeholders, he said that DTI agreed that the preamble statement of the Bill could be strengthened to reflect the essential point made by COSATU that the issue of regional development be raised. The DTI viewed the other issues raised by the stakeholders as being motivated by isolated problems. Therefore DTI was prepared to go along with the proposal of integrating into Clause 2 of the Bill the objective of development, raising income, promoting investment and employment.

Clause 5 dealt with the role of the Minister in respect to trade policy. The essence of the section was not to seek to amend the existing consultative structures but rather to affirm jurisdiction from a line function point of view.  The Bill touches on matters that came under the jurisdiction of other departments such as Finance and Agriculture, they had consulted with these departments so that the Bill could remain within the domain of the DTI. In order to clarify and remove the perception that the Bill was a dictator of trade policy, it could be inserted in Clause 5 that the Minister would play this role in terms of the procedures established by the Constitution and any other laws.

Clause 6: When the Bill was drafted they had thought that they would deal with it alongside the SACU Agreement. However it could stand alone, so they were therefore, agreeable to deleting from Clause 6(1) the reference to Articles 18 and 25.

He noted that COSATU had made reference to a missing section which had been in the earlier draft, which COSATU wanted re-inserted. This section referred to the Minister's powers to issue and withdraw a permit. They had felt that it was not necessary to give the Minister both positive and negative powers - as it would be unnecessary to state that the Minister could revoke a permit.

Clause 8: SACOB had raised a concern based on its experiences with agricultural marketing:
"In constituting the Commission, no provision is made for nominations from the social partners for the President to consider. This is contrary to our experiences in other sectors of our economy. For instance, section 4(4)(a) of the Marketing of Agricultural Products Act (no. 47 of 1996) requires the Minister to gazette the request for nominations to the National Agricultural Marketing Council. To our mind this improves representivity, and is in line with the buy in of affected social partners in the process."
DTI felt that this was incorrect, invitations for nominations should be open to the general public through the gazette and it would be the responsibility of the constituency to respond to the invitations.

On the issue of quorum raised by COSATU - that the full time employees should be government employees, Mr Matona stated that this suggestion had been motivated by the assumption that the Commission would be like the current BTT, but in fact it would be totally independent. They sought to separate the problem by separating the agencies and allowing the Commission to run in its own right. The quorum would not be constituted by government officials to the detriment of other stakeholders. DTI, therefore, felt that it was not necessary to amend the clause.

Clause 14(5): SACOB did not believe that a committee should have the authority to give final effect to a decision without subsequent ratification by the CITA. The DTI though felt that it would not be useful to entertain their proposal.

Clause 18(b): COSATU believed that CITA should have the power to investigate matters and make recommendations to the Minister of its own accord, and not only at the invitation of the Minister. This had to do with the role of the Commission with respect to the monitoring of trade. The issue was should this be done when the Minister required it or could the Commission do so on its own. He commented that research of matters was allowed, but it would not be helpful for the Commission to research on matters that did not concern them.

Clause 22: SACOB had raised the issue as to what should be in the reports. SACOB had stated that they wanted the reports should require a performance schedule. DTI thought that it would be incorrect to do so, as this would be too prescriptive.

Clause 24(1)(b): COSATU had stated:
"The Bill should ensure that, where an application has significant implications for employment or investment, and the company can prove that it is unable to afford the fees, it should be exempted from fees. The CITA would then have to work out appropriate criteria for charging fees, and assessing applications for exemption."
The DTI proposed that they amend this section by saying “The Commission is financed from prescribed fees” The use of ‘prescribed’ as defined in the Bill was meant to accommodate the concern that enterprises were not of the same size and neither were their bank balances.

Clause 26(2): SACOB stated that once the Commission should give reasons as to why an application was rejected. DTI felt that this issue was redundant as the Commission did give reasons for their rejection. S33 (2) of the Constitution of the Republic of South Africa required the Commission to give reasons for rejection.

Ms. Nomande Maimela (CEO Board on Tariffs and Trade - DTI) commented that SACOB had raised two issues: that reasons be given for rejection and that there be criteria for assessment. DTI felt that establishing a criteria of assessment would be unworkable as they dealt with the whole economy and used different criteria depending on the application.

Mr. Tshediso Matona stated S30 (b) dealt with applications. It was foreseen that similar CITA structures would be set up in other member countries. If an application was received by one of them then, it would then be easy to establish whether a similar application had been received by the others. SACOB had requested clarification of from when the six months was calculated. DTI had therefore decided to make the 6 months effective from the date of receipt of the application.  This would be inserted in S30 (1)(b) ...from the date of application.

Clause 31 envisaged that a member state of the customs union could request a member state to do research for them due to capacity discrepancies in the region. SACOB's concern was that if CITA received a request from a member state, they should inform the SA stakeholders of this as they may be interested. DTI felt that this would be fair but it was something that they needed to discuss with their partners in SACU, therefore, it could not be dealt with in this legislation.

The Chair stated that when the SACU Agreement came to the Committee for ratification they would deliberate on the issues that had been raised concerning SACU and would deal with them then. He noted that there were 16 clauses that had recommendations for amendments. He proposed they go through them one by one to see if there was agreement to the amendments.

Mr M Moosa (ANC) (Co-chair) stated that there were too many CITA acronyms, he recommended that they rather put the “C” at the end of the acronym: ITAC (International Trade Administration Commission)

The Chair asked whether the Committee and the Department agreed to this. It was unanimously accepted, but acknowledged that a series of amendments would have to be made as well as to the definition.

