Regulation of Extension of Child Support Grant to children aged 15 to 18 years: Children's Institute briefing; Nestle's poverty eradication efforts

Social Development

16 November 2009
Chairperson: Ms Y Botha ( ANC)
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Meeting Summary

The Children’s Institute told the Committee of its concerns with regard to the proposed design of the extension of the Child Support Grant to children aged 15 to 18 years and asked the Committee to intervene to help ensure that the design of the extension was streamlined so that children did not fall off the grant between the phases. The Committee agreed with the Institute’s concerns and took a resolution to write a letter to the Ministers of Social Development and Finance, who were responsible for drafting the regulations.

Nestle then briefed the Committee on its business rationale and attempts at alleviation of poverty, describing its corporate social investment programmes. It noted that it would like to strengthen ties with the Portfolio Committee and was willing to consider entering partnerships with government. The company had introduced a different training programme for Early Child Development Centres in its drive to support community based programmes.

The main objectives of Nestle’s activities were to create, maintain, and increase trust in Nestlé, not only as an economically and financially successful enterprise, but also as a socially responsible company, dedicated to sustainable development. It noted that in urban areas, Nestle had an Ice Cream on Wheels initiative, aimed at job creation and skills development amongst unemployed youth, but that there had been some problems because many city bylaws restricted street vending. Nestle was working with City Councils to try to allow vendors to trade in beachfront areas.

Members questioned whether any of the initiatives reached the rural areas, and questioned the social responsibility programmes, how they operated and their reach. They pointed out that since the population supported Nestle it should try to extend its reach to areas where it did not already have a physical presence. Nestle indicated that this was the reason why it wished to partner with government.
It was agreed that other meetings would be arranged in the next year.

Members adopted the Minutes of 13 October 2009, but sent the minutes of 20 October back for redrafting. The Committee’s 2009 Annual Report was tabled, and would be put up for adoption at the next meeting.

Meeting report

Children’s Institute: Child Support Grant briefing
Ms Paula Proudlock, Programme Manager: Children’s Institute, told the Committee of its concerns with regard to the proposed design of the extension of the Child Support Grant to children aged 15 to 18 years. Cabinet announced the approval of the extension in October this year but regulations must be gazetted before 31 December 2009 in order for Cabinet’s decision to be implemented.

The Institute, and its partner organisations including ACESS and Black Sash, were particularly worried that if the same design that was used in the regulations for the 2003 regulations to extend the CSG to children aged 7 to 14 over 3 years, was repeated for this new extension to children aged 15 to 18, children would fall off between the phases and there would be a necessity to re-apply for the grant each year. During this time many children would have to survive for about five months without their grant while waiting for the next phase of the extension to come info effect.

The Institute asked the Committee for its assistance in ensuring that the regulations are published in draft form for comment prior to being finalised. They also asked the Committee to intervene to help ensure that the design of the extension was streamlined so that children did not fall off the grant between the phases. An easy solution to this problem was to simply peg the grant to the birth date of a child, thus ensuring that once they are on the system, they are entitled to stay on the system until they turn 18. The regulation would thus read:

"With effect from 1 January 2010, a child who is under 18 years and who was born after the 1 April 1994, is eligible for the child support grant."

This would ensure that once children are on the system they would remain in receipt of the CSG until they turn 18 years.
The Committee agreed with the principle but said they preferred that the date of birth should be 1 January 1994 rather than 1 April 1994 so that more children would qualify. The Institute explained that they would also prefer the 1 January 1994 but had chosen 1 April 1994 as a compromise position as they were aware that there were budget constraints. April 1994 was also the date of the first democratic elections in South Africa and therefore using 1 Aprl 1994 as the cut-off birth date would ensure that all children “born free” would be eligible for the CSG.

The Committee resolved that they would write a letter to the Ministers of Social Development and Finance expressing the Committee’s principle that children should not fall off the grant between the phases. The Committee also resolved to ask the Minister of Finance for a progress update on the Older Persons Act regulations as these had been with Treasury for a long time now.

The matter was concluded with no further discussion.

Nestle Presentation
Ms Pindelwa Mda, Nutrition Business Manager, Ms Motshidisi Mokwena, Government, Media and CSI Manager, and Mr Ravi Pillay, Corporate Affairs Director, Nestle represented Nestle. The meeting was aimed at strengthening the ties between government and the private sector in the fight for social development and the eradication of poverty.

