Immigration Bill: hearings

Meeting report

HOME AFFAIRS PORTFOLIO COMMITTEE; SELECT COMMITTEE FOR SOCIAL SERVICES: JOINT MEETING
17 APRIL 2002
IMMIGRATION BILL: PUBLIC HEARINGS

Co-Chairpersons: Ms L Jacobus (NCOP, ANC) and Mr D A Mokoena (ANC)

Documents handed out:
Submission by Business South Africa
Submission by the British Chamber of Business in South Africa (see Appendix 1)
Submission by the American Chamber of Commerce (see Appendix 2)

SUMMARY
The Committee heard submissions on the Immigration Bill from the business sector. Key issues raised included the need for a progressive migration policy that encouraged skills to be brought into the country. To this end it was suggested that levies be made as reasonable and clear as possible and the quota system be done away with. It was also recommended that the Immigration Board consist of at least four "experts" in the field of business.

MINUTES
Mr Vic Esselaar, Mr Kobus Kleynhans, Mr Julian Pokroy and Ms Yvonne Temba represented Business South Africa (BSA).

Business South Africa
Mr Esselaar stated that immigration was a topic that "hardens hearts and softens brains" as there was an assumption that a job given to a foreigner was one less job for a South African. The immigration policies of other countries, such as the United States and those in the European Union, showed otherwise. Legal immigrants tended to have a positive effect on the economy because not only were they consumers but also tended to result in a net increase in jobs and growth. It was important for South Africa to emphasise a progressive immigration regime to attract skills into the country. Legal immigrants were not to be seen as a threat, but rather as a competitive advantage.

Although foreign savings can top up domestic savings shortfalls, the major source of funding for investment in South Africa was the private corporate sector accounting for 98.6% of total net capital in the period 1991-2000. Government has been of little help because it has been dis-saving through the 1990's and in effect destroying capital. The old Act, and the culture surrounding it, was unconstitutional, inefficient and philosophically antiquated. It was based on the old lager mentality of drawing the wagons into a circle and not letting any foreigners in.

Regarding the Bill itself, the licensing fee, provided for in Clause 12, would have an effect on domestic and foreign investment by making our effective tax rates even less competitive. Allowing exemptions on clear and unequivocal terms where the employer has a sensible program for training South Africans will also help to neutralise the disincentive effect of the fee. In addition the mining sector should be excluded from the Bill. The greatest number of migrants in South Africa are to be found in the mining sector. These were legal migrants who fall under a formally organised system where there is no leakage or danger. A fee could not only turn marginal mines into loss-making entities but would also negatively affect our neighbours who are dependent upon miner's remittances.

Concerning the Immigration Advisory Board (Clause 28) BSA was concerned about the lack of civil society representation on the board and felt that four individuals with "expertise" should be appointed.

The provisions of the Bill were defective in the lack for a process for view of an arbitrary or unreasonable refusal by the Department of Labour to issue a certificate.

BSA felt that Clause 37, regarding the deportation and detention of illegal foreigners, should be amended to permit an officer to arrest a foreigner if he had reasonable grounds: "if he has reasonable grounds". This would limit the gross abuse of human rights currently reported on foreigners and would be in line with the Constitution.

Regarding employers, there was no need for a reversal of onus in Clause 41(3) as it was unconstitutional. It was recommended that whole of Clause 41(3) and (5) be deleted.

Please refer to the full submission attached hereto.

Discussion
Mr Waters (DP) asked the opinion of the delegation on offering immigrants immediate permanent residence rather than a work permit, which was viewed as less stable.

Mr Esselaar replied that BSA were not proposing that miners be excluded from the permit system. There was currently a well-regulated system in place and it was felt that this should be left as it was without the miners having the additional burden of paying a levy.

Ms Van Wyk (UDM) suggested that the provision of Clause 45 not be scrapped altogether but rather have the offending actions specifically listed.

