Economic Development Portfolio Committee: Outstanding Reports

Economic Development

22 February 2010
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Committee met to consider and adopt two outstanding minutes from the previous year. The minutes dated 20 October 2009 were adopted with a few minor amendments, while the minutes dated 10 November 2009 were deferred as Members had concerns about how the report was constructed.

Members also approved two outstanding oversight reports. The first report dealt with the Committee’s visit to 4 companies that were said to have been in distress and which were financed by the Industrial Development Corporation’s (IDC’s) intervention fund. The purpose of the visits was to investigate the work done by these companies after the IDC’s financial intervention. Members commented that the companies were not sure what the funding should be used for. They also decided to visit the Vrede Textile (Pty) (Ltd) company again to see if there were any improvements. The second report covered the Committee’s visit to 3 different ports of entry to oversee the investigation by the South African Revenue Services into custom fraud. The Committee agreed that there was a need to revisit Durban Harbour and OR Tambo International Airport. Both reports were adopted with amendments.

Meeting report

Adoption of Outstanding Minutes
Minutes dated 20 October 2009
Mr Z Ntuli (ANC) opened the meeting as the Chairperson was delayed. He tabled the minutes dated 20 October 2009 for consideration.

The minutes were adopted after a few grammatical corrections were made.

Ms H Line (ANC) noted that the Committee was unable to monitor the agreements they had with the South African Revenue Services (SARS). She suggested that SARS should provide feed back on the follow ups that they promised to do.

Me Ntuli reminded Members that SARS had sent the follow up Reports. He requested the Committee Secretary to re-send the reports to Members.

Ms D Tsotetsi (ANC) wanted clarity about how much was used by SARS to investigate corruption.

Ms Line asked when the Customs learnership programme was going to start operating as SARS was in short supply of custom skills.

Minutes dated 10 November 2009
The Chairperson opened floor for Members to make inputs.

Members pointed out that there were a lot of incomplete sentences and paragraphs that were not properly constructed. In its current form, the minutes were unclear and would create some confusion.

The Chairperson proposed that the adoption of the minutes be postponed to the next meeting.

Ms Tsotetsi suggested that Members pass on their corrections to the Committee Secretary so that when they met again they did not have to go through the same process again.

The Committee agreed that the minutes would be adopted at the next meeting.

Adoption of Outstanding Reports
Oversight Report: Companies in Distress
The Committee had visited 4 companies that were said to have been in distress and which were financed by the Industrial Development Corporation’s (IDC’s) intervention fund. The purpose of the visits was to investigate the work done by these companies after the IDC’s financial intervention.

There were no grammatical corrections except that the attendants register for Committee members were excluded in the Draft Oversight Report. The Chairperson asked Members to make their observations and recommendations about the visit.

Ms Line observed that Vrede Textile (Pty) (Ltd) (hereafter referred to as Vrede) did not have marketing personnel and only focused on one major client instead of all clients.

Mr X Mabasa (ANC) said that there was some confusion about what the funding should be used for. The IDC had to be firm and clear about how the money should be utilised. It was intended for companies not to retrench their workers. There were no collaborations and interaction between the Departments and State Owned Enterprises (SOEs) which was the reason why some companies did not comply with government intentions.

Mr S Ngonyama (COPE) said Vrede was ignorant about identifying opportunities on the African Continent which was important for its survival. He also stated that the company did not include workers in Labour agreements- this could lead to collapse of its investors.

Ms Line asked the IDC to explain whether the action they took of not disclosing the Marketing Grant led to corruption amongst IDC Members.

Mr P Rabie (DA) noted that the management in Vrede was not good it was not clear who the Chief Executive Officer (CEO) was. He suggested that the Committee had to revisit Vrede to see if they had turnaround strategy in place.

The Chairperson reminded the Committee that Vrede was in the process of transferring 60% of Majority holding to the CEO. The Committee needed to check whether there were any improvements.

Mr Ntuli observed that some of the companies were not clear as to what the money from IDC should be used for. As a result, some did training on lay offs skills after they had retrenched workers and used the money to sustain production instead of reinstating retrenched workers.

Ms Tsotetsi suggested that the Committee should meet with the Department of Labour to share their findings and recommendations. She also urged trade unions to participate so that they would know if the retrenched workers were called back after the Company received money from IDC.

Regarding the Oversight in York Timber Holding Ltd, there was nothing much that could have been done by the Committee as the company said they were not prepared for the Oversight visit. The Committee only observed that the workers were not informed about the objectives of the funding as to whether it was a conditional grant or Government intervention. The Committee also noticed that the Company had used its allocation to pay its creditors.

The Chairperson agreed with Members that they had to visit Vrede again and that they had to do a follow up with the IDC.

The report was adopted with amendments.

Oversight Report: Customs Fraud
The Committee visited 3 different ports of entry to oversee the investigation by the South African Revenue Services into custom fraud.

Mr Ngonyama suggested that the Committee had to visit Durban Harbour again so that they could give Members a comprehensive Report.

The Chairperson supported this proposal and suggested that the Portfolio Committee on Defence Force accompany the Committee on such a visit.

Mr Mabasa suggested that firmer steps had to be taken on the Lebombo Boarder Post to secure the safety of the recovered goods. He also recommended that there had to be measures in place controlling all vehicles kept in the boarder.

Mr Mabasa stated that they had to invite other relevant Portfolio Committees when they visited OR Tambo International Airport as joint Portfolio Committees would do a better job than one.

The Chairperson was impressed with the laser security system as the Committee had witnessed its effectiveness during their oversight visit. She also suggested that they had to do their visitation to OR Tambo International Airport before the Soccer World Cup.

The report was adopted with amendments.

The meeting was adjourned.





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