The presenters outlined that over the past 8 years, Nestle had invested more than R 1.8 billion in its South African operations and that had led to massive job creation. 
The main objectives of Nestle’s activities were to create, maintain, and increase trust in Nestlé, not only as an economically and financially successful enterprise, but also as a socially responsible company, dedicated to sustainable development.

Nestle was involved in a number of corporate social responsibility programmes in the country which were initiated by its employees. The corporate social responsibility programmes of the company included giving expertise and support to established and emerging farmers, creating jobs in local communities, supporting early childhood development (ECD) centres and schools.

Nestle told the members of the Committee that its AgriBEE programme was very successful;
Nestle supported 29 emerging black farmers in Harrismith to become commercially viable. Nestlé collected milk from the farmers and thus provided a sustainable income. It had partnered with government and other organisations to facilitate the provision of electricity, water and road infrastructure to the farmers.

In urban areas, Nestle had an Ice Cream on Wheels initiative, aimed at job creation and skills development amongst unemployed youth. Since 2006, 1 300 street vendors started operating in Gauteng and Durban. In collaboration with government’s Umsobomvu Youth Fund, Nestlé provided vendors with motorcycles, bicycles and uniforms. The Youth Fund provided funding, training, mentorship, sales, techniques and entrepreneurial advice to the youth involved in the project.

However, due to city bylaws, the success and growth of the project was limited. Many cities in South Africa had many restrictive by-laws against street vending. Nestle had made agreements with some cities to allow the vendors to trade in beachfront areas.

Ms E Kenye ( ANC) said that she was concerned about the fact that the presenters had not numbered the slide pages. However, the issue she wanted to raise was the scorecards that the company had received. She wanted to know how many women were employed in the company.

Ms Motshidisi Mokwena, Manager, Government and Media Liaison, replied that there were five women in top positions, and three were black. The company scorecard reflected points for those positions. There were also plans to identify people to fill the positions when the current employees vacated them. There had to be enough females in the top executive of the company. Employment equity was a global initiative for the company as it had realised that there were not enough women in management globally. The highest number of females was found in middle management, especially those who were black, indian and coloured.

Ms Pindelwa Mda, Nutrition Business Manager, Nestle added that she was one of the women in the top management and was one of the board members of the company. She headed the biggest business unit at Nestle and she had been heading the unit since 2002. Her division was dominated by women.

Mr Ravi Pillay, Corporate Affairs Director added that there were three females and three males who were non-executive directors of Nestle South Africa.  

Ms Kenye asked what measures did Nestle have in place to prevent the theft of infant formulae from non-governmental organisations (NGOs).

Mr Pillay replied that there were two aspects to the situation. One involved theft from government institutions and the other involved theft from stores. The theft from government warehouses was out of Nestle’s control, but if there were structures that were willing to engage Nestle with regards to supply chain and logistics, it would try to assist. The company’s supply chain could deliver the formulae in small volumes, so that it could be manageable.

Secondly the formulae could be tracked and traced if there was a pallet of formulae found somewhere, as Nestle could trace the code. Another option would be to involve Nestle’s network of distributors to take the formulae to clinics instead of having the infant formulae held at government warehouses.  

Ms H Lamoela (DA) asked if the Ice Cream on Wheels project was run in the rural areas and in which rural areas it was run.

Mr Pillay replied that the Ice Cream on Wheels project was predominately in urban areas of Johannesburg, Limpopo and Durban. Ice cream was an “impulse” type of purchase and generally needed to be sold to people at gatherings. Rural communities did not provide sufficient market. However, if the Committee had suggestions on how to get to rural communities, Nestle would be pleased to receive input.

Ms Mokwena added that each municipality had its own by-laws, which made it difficult for the Ice Cream on Wheels project to be operated. However Nestle was trying to get municipalities to allow the Ice Cream on Wheels to operate on beachfronts.

Ms Mda added that the project was aimed at empowering unemployed youth to generate income for themselves. The project would not generally work in rural areas because of a lack of disposable income. 

Ms Lamoela asked the company to give a list of the townships in which it was running the Warmth project. The Western Cape was geographically very wide, but she had never come across the programme.

Ms Mokwena replied that the head quarters of Warmth were in Athlone, Cape Town. The project was in Khayelitsha, Gugulethu and parts of Philippi. On average this fed between 500 people and 1000 people a day.

Ms Lamoela said that she was happy with the fact that Nestle spent a day in a number of crèches during the 16 days of activism in December 2008 and she asked if the company was planning anything for 2009.

