Gambling Review Commission Report
The Minister of Trade and Industry gave the Committee a brief overview of the Gambling Review Commission Report, saying the Commission would present more thoroughly to Parliament at a later stage. He emphasised that the report did not necessarily reflect the views of his Department or government, and it was simply the findings of the appointed commission. The Minister reported that the Commission proposed that the number of casinos in
The Minister said the Wall-Mart/Massmart merger was a special case for
SADC-EAC-COMESA Tripartite Initiative and Free Trade Area Negotiation
The Minister said this was considered the next big integration process amongst African nations. It was an attempt to leverage economies of scale by integrating trade amongst African nations. The Development Integration process was the modul of choice as African nations had to learn from the European and international integration experiences, while at the same time acknowledge the realities specific to
The Committee was briefed on the progress made with the redraft of the Intellectual Property Laws Amendment Bill. The aim was to have the redrafted Bill ready for the Committee to deliberate on by August.
The Committee also received a briefing on the Budget Review and Recommendation Report (BRRR) process. Section 32 expenditure reports for the four quarters of the financial year should be requested from the Department. Further, a new version of quarterly reports was required with a column on financial information. The DTI should include financial performance indicators as opposed to only quantitative performance indicators. The Department had been requested to furnish financial information reflecting quarterly expenditure of individual programmes. This would assist in ascertaining incidences of fiscal dumping and adherence to the value for money principle.
Minister on Gambling Review Commission on South African Gambling Industry and its Regulation
The Minister of Trade and Industry, Dr Rob Davies, introduced this topic, saying he would present only a brief overview of the Gambling Commission Report, highlighting the main recommendations in the report as the Commission would have an opportunity to present this more comprehensively at a later stage.
At the time of the new democratic dispensation in
Constitutionally, gambling was considered a joint provincial and national competence, serving as a major source of revenue for certain provinces. Four different modes of gambling were permitted in
• Forty casinos were permitted in
• Horse racing
• Limited payout machines (maximum of R500 payout)
It was decided to engage in this study to keep abreast with the advance of technological and other changes in the gambling environment. He referred to online gambling from areas outside
Dr Davies said the Department held the overall approach of regulating gambling rather than banning it. However, it could also not just treat all these technological changes in an ad hoc manner. An overarching set of guidelines was required to guide the way forward. In this regard the Gambling Review Commission was established to conduct a study on gambling in
The Commission’s report had several indicators which highlighted the propensity of the activity in the country. South Africans had shown to have a relatively higher propensity for gambling. In what the report defined as the ‘developed affluent community’, gambling patterns were described as consistent with
Dr Davies reported that the Commission proposed that the number of casinos in
Dr Davies said the limited payout sector had not proven as lucrative as other forms of gambling and it found itself in a difficult position. Perhaps in an attempt to address this, there was a request to place limited payout machines at racecourses. Developments in technology had caused bingo machines to increasingly resemble traditional casino machines and did not look and feel like bingo anymore. All of these factors had contributed to the current Act possibly not being comprehensive enough, specifically because it did not adequately regulate electronic gambling. Other games, such as Fafi, required more research.
The Commission had drafted its report and it would now be presented to Parliament to engage with and then to present the Department with its guidance.
He cautioned that the South African market did not contain infinite opportunities for gambling since social issues and community impact had to be considered as well.
He reiterated that this was the Commission’s report and he had only sought to give brief a overview thereof. The Commission itself would present a more comprehensive presentation to Parliament at a later stage. Members could more meaningfully interrogate the report at that time.
Mr B Radebe (ANC) welcomed the report.
Ms Fubbs welcomed the tabling of the report saying it was not a requirement to table it in Parliament but it enabled Parliament to take this report further. She thanked the Minister.
Mr X Mabaso (ANC) asked whether the Commission had researched the effect of gambling on older persons and scholars.
Dr Davies said he did not want to expand much more on the report at that stage. He would really appreciate the guidance of the Committee and Parliament on the matter. There was anecdotal evidence indicating the impact of gambling on older persons and scholars but he could not recall whether a comprehensive study had been completed.
Ms Fubbs said this was the first comprehensive study into gambling in
Dr Davies continued with an update of the Wall-Mart/Massmart process, saying there were many myths about the government stance on the Wall-Mart/Massmart issue, which he hoped to clarify in the meeting. He wanted to make it very clear that
On the other hand
The entry of Wal-Mart, one of the world’s biggest employers, second only to the Chinese army, into the South African retail environment was a special case and should be treated as such.