Clause 2: The Co-chair recommended that it read: “ The object of this Act is to foster economic growth and development in order to raise incomes and promote investment and employment in the Republic and within the Common Customs Area by establishing an efficient and effective system for the administration of international trade subject to this Act and the SACU Agreement.”

Clause 5: Prof. B. Turok (ANC) was not happy with the way in which it had been drafted. He said it should state how the Minister should go about issuing the notices.

The Chair noted the proposal that it read “The Minister may and with the procedures established in the Constitution and any other law by notice in the gazette issue Trade Policy statements or directives.”

Prof Turok was concerned that this Bill required one to go to the Constitution and other laws. He stated that the legislation should be clear and state the provisions of these laws.  However the Chair stated that it clearly implied that the procedures laid down in the Constitution and other laws applied in this regard.

In response to a member asking the relevance this section to the Bill, the Chair referred to S7 (2)(a)(ii), which stated the relevance. The Co-chair stated that the idea was that the Minister could make a directive quickly and efficiently if need be within the context of ITAC.

Clause 6: the Chair noted the amendment requiring the deletion of ‘subject to Articles 18 and 25’

Clause 8: the Chair noted the SACOB suggestion that the section be prescriptive and the relevant sectors sought out. There had been a proposition from the DTI that the clause remain as it is.

Prof. B. Turok stated that given the neglect of rural areas and agriculture, it might be an idea for emphasis and balance to say something about the different sectors.

The Co-chair supported the member’s suggestion but also felt that that they should underpin gender as is usually done in legislation.

Ms Maimela (DTI) wondered whether it was appropriate to say that they needed economic sectors to be represented, as they would have each and every sector wanting to be represented on the board. She felt that they should not open it up generally.

The Chair suggested they flag this issue.

Clause 12: Ms. Joyce Moloi (ANC) stated that it seemed to be that full time Commissioners would be paid by the Department which implied that most persons on the Commission would be from the Department.

Mr. Tshediso Matona (DTI) noted that the forum could consist of full time and part time members, all of whom were paid by the government and not the Department. This should take care of the concern for impartiality. COSATU seemed to be of the view that part time members would always be stakeholders which was not the case - they could be anybody as could the full timers.

Clause 14(5): The Co-chair stated that no structure should be able to delegate its power if it is given to them by Parliament. He felt that it was a good principle to have ratification.

The DTI responded that the purpose of this sub-clause was as a result of problems that they had experienced and was an attempt to be quicker and more efficient. This provision would assist when urgent decisions were required.

The Co-chair suggested that they should get an overview as to the working of the Commission, how often did they meet to monitor committee work and ratify decisions?

The DTI responded that at the moment the board met twice a month which at present worked well. However there were issues that should not have to wait two weeks for a decision to be made. Therefore, it was not an issue of how often it met, as there would still be those urgent matters that needed to be decided upon quickly.

The Co-chair stated that the intention was that ultimately the Commission should make the decision. It was therefore proposed that Clause 14 (5)(b) read:
“A Committee decision is effective only if-
(a) the notice establishing the committee expressly authorises the particular decision to be effective on an interim basis without ratification by the Commission; and
(b) the decision is subsequently ratified by the Commission.”

Clause 18(b): the Chair stated that no amendment was required.

The Chair noted a typing error in Clause 22 (2)(a) which was missing 'of' : “objects of this Act.”

Clause 22(3): the Chair noted that SACOB wanted a reporting on the performance schedule. He suggested that they insert at S22 (3)(c) “ a report of performance and activities undertaken in terms of this Act; and”

Clause 24(1)(b): The Chair confirmed that it would read “prescribed fees payable in terms of this Act;”

Clause 26(2): The Chair noted SACOB's request for reasons for rejection was covered as DTI had stated that reasons were given as required by the Constitution. 

The Chair stated that no amendments were required to Clause 28.

The Chair confirmed that Clause 30 (1)(b) would read:
“ascertain whether an application dealing with a substantially similar matter is pending before the relevant SACU institution or has been decided upon by the relevant SACU institution within the previous six months from the date of that application.”

The Co Chair stated that for Clause 31(1) and (2) it would be illegal to legislate for SACU, which was a sovereign body. Therefore it should state:
"31(1) ITAC may receive any request from SACU to -..." and "31(2) ITAC may receive...”

The Chair said that in Clause 64(2), they should delete reference to Section 6.

The flagged issues were then revisited by the Committee:
It was suggested that Clause 8 (1)(c) read as
“The members of the Commission must, when viewed collectively, be representative of a broad cross-section of the population of the Republic including women.”

It was proposed that an additional sentence be added to Clause 31(2)(c) be added to read:
“endeavour to ensure participation by significant economic sectors”

The DTI stated that this section related to information coming back from matters of SACU. As such, it could be covered under Clause 4(7) because the Minister was required to publish SACU recommendations and decisions.

It was concluded that this section be put under Clause 4(8) - what was specifically raised under Clause 31 was information on what other members were doing.

In closing the Chair stated that it had been agreed by quorum that amendments would be made to the acronym and to Clauses 2; 4 (8); 5; 6 (1); 8(c); 14 (5); 15 (4); 22 (2); 24 (1)(b); 22 (3)(c); 30 (1)(b); 31 (1); 31 (2); 64.