Ms Mokwena replied that the company introduced a different training programme for Early Childhood Development (ECD) centres. The University of Pretoria trained the people who ran the centres on the theoretical side of child development, and there were also people who cooked. The programme was successfully implemented in 2008 and would continue again in 2009. Nestle would also go to early childhood development centres that were not part of the Nestle network. Nestle Employees would volunteer at the centres.

Ms Lamoela asked how rural communities would benefit from the programme and asked if the project was simply focusing on urban areas?

Ms Mokwena replied that the Warmth programme was also taken to rural areas. However nestle mainly focused on areas where it had a presence, such as offices or a factory, because it was the employees who went to volunteer at the centres. The company did not want to spend a lot of money on logistics to get people out to other areas.

Ms S Kopane (DA) asked the company to supply the Committee with the names of the NGO’s that were involved in the Orphans and Vulnerable Children programme run by Nestle. She also asked Nestle to give a list of the schools in which the company ran programmes.

Mr Pilay said that he would e-mail the names to the Committee

Ms Kopane asked Nestle to tell the Committee how many beneficiaries had benefited from the Kitchens projects that were supported by Nestle.

Mr Pillay said that he would get back to the Committee with the information.

Ms N Gcume (COPE) asked how Nestle identified the NGOs that the company was funding, and whether there were set criteria that the company followed.

Ms Mda replied that the task was conducted with the National Department of Social Development and people who applied directly were people who were already working with government.

The Chairperson wanted to know what the company’s social investment budget was, especially for 2010, and what the Company’s priorities were for 2010.

Mr Pillay said that in terms of Nestle’s vision of creating social value, it was very difficult to quantify the numbers, as many of its projects were linked to specific factories. Whenever the company engaged in any social project, it was linked to some part of the value chain of the business.

Ms Mda added that Nestle’s vision was to enhance the quality of life, and at some time the proposals that were budgeted for would be presented to the company. The priorities of Nestle included nutrition, education and creating employment, so if government was looking for strategic partners, Nestle was willing to work with government towards a common goal.

Another Member of the Committee said that it seemed that Nestle only worked in areas where the company had factories. However, all communities consumed Nestle products. The question was therefore how Nestle was going to extend its outreach programmes to other areas in the country.

Ms Mokwena said that in the past couple of years Nestle had been trying to find ways to infiltrate the country. Whatever was done in South Africa was also done in other Southern African countries where Nestle had a presence. It would be easy for the company to get into provinces where it currently did not have a presence if it had a partnership arrangement with government, and a specific project on which to focus. There were initiatives to go into areas where the company did not currently have a presence.

Ms Mda added that Nestle had been working a lot with the Ministry of Health and was currently linked to 60 medical practitioners around the country. She suggested that perhaps through this, Nestle could get details of the people as they were working in provinces.

The Chairperson said that the Committee appreciated the work that was done by Nestle, but the Members wanted to see more corporate social responsibility. The corporate world had to work with government in tackling poverty. There was a trend in government of focusing on Early Child hood Development, and the government could work together with Nestle. The Committee had a right to visit any facility without prior notification.

The Chairperson asked the members if they wanted to have a follow up meeting with the delegation from Nestle.

Ms Kopane suggested that the Committee should have another meeting with Nestle. She noted that the country also had its goals to halve poverty rates by 2014, and the relationship had to work with Nestle.

Mr Pillay asked who would be the constituency representative for Zandzpreit near Randburg in Gauteng.

A member of the Committee said that she would find out for the company.

Mr Pillay said that he believed that Department of Social Development had centres where food was given to the indigent. He asked what had been the success of the programme and what assistance Nestle could provide to government.

The Chairperson replied that the Committee’s role was to have oversight over the Department of Social Development. However, the Department distributed to the provinces and agencies, who then gave food parcels to people awaiting grants. The food parcels were recommended by dieticians and were mostly dry foods such as mqusho, because rural and most poor people did not have refrigeration facilities. There were cases where the food parcels were not sufficient. The Department also looked at the cultural trends of what people ate in those regions.

Other Committee Business: Adoption of Minutes and Committee Annual Report tabling
 The minutes of 13 October 2009 were adopted with technical amendments. Members refused to adopt the Minutes of 20 October 2009, and sent them back for correction because of the quality.

 The Chairperson asked the members of the Committee to look at the Committee’s Annual report, as it would be discussed at the Committee’s next meeting.

The meeting was adjourned.


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