Mr Esselaar responded that provision was already in place to allow for immediate direct residence in exceptional cases. He agreed that Clause 45 could be better worded to list specific unlawful actions and exclude, for example, humanitarian assistance from the scope of the Act.

An opposition Member questioned the safety of the country if miners from Lesotho were allowed to flood into the country.

Mr Pretorius (NNP) referred to the potential problem of overcrowded courts should provision have to be made for Immigration courts.

Mr Esselaar acknowledged the potential problem but he did not know if the process could be simplified given the Constitutional obligation to provide foreigners with access to the courts.

British Chamber of Business
Mr Patrick MacLaughlin read the submission from the BCB (Please refer to the full submission attached hereto). He stressed that the submission did not make suggestions as to what the wording should be, preferring to leave that to the drafters of the Bill. Concerns highlighted reflected the need for more transparency in the application of the proposed law, greater ease in understanding the proposed regulations by both investors and employers and greater efficiency in the departments applying the law. He emphasised the need to have more law now in order to decrease the amount of regulations needed later.

Among the points raised was the need to better phrase the term "from time to time", which was potentially open to all kinds of interpretation and misconception.

Any levy proposed for a work permit for foreigners would in effect amount to a double tax, bearing in mind the current taxes already levied upon employees working in South Africa. It was suggested that a reasonable fixed fee be promulgated by the Bill, which is both transparent, less onerous financially and more acceptable to foreign countries wishing to invest or local companies on the expansion route.

BCB objected to the principle of quotas as inter alia they were expensive to implement and serving only as a compromise. It was suggested that the whole system of quotas be dropped and a further system of identification by sector be commenced.

BCB found it untenable that there were no restraints upon the Minister with regard to his appointments to the Immigration Board insofar as there are no calls to appoint to the board those with expertise in commerce and business matters. He suggested that four experienced, credible and representative members be drawn from the business sector.

Discussion
Mr Smith (IFP) noted that both delegations had objected to levies and enquired as to the alternative. South Africans should want to employ South Africans first and the cost involved with bringing in a foreigner was a form of incentive. This was a market driven approach to the issue. He did not see the objection to the quota system as it was a commonplace approach that was taken by most of the world. Concerning the powers of the Minister, he felt that Clause 28 left little discretion to the Minister and that his powers were mostly regulated by the Act.

Mr Waters (DP) inquired as to the necessity of having a tax at all if what was needed was to attract skills into the country. On the issue of quotas, he agreed with the suggestion that it be scrapped and skills encouraged into the country.

Mr MacLaughlin clarified that he did not object to the notion of levies but was suggesting the fee be made reasonable and posted up somewhere so that employers could know what it is.
Concerning quotas he said that most countries had a "want" list and a "don't want" list but here one was talking about skills and permits. The inference was that there would be a quota of permits supplied and the complexity of the process would require that the system be dropped.

Regarding the powers of the Minister is was felt that the Bill should explicitly require that people from business be on the board.

Responding to Mr Waters he said that there was an issue of protecting South Africans and the fee system served this end. However, he reiterated the need for the fee to be reasonable and put on notice.

Mr Skhosana (ANC) raised the issue of the Board and asked for Mr MacLaughlin's view on the actual contribution of experts on the Board and what he felt the Board should be.

Mr MacLaughlin replied that BCB's only concern regarding the Board was that there was no defined allocation regarding the makeup of the Board.

American Chamber of Commerce
Mr MacLaughlin read through the written submission made by the American Chamber of Commerce (please refer to the full submission attached hereto), which to a large degree mirrored those suggestions made by the British Chamber of commerce. The American Chamber of Commerce was of the opinion that sections of the amended Bill, although aiming to facilitate the entry of skills, was in fact doing the opposite by not clearly defining the parameters for subsequent regulations to follow.

Mr Mokoena (ANC) asked a representative from the Department of Labour, who was sitting in on the meeting, to explain what SETA was and to have Mr MacLaughlin comment on the makeup of the Board and whether or not it should include foreigners.