The Competition Commission initially accepted Wal-Mart’s entry into
He explained that Wal-Mart had an extensive international procurement network. This could force others in the industry to increasingly procure their products abroad as well, to remain price competitive. The result could have negative repercussions on local procurement of retail goods. This understanding led the parties into the current process.
Dr Davies welcomed the conditions set by Competition Tribunal such as Wal-Mart could not retrench staff for two years and employees who were recently retrenched would be given special consideration when Wal-Mart sought to employ new staff.
He was not informed though, why government’s recommendations were not included in the conditions set before Wal-Mart but added that this matter was still subject to court proceedings and he did not want to discuss it in too much depth.
The presence of Wal-Mart presented a major change in the
Mr N Gcwabaza (ANC) asked for more clarity on the fate of recently retrenched staff in the affected companies and whether the two-year ban on retrenchments imposed on Wal-Mart could be renegotiated, upon its expiry.
Dr Davies said Wal-Mart was prohibited from retrenching staff for two years but thereafter it was not bound to any agreement. The retrenched employees would only receive preferential consideration for re-employment at Wal-Mart, and nothing more. Members should remember that Wal-Mart like all companies in
Mr Mabaso asked whether companies could play up one country against another by threatening to set up shop in a neighbouring country.
Dr Davies did not think this was feasible for Wal-Mart. Wal-Mart also wanted to enter
Mr Radebe complimented the Department’s handling of this matter.
Ms Kotsi-Ramotsamai (Cope) said
Dr Davies replied that the country seemed to achieve certain successes from a change in the retail system. There was an older system that was used before where retailers were given an incentive to substitute local production. If a company in
He said 10% of
Mr J Smalle (DA) asked if the Department would be involved in the administration of the fund. Were penalties specified if Wal-Mart should breach the conditions imposed on them? Lastly, which of government’s proposed conditions were not imposed on Wal-Mart?
Dr Davies said the details concerning the establishment of such a fund still had to be resolved but that government would have representation on the fund’s management.
Ms Fubbs said R100 million seemed like petty cash for a big company like Wal-Mart. She asked if it could be ensured that Wal-Mart did not simply use foreign trainers thereby sending half the fund out of
Dr Davies said that the only mechanism the country had to deal with these types of mergers was the competition process. Other countries such as
Dr Davies said the R100 million fund was a proposal made by Wal-Mart during the proceedings. The company had argued for much of the negotiation process that no conditions should be imposed on it. Government responded that it had the right to defend its economy against a sudden, abnormal surge of imports. The government argued that it had the right to monitor the process and that if there were an abnormal surge in inputs they would assume it was at the expense of local jobs and industrial development. The onus would then be on Wal-Mart to show that this was not the case. But, the Tribunal went with Wal-Mart’s proposal for the R100 million fund. The details of this proposal would still have to be worked out. The issue was that some retailers still wanted to have some local supplies such as fresh fruit and vegetables. But, what about the marginal areas where there were industrial jobs at stake? What was R100 million over three years going to amount to? These were some of the country’s concerns.
Ms Fubbs agreed that it seemed
Dr Davies said there was a wide range of tools employed by other countries to protect their local industries. There was the Intellectual Property Laws Amendment Bill. Members were aware of the status of the Bill. There was also the Co-operatives Amendment Bill that was currently sitting before Nedlac. The aim of the Bill was to provide for co-operative specific institutions. The legislation arose because of the policy discussions about co-operatives. The problem was that co-operatives were treated as if they were small subsets of businesses. There was a need to establish a set of institutions such as a co-operative advisory board, a co-operative development agency, a co-operative tribunal, and a co-operative training academy. He anticipated coming to Parliament in September 2011 to inform Members of the Bill, but it will probably only be dealt with next year. The Black Economic Empowerment Bill (BEE Bill) was with the lawyers at the moment that were working on the draft amendments. The Estate Agencies Affairs Bill was also being discussed and there were a few issues that had to be resolved. It would be brought to the Committee in September once the issues were resolved. The National Credit Amendment Bill was anticipated to be submitted in April 2012. The Bill looked at debt counseling issues. There were major consultations for the Lotteries Amendment Act. There would be a major restructuring of the Act to align with the countries priorities. The Business Act was very important as well. As of 1994 the Business Act governed matters such as applying for a license to open a business. This responsibility was delegated to provinces in 1994. There was a sense that the Business Act was incapable of dealing with a number of issues and abuses from a number of illicit businesses that were being set up. The DTI and COGTA were in the process of looking at the legislation. It would come to parliament some time in the future. The DTI was also focused on Industrial Development Zones (IDZs). A new act was needed to sort out governance issues regarding these IDZs. He mentioned the protection of strategic industries and the protection of national champions.
