Proudly South African Campaign: briefing on Current Status

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
20 June 2007
PROUDLY SOUTH AFRICAN CAMPAIGN: BRIEFING ON CURRENT STATUS

Chairperson: Mr B Martins (ANC)

Documents handed out:
Proudly South African presentation
Memorandum of Agreement: Part1 & Part2
Proudly South African Annual Report: 2004/2005
Proudly South African Annual Report: 2005/2006

Proudly South Africa website

Audio Recording of the meeting

SUMMARY
Members were briefed on the current status of the Proudly South African campaign. The presentation provided an extensive outline of the challenges that the Proudly South African campaign faced. It highlighted the positive effect that the 2010 FIFA World Cup would have for South African manufacturing and consumption. Their ambitions were to link core manufacturing processes with South African industries and promote purchasing patterns for South African goods by 2010. There were critical financial concerns with the campaign as government funding had been stopped and membership funds were insufficient. It was hoped that Proudly South African membership would mean inclusion in preferential procurement processes as part of a member retention strategy.

The Committee supported the campaign and agreed that there were urgent financial challenges. The Committee believed Government should supply funding and that incentives should be made for corporate companies to get involved. The involvement of craftsman in rural areas was important for the campaign as it would indicate the incorporation of small and large South African businesses. The Committee agreed that the campaign was more than a commercial venture but rather an indication of the level of patriotism in South Africa. The Committee would appeal to the Minister to consider funding for the campaign.

MINUTES

Proudly South African briefing:
Ms Manana Moroka, Chief Executive Officer: Proudly South Africa, briefed the Committee on the role and function of the Proudly South African campaign. The presentation provided an overview of the campaign, the progress it had made trying to fulfil its mandate, marketing tools employed with regard to flagship projects and 2010 opportunities, and future plans for the campaign.

The Proudly South Africa Buy Local campaign was modelled on an Australian campaign that had been successful. Proudly South Africa developed out of Nedlac's Trade and Industry Chamber deliberations that represented government, business, labour and community interests. The emergence of the campaign in 2001 had aimed to drive economic prosperity and competition for all South African producers and service providers. The campaign was dedicated to a sustainable plan that provided high quality items and improved employment through local industry stimulation. The criteria for the Proudly South African campaign included meeting high quality standards, adhering to fair labour and employment practices, complying with sound environmental standards and having member companies incur 50% of its production costs in South Africa.

The membership fee structure required 0.1% of the company’s annual turnover. The amount was capped at R570 000. Special categories had been established for schools, NGOs and community groups. The fee structure was being revised to ensure affordability for municipalities and metropolitan councils. Sources of funding included government and founder sponsorships, that stopped in 2004 and memberships which were the main source of current revenue. A detailed description of the progress made included brand, finance, member, human resources, compliance and information technology related issues (see document).

The Proudly South African marketing strategy included flagship projects such as consumer education campaigns, the development of Proudly South African towns and cities, youth campaigns, a Proudly South African week and Homegrown awards. The other strategy focussed on the 2010 World Cup. The challenge of the strategy was to focus on job creation, economic growth and quality enhancement. The main aim was to be included as a compliance/ registration authority for 2010 suppliers.

The future of the Proudly South African campaign depended on:
- the attainment of financial security,
- inclusion in preferential procurement processes as part of a member retention strategy,
- developing a partnership with the Department, and
- the roll-out a regional plan to effectively service provinces and metropolitan municipalities.

Discussion
Prof E Chang (IFP) stated that the Proudly South African campaign had to be funded by government. The campaign did not have strong incentives and therefore the campaign had to outline the benefits for participating companies.

Ms Moroka responded that government funding was urgently needed. Its members were not able to negotiate with government because their focus was on recruiting companies. There was a need for sustainable income so that the campaign could reach the rural areas. The campaign needed to remain credible for it to be a success.

Mr L Labuschagne (DA) asked whether the Proudly South African logo was a trademark. He asked for clarification on the fee structure and strategic partnerships.

Ms Moroka responded that the Proudly South African logo was a registered trademark. Attempts had been made to stop illegal usage of the logo by having customs intercept and impound illegal goods and have the National Accreditation Council inform them when the logo was illegally used.

She noted that the fee structure allowed for schools to participate. Schools would be assessed on the quality of the teaching and the environmental conditions. It was hoped that more schools would be added to the existing 96 schools. She noted that the board would review the 0.1% contribution from companies and attempt to reduce it. She added that NGOs had to pay R570 to become members. Any NGO was allowed to join as long as they adhered to the campaign’s four criteria.