The representative from the Department of Labour replied that SETA is the Sectoral Educational and Training Authorities and their purpose is to undertake skills development for the employed by the unemployed.

Mr MacLaughlin remarked that members of the South African business community should be nominated to the Board and this included the possibility of countries that had invested in South Africa.

Afternoon Session
Mr Mokoena reconvened the meeting at 2pm. He said that it was important for Members to come back as he did not want people to think they were being let down. However it was clear that nobody else would be making a submission that afternoon and Mr Vermeulen, the committee clerk, confirmed this.

Mr Mokoena reminded Members to claim their daily stipend of R60 and a further R20 in certain circumstances. He said that Members should claim as much as they could.

Mr Waters (DP) and Mr Grobler (DP) both objected on the grounds that it was not necessary for Members to claim the stipend as they all had homes and a salary, which was sufficient for their needs.

Mr Mokoena said that he was not creating something new but merely reminding the Members of benefits that they could claim. He suggested that those Members who had a moral obligation not to claim, not do so.

The meeting was adjourned.

Appendix 1
SUBMISSION BY THE BRITISH CHAMBER OF BUSINESS IN SOUTHERN AFRICA
ON THE PROPOSED AMENDED IMMIGRATION BILL No 29

Chairperson and Hon Members of Parliament
Portfolio Committee on Home Affairs
Parliament of South Africa
Cape Town
South Africa 19 April 2002

INITIAL COMMENTS
1. The British Chamber of Business congratulates both the Department of Home Affairs and the originators of the proposed Amended Immigration Bill No 29 on what the Chamber perceives as a bold a courageous attempt to reform immigration policy in South Africa. In broad principle and subject to some minor amendments which the Chamber sees important to review in the interests of all South Africans, we wish this Bill a successful passage into law.

2. As the current proposals represent few changes, if any, from the original document that was commented upon previously by the Chamber, we shall repeat our same views conveyed in meetings with the Department of Home affairs in the intervening period, views that have been expressed by the majority of Foreign Chambers in special meetings of bi-lateral chambers of commerce called in the meanwhile to discuss these points. In addition, endorsement of our views has been expressed by the Johannesburg Chambers of Commerce and Industry.

3. The views expressed in this submission have been further confirmed in a survey undertaken in recent months of its members across all sectors of the membership.

4. In order that our comments can be perceived as both constructive and made in the interests of all, we refer to the particular clause and give the reasons for our objections in broad principle. We do not, however, make suggestions as to what the wording should be, preferring to leave that to the parties drafting this particular Bill. If the reasons for our objections are understood, then the necessary changes are easy to implement, in our view.

5. The primary reasons for the changes called for in this submission result from a perceived need by all the parties consulted for more transparency in the application of this proposed law; greater ease in understanding the proposed regulations by both investors and employers and more hope that this Bill will lead to greater efficiency in the various sub-departments around the country applying the law. In fact we want to see more law now, leaving less to regulations later.
Section 12. Work Permits
Para (1) (b) (i)
It is proposed that the words pay into the training fund an amount prescribed from time to time as a ratio of such foreigner's remuneration be dropped and a more equitable system of fees and their payment adopted that is neither punitive or investor unfriendly. This is for the following reasons:

a) The expression "as prescribed from time to time" is an extremely discomforting phrase and open, in our view, to all kinds of interpretation, application and misconception. It amounts, in reality, to law by regulation as perceived by officials, the interpretation being left to that official as to the correct "time" in his or her view.

b) the proposed fee as "a ratio of such foreigners remuneration" would be excessive if applied say at 1% or more, and is clearly just a punitive tax aimed unnecessarily at what is perceived as wealthy people or companies, which is not only unconstitutional but short-sighted. It is neither in South Africa's interests or makes any meaningful contribution to any fiscal reserves. It is both an irritant to those having to use imported skills and a deterrent to investors intending to do business in South Africa. It is an unfortunate extension of the cynical approach "user pays", which does this country's image no good.

c) Any levy proposed in terms of this Bill for a work permit for foreigners in reality amounts to a double tax, bearing in mind the current taxes already levied upon employees working in South Africa and which go to the stated training fund mentioned by this proposed Bill.