SADC-EAC-COMESA (Southern African Development Community-East African Community-Common Market of East and Southern Africa) Tripartite Initiative and Free Trade Area Negotiation
Dr Davies said mineral rich Africa would be the next growth area after China and India, especially due to the growth in the raw mineral sector internationally. When considered on its own
President Jacob Zuma hosted the 3rd Tripartite summit on 12 June 2011. The integration process included 26 African countries and was intended as a vehicle to grow regional markets. It focussed on the development integration model which required a Free Trade Area (FTA), cross border infrastructure development and a more liberal movement of business people within the region.
He said the South African President, Jacob Zuma, had been designated to champion the North-South Corridor of the multifaceted integration process.
Dr Davies said theoretically formal trade integration developed in stages as the integration process advanced within the entities involved. Again theoretically this meant starting with preferential trade agreements, progressively developing into a free trade area, a customs union, a common market, an economic union, and lastly a political federation. Theoretically the process worked best when the economies of the integrating entities shared significant complimentarity. This was not the case with most African economies that conducted most of their trade with partners outside of the continent. Intra-African trade was comparatively much more modest
Infrastructural underdevelopment often caused goods from countries in East Africa to take a very long time to reach geographically-close
In terms of industrial development, three main developmental areas had been identified: advancing mineral exploitation into industrial development, moving from agricultural production to the processing of food products and developing the pharmaceutical industry.
He said SADC-EAC-COMESA would be the next big integration process. The principle behind establishing this process was fundamentally member driven, with give and take negotiations. This meant that countries would bear reciprocal and proportional roles, given the differing capacities of the nations involved. He insisted this would not become a back door for products produced outside the region to enter
Mr A Alberts (FF+) said it was worth exploring the debt contagion experience currently affecting much of
Mr Smalle asked if the Department had done an impact assessment of this integration process on the
Dr Davies said this integration was very important and stressed South Africa could find itself disadvantaged in African trade, given the trade negotiations between some African states and Europe. The current trade surplus that
Regarding pharmaceutical development, he said the major pharmaceutical companies often did not invest sufficient research in diseases specific to the African experience.
The Committee passed the minutes of the meeting held on 08/06/2011 and 10/06/2011 respectively.
Intellectual Property Laws Amendment Bill Progress on Redraft
Adv Charmaine van der Merwe, Parliamentary Legal Adviser
, briefed the Committee on the progress made with the redraft of the Intellectual Property Laws Amendment Bill. The aim was to have the redrafted Bill ready for the Committee to deliberate on by August.
Concept Document on the Budget Review and Recommendation Report (BRRR) Process
Mr Zibele Ngxishe, Senior Researcher for the Committee, provided a briefing on the BRRR process designed to track expenditure and outcomes relative to the allocated budget. He said that Section 32 expenditure reports for the four quarters of 2010/2011 financial year and quarterly reports for the current year should be requested from the Department. Further, a new version of quarterly reports was required with a column on financial information. The DTI should include financial performance indicators as opposed to only quantitative performance indicators. The Department had been requested to furnish financial information reflecting quarterly expenditure of individual programmes. This would assist in ascertaining incidences of fiscal dumping and adherence to the value for money principle.
The Committee unanimously expressed satisfaction on the update and praised Mr Ngxishe for his diligent work.
Ms Fubbs commented on the difficulties Mr Ngxishe had had in accessing information from the Department. She pointed out that the Committee was not a “gentleman’s oversight committee” and asked that the Department’s response to Mr Ngxishe’s requests for information be improved as soon as possible. She said the Committee did not want surprises at the end of the financial year in terms of expenditure and insisted on enhanced communication with the Department. She said nonetheless the BRRR process had taken off to a good start.
- Gambling Review Commission Report
- Tripartite SADC- EAC-COMESA Initiative and Free Trade Area Negotiation
- Executive summary of Review of South African Gambling Industry & its regulation
- Gambling Review Commission Report presentation
- LEGISLATION – 2011
- Intellectual Property Laws Amendment Bill Progress on Redraft
- Concept Document on the Budget Review and Recommendation (BRRR) Process
- Briefing Notes for Minister R Davies in preparation for presentation to Portfolio Committee on Trade & Industry
- Draft Concept Document on BRRR Process
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