Mr S Rasmeni (ANC) asked whether a presentation had been made to the Department. He asked why the campaign wanted to be involved in the procurement system. He also queried the participation the campaign had with Black Economic Empowerment (BEE) companies and Small, Medium and Micro Enterprises (SMMEs). He asked how the campaign would benefit rural producers and whether the campaign had cooperated with the Small Enterprise and Development Agency (SEDA).   

Ms Moroka replied that the Memorandum of Understanding aimed to create a partnership on events with a shared platform.

She noted that the campaign had been a Department agency but the new leadership had clearly stated that the campaign was incorrectly classified under the Department and therefore no longer associated with them. The campaign had requested funding from government and companies but the process was delayed due to deliberations within these groups regarding stakeholder permission..

The preferential procurement was part of the campaign’s retention strategy. She noted that a Proudly South African company would have an advantage in bidding for tenders. Discussions were being held with the Chief Director regarding the involvement of BEE companies.

Mr D Dlali (ANC) questioned the reporting structure of the campaign and asked who they had been reporting to since 2001. He asked what the benefits were of joining with regard to the fee structure. He asked how the logo was monitored to avoid illegal usage and queried the employment equity status within the training structures.

Ms Moroka responded that the coordinators of the campaign had been reporting to the Department for the past six years. An alternative authoritative structure had to be established for the campaign to report to since the Department was no longer involved. She recognised the employment equity concerns of the Committee and noted that a five-year plan was in place to address the issues.

She stated that the campaign coordinators were managing the brand successfully. Companies that had joined the campaign were complaining about the lack of tangible benefits. She noted that an agreement regarding the preferential procurement would help give members incentive to join.

Mr Olipant stated that there should be support from government structures. He noted that political parties should join the campaign. He stated that many of the companies that were part of the campaign had not reflected the Proudly South African branding. He asked how government-owned enterprises were supporting the campaign.

Ms Moroka responded that the campaign debated the essence of the South African national identity. She noted that COSATU had agreed to buy only Proudly South African products.

She stated that there were 1182 active members that were contributing membership fees. The reason for the decline in members was because of the removal of cancelled members from the database.

Mr S Njikelana (ANC) questioned the rationale behind the establishment of the Proudly South African campaign. He noted that the campaign did not have a clear association with the Department and should clarify its position. He stated that a government Department had to be accountable for the campaign. He noted that the flagship campaign did not include rural handcrafters who were an important part of informal South African production.

He stated that there should be a drive to link the campaign with exports and local content. He asked whether an impact assessment had been done.

Ms Moroka responded that the Proudly South African campaign had been alienated by a number of parties. There was a lot of optimism in the early stages but accountability and support had waned over the years. She requested that a higher consultative body, made up of Department officials, be established to provide oversight and advise and guide the campaign in the future. She said that the flagship projects would apply to all sectors. She noted that globalisation had forced the campaign to reduce its promise of 100% local content to 50%.

Prof E Chang (IFP) noted that the quality of the products had to be checked regularly despite the campaign’s shorthanded problems. She queried whether 100% of raw materials could be produced in South Africa.

Ms Moroka responded that the 100% quota had been reduced to 50.1%, however it would still be debated in the campaign executive. She noted that it would be a considerable challenge to monitor it.

Mr L Labuschagne (DA) stated that the campaign would face challenging obstacles in achieving its goals. He asked how the Proudly South African campaign was different from previous buy-local campaigns. He noted that the campaign was broader than a commercial venture and extended to matters of patriotism in South Africa.

Ms Moroka responded that the Proudly South African campaign had evolved from the Buy-SA campaign.

Mr Njikelana (ANC) questioned the benefits of joining the campaign for companies. He stated that the campaign was a barometer of patriotism in South Africa. He noted that the regional perspective had to be taken into account as the campaign would affect SADC countries. He stated that the government should support the existence of the campaign.

Ms Moroka noted that tangible benefits were low but some companies had experienced growth through the campaign.

She noted that the Proudly South African logo on any product was an assurance of quality. The products could be used for exports purposes. She requested that qualitative and quantitative research be done to assist in the development of the campaign.

The Southern African Development Community (SADC) region would be developed once South Africa had firmly established its buy-local campaign. She noted that information and assistance regarding buy-local campaigns in other African countries was being conducted. Financial support for the South African campaign was urgently needed.

The Chairperson noted that the campaign would not continue with an unfunded mandate. The Committee will engage with the Minister to arrange funding. He stressed the importance of being patriotic by supporting the mandate. He requested that a second meeting be arranged with the campaign executive to discuss and debate unresolved issues.

The meeting was adjourned.