Suggestion:
That a reasonable fixed fee is promulgated by this law which is both transparent, less onerous financially and more acceptable to foreign countries wishing to invest or local companies on the expansion route.

Para 1 (a) (ii) of the same section
It is proposed that the words "such certification shall lapse if objected to for good cause by such office of the Department of Labour" be completely reworded with particular reference to the words "for good cause".

Suggestion
To avoid the ambivalence and any possible abuse, reference has to be made to some known regulations, list or published reasons for withdrawal or code of conduct that exists on the subject…. or the whole Bill is of little consequence.

Para 4 (a) of the same Section

It is proposed that the words "adequate" be deleted.

a) There is no competence in the Department of Home Affairs to know if a training programme lodged with the Department of labour is adequate or not.

Suggestion
That certification or evidence of contributions to the national skills levy programme are produced or certification that a training programme is in place.

Para 5 of the same section

a) The British Chamber objects to the whole principle of quotas as horrendously expensive to implement; as a cumbersome and irrational form of bureaucracy that does not relate in any way to dynamic business situations; and usually irrelevant when applied in view of their historical nature.

Quotas merely serve as a compromise. They are usually thought up for difficult situations by persons with no business experience and applied to situations that need rationing in view of scarcity.

In general it has been found that quotas do not work and it is the scarcity of skills in SA that has been used to justify the inordinate expense of their application and use of other people's time. We see no scarcity of permits for skills needed in South Africa and, in any case, South Africa has been at pains in other sectors to get rid of quotas as inoperable and subject to patronage.

b) The use of the terms "needed" and similar phraseology regarding various regulations that can be "prescribed from time to time" further indicate to us the ambivalent nature of this particular section as a whole. Such expressions will make the application of quotas even more confusing to the user and lead to non-transparent application by officials who have little or no understanding of business needs or investment climates.

c) Consultation with business is a costly and time consuming "red herring", in the view of the British Chamber, instituted under the guise of combining with business to solve a problem only perceived within government itself. Furthermore, the quotas so decided would be difficult to implement at all levels of government service, amounting to yet another burden on an already stressed Home Affairs Department official.

d) It is the view of the British Chamber that quota systems of any sort are an unnecessary cost to the taxpayer in these circumstances, a further incumbrance upon job creation and the passing-on of skills to South Africans.

It is proposed that the whole system of quotas be dropped and a further, simpler system of identification by sector be commenced. We cannot see that the need for temporary skilled permits should demand the establishment of such costly and cumbersome infrastructures.

Suggestion
Re-draft the Bill without reference to "quotas"

Finally, attention is drawn to the section regarding the powers of the Minister.

Section 28
The British Chamber finds it untenable that there are no restraints upon the Minister with regard to his appointments to the Immigration Board insofar that there are no calls to appoint to the board those with expertise in commerce and business matters.

a) Such wording indicates a total lack of understanding why the need for work permits, or even migration in most cases, arises in the first place.

Suggestion:
That four experienced and credible, and representative members be drawn from the business sector.

CONCLUSION
In submitting this second submission, the British Chamber conveys to the Chairperson and all honourable members its wish on behalf of all its members that this Bill, when promulgated, results in the application of law and regulations that are both "investor friendly" and enforceable but which at the same time do not hurt those who need the protective arm of government.

We realize at the Chamber that we have all come to live and work in a country with highly divergent needs and interests, with people with different views and attitudes towards skilled assistance and training in the workplace and in a country experiencing change.

British Chamber represents over 300 member companies that have invested in South Africa and we acknowledge that in many instances the viewpoints of others are as important as our own. We hope this viewpoint is reciprocated.

We wish you well in your deliberations and call upon this Committee to ensure that any new legislation governing the issuance of work permits avoids forms of selective or secretive approaches to decision making and that as much governance as possible is conducted in terms of law and by law rather than by regulation, which must in our view be kept to the minimum.

Yours sincerely

Sandra van Lingen
Chief Executive

An oral submission will be made on the British Chamber's behalf, by its representative at Parliament, Mr. Patrick McLaughlin.

Appendix 2
SUBMISSION BY THE AMERICAN CHAMBER OF COMMERCE ON THE PROPOSED IMMIGRATION BILL No 29 AS AMENDED

Chairperson and Hon Members of Parliament
Portfolio Committee on Home Affairs
Parliament of South Africa
Cape Town
South Africa 19 April 2002

WHO IS THE AMERICAN CHAMBER OF COMMERCE IN SOUTH AFRICA?
AmCham was founded in 1977 as a non profit association. It serves as both a forum and a representative body for US business and South African American business interests through the Board of Directors and its committees. Its focus is therefore upon US investment in South Africa. AmCham also interfaces with Government through its working committees with the Departments of Trade & Industry, Foreign Affairs, Finance, Communications and Environmental Affairs.

MEMBERSHIP
Of the 220 members, 67% are US subsidiaries, 14% are US South African companies where the US company is a partner, joint venture, holds equity or provides management or is a major distributor and 19% are South African companies. Fifty seven of our members are Fortune 500 companies. The membership employs more than 125,000 people in South Africa with an investment base since 1994 of over R14billion. Five of the top 15 foreign investors are members of the Chamber. Collectively AmCham members spend over one and half billion Rand annually on matters of social responsibility and community development and matters related to training, skills development, education, health, development welfare and other such spheres of community related work.

AmCham's members span the broad cross-section of the South African economy with interests in banking and financial services, advertising, agriculture, automotive, engineering and construction, chemicals and pharmaceuticals; IT technology and telecommunications, consumer goods and retailing; electronic equipment; liquid fuels, mining, training and recruitment.

INITIAL COMMENTS
The American Chamber of Commerce in South Africa is of the opinion that in the broader context, the proposed Amended Immigration Bill No 29 is a necessary step on the journey of establishing a sound immigration policy for South Africa. However, after careful study the Chamber submits what it considers to be some important revisions to certain portions of the Bill, particularly with regard to the legislation regarding permits for skilled foreign workers.

The current proposals, we note, appear to be little altered from the original document that was commented upon on 17 August 2001 by this Chamber. Our points conveyed in that document still stand, and would point out that we have in the interlude met senior Dept. of Home Affairs officials and discussed our points of divergence on the proposed Bill, as were similarly expressed by the majority of foreign business chambers operating in South Africa. Consequently we have to assume that either our points are not acceptable or that the opportunity for change still exists and no alterations have been made to the printed document.

We therefore repeat what we previously submitted as initial comment. AmCham has considered these proposals from a foreign investor viewpoint. The objective of any foreign investor must surely be to find a growing market in which there are clearly evident opportunities to establish and grow market share; where there is an environment of free trade; and where there are few restrictions placed on the ability to develop and provide the products and services that the market demands.

When foreign investors evaluate the situation in South Africa this will be against a background of investment opportunities elsewhere.

Investors always seek stability, predictability, profitability and clarity in any opportunity in which they invest. Absence of these does not necessarily preclude investment but it absolutely results in a discounting of the value of the investment. When any of these variables is absent or unclear, investors always assume the worst scenario and subsequently translate that view into their investment evaluation.

In conclusion, AmCham adds that the primary reasons for the changes called for in this submission result from a perceived need by all the parties consulted for more transparency in the application of this proposed law and greater ease in understanding the proposed regulations by both investors and employers.

Section 12. Work Permits
Para (1) (b) (i)

It is proposed that the words pay into the training fund an amount prescribed from time to time as a ratio of such foreigner's remuneration be completely reviewed and a more transparent and reasonable fee system is devised which is neither punitive or which duplicates with other fees and levies in South Africa for "training" purposes. It is the AmCham view that on matters of training and skills education, the Department of Labour should remain as principals on all matters as they facilitate the skills levy fund.

1) More clarity is sought on what fees are involved. This kind of confusion to the reader is what will occur in the mind of an investor. The expression "as prescribed from time to time" is vague and disconcerting and open, in our view, to all kinds misconception. It amounts, in reality, to law by regulation as perceived by officials.

2) The proposed fee structure merely increases the cost of doing business in South Africa. It will, in fact, amount to a double tax since employers are already paying a skills levy on the salaries of all employees.

Suggestion:
That a reasonable fixed fee is promulgated by this law which is both transparent, less onerous financially and more acceptable to foreign countries wishing to invest or local companies on the expansion route.

Para 1 (a) (ii) of the same section
It is proposed that the words "such certification shall lapse if objected to for good cause by such office of the Department of Labour" be completely reworded with particular reference to the words " for good cause".

1. It is indicated that no reasons for a refusal to grant a permit have to be given when a refusal is made. This is both unhelpful and non-transparent and can lead to a number of unfortunate conclusions. It would assist in the interests of transparency and good-governance if reasons are always stated and will lead to a better understanding of policy and what South Africa's requirements are.

Suggestion
To avoid the ambivalence and any possible abuse, reference has to be made to some known regulations, list or published reasons for withdrawal or code of conduct that exists on the subject.

Para 4 (a) of the same Section
It is proposed that the words "adequate" be deleted.

The adequacy of any programme must remain determined by the sectoral SETA involved.

Suggestion
That certification or evidence of contributions to the national skills levy programme is produced or certification that a training programme is in place. We cannot see how the Dept of Home affairs, or its officials, are in a position to discuss or assess with investors or employers training matters.

Para 5 of the same section

1) The American Chamber does not wish to support the process of creating job quotas in any form and experience in such matters leads to the belief that a quota system is a cumbersome and inaccurate reflection of the state of a country's job requirements. It is a burden upon a taxpayer.

2) Furthermore, quotas in this case would not be able to keep pace with rapidly changing business conditions since their formulation is based on historical conditions.

3) We cannot accept any other system than the basic, simple idea that should a work permit be needed for a skilled worker it is considered on its own merits based upon the need in that specific application.

Bearing in mind that AmCham advises that quota systems will be a most unacceptable basis for controlling the allocation of work permits, then the following comments are also made in respect of Para 5.

4) The use of the terms "needed" and similar phraseology regarding various regulations that can be "prescribed from time to time" further indicate to us that clarity is needed.

Suggestion
Re-draft the Bill without reference to "quotas"

Finally, attention is drawn to the section regarding the powers of the Minister in matters relating to the formation of the Immigration Board.

Section 28
In order for the Bill to perceived as "good" legislation and serving both those who fall under its wording and those who wish to apply it, it is AmCham's view that the wording should include a point of reference where the Ministry, the Department or the Minister, can obtain guidance on business parameters in order to guide decision making as it affects the business sector.

AmCham finds it surprising that there are no provisions for the appointment of local or foreign business representatives on the proposed Immigration Board.

Suggestion:
That representatives be drawn from the business sector to represent the interests of commerce and industry and the interests of foreign investors that have already invested in South Africa.

CONCLUSION
Owing to the major skills crisis in South Africa, which limits both new and increased investment, AmCham is concerned that the sections of the Amended Immigration Bill No 29 as proposed, although aiming to facilitate the entry of skills, is in fact doing the opposite by not clearly defining the parameters for subsequent regulations to follow. Clarity is called for in the anchor law itself in order to avoid confusion in any regulations which may follow.

AmCham hopes that serious consideration will be given to these points and thanks the Portfolio Committee once again for the opportunity to present views before them. It is hoped that any new legislation governing the issuance of work permits is conducted in terms of clearly defined legal parameters thereby reducing subsequent regulations to the minimum and decision making on applications more transparent.

Yours sincerely
Luanne Grant (Mrs)

American Chamber of Commerce in South Africa.