Presence of foreign nationals within South African Labour Market: briefing by DTI & Labour - Day 2

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Employment and Labour

16 August 2011
Chairperson: Mr M Nchabeleng (ANC),
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Meeting Summary

The meeting was a follow up of the previous day. The Committee was interested in knowing how the Department of Trade and Industry operated in the permits sector and how they processed applications. The strategic intention was to look at matters related to job creation in South Africa - while admitting that no economy in the world could grow through the use of domestic labour alone; hence foreign involvement was needed.

The role of dti’s Trade and Investment South Africa was to facilitate an increase in the quality and quantum of foreign and domestic direct investment by providing efficient and effective investment recruitment. A number of priority sectors had been identified such as mining, automotive, oil and gas and bio-pharmaceutical industries to name a few. In terms of the Immigration Act, the dti, on behalf of companies working in South Africa, facilitated matters such as corporate work permits, intra-company transfers and waiver letters. However, the dti did not support the employment of foreign labour if the skills required were available in South Africa. It was noted that the dti did not have a mandate to enforce compliance.

The Department of Labour pointed out that there was not any specific legislation that dealt with migrant workers. Its role in migration management was that it recommended a number of permits to the Department of Home Affairs. The recommendations were based on whether there was a presence or absence of the requisite skills in South Africa.

Meeting report

The Chairperson said the meeting was a follow up to the previous day’s meeting with the Department of Home Affairs. The Committee was interested in how the dti operated in the permits sector, processing of applications. The strategic intention was to look at matters related to job creation in South Africa while admitting that there was no economy in the world that could be run through the use of local resources alone and grow through the use of domestic labour only. He asked what role did the dti play in the giving of permits, how the dti including Trade and Investment South Africa (TISA) marketed South Africa to the outside world and whether potential investors were told of their obligations apart from the benefits they could receive.

Department of Trade and Industry input
Ms Pumla Ncapayi, Deputy Director-General: Trade and Investment South Africa, Department of Trade and Industry, said that the objective of the Trade and Investment South Africa branch was to facilitate the increase in the quality and quantum of foreign and domestic direct investment by providing an efficient and effective investment recruitment, problem solving and information service in order to retain and expand investment in South Africa. TISA’s objectives were to increase the quantum and quality of foreign and domestic direct investment by identifying, packaging and promoting major investment project profiles. It provided facilitation and aftercare to service both new and existing investors in conjunction with stakeholders in order to retain and attract additional or new investments. There were a number of priority sectors that had been identified for foreign direct investment such as mining, bio-fuels, automotive, aerospace, tourism, oil and gas, bio-pharmaceuticals and infrastructure development. A brief description of TISA’s one stop shop for investment promotion was given. This included investment climate and policy advocacy, investor servicing which included development, package preparation and delivery, and aftercare. This one stop shop  included sector and skills development and promotions which included image building and branding.

There were  a number of service offerings such as investment recruitment which included promotion of investment opportunities, marketing investment projects and guidance with plant or site allocations, plus investment information. Information was disseminated about incentive packages, the regulatory and legal environment and information on housing, education, schooling, labour market and recruitment firms.

In terms of the Immigration Act, the dti facilitated on behalf of companies investing in South Africa corporate work permits, intra-company transfers, own business permits and waiver letters in respect of the R2.5 million requirements. It was noted that the dti did not support the employment of foreign labour if the skills required were available in South Africa. In addition permits were evaluated in terms of the IPAP and New Growth Path priorities. Certain multinational companies required specific key personnel normally for finance or managerial posts. A disparity was noted between the supply and demand for skills such as the upgrade for Cell C and Vodacom to 4G which required specialised skills which were not available in South Africa; hence foreign skills were needed to complete the project which was of national importance. The dti encouraged businesses to comply with labour and immigration legislation since the Department did not have any legal mandate to enforce compliance. The presence of foreign nationals in the labour market was necessary due to skills shortages and this was supposed to be facilitated.

Statistics were  given of the number of applications that had been facilitated by TISA for the period of January 2010 to July 2011. The total applications received were 321 and 224 had been recommended; 77 business permits and 147 corporate permits. There were  97 permits that had not been recommended. In addition, there were a number of sectors such as consultancies and second hand car industries where business permit applications were not issued.

In terms of the way forward to address the challenges, the dti proposed that an interdepartmental task team with the DHA, at the Deputy Director General level, be established in order to fast track permitting issues for investors. In addition the dti proposed that the task team be extended to include the DoL as a tripartite task team to look at labour, permitting and fast tracking of such issues.

Department of Labour (DOL) input
Mr Sam Morotoba, DOL Deputy Director-General: Public Employment Services, began by giving a brief legislative framework of the Immigration Act as there was not any specific legislation that dealt with migrant workers. The current labour legislation was said to apply equally to migrant workers who worked in South Africa, both legal and illegal. As a member of the ILO, South Africa was required to embrace the spirit and intention of the Convention of Migration for Employment and the Convention that relate to Migrant Workers to name a few. The role of the DoL in migration management was explained. The DoL made recommendations to the DHA on a number of permits such as the general work permit, corporate work permit, quota work permit and exceptional skills work permit. The process that an employer had to go through was elaborated on. In respect of general work permits, recommendations made by the DoL to the DHA were based on the presence or absence of the requisite skills within the South African labour market and the applicants or employer's compliance with labour legislation.

The challenges that the management of migrant labour faced were presented to the Committee. The DoL's labour centres received regular complaints such as the widespread abuse and exploitation of migrant workers, undermining of existing labour standards, inferior standards being offered to migrant workers, abuse of the work permit system and overlooking of local labour. The DoL faced complexities in enforcing compliance, with an insufficient legal framework on the DoL side to address aspects relating to migrant workers and the exploitation of policy gaps by some employers. It was emphasized that there was a need to protect vulnerable South African citizens against unfair competition for scarce employment opportunities within the country by foreign labour migrants.

There were going to be improvements under the new Employment Services Bill. The Bill sought to strengthen existing employment services functions that remained within the DoL under the Skills Development Act. The Employment Services Bill drew on a wealth of international experience and best practice and it sought to assist employers and job seekers to adjust to changing economic situations. The provisions of the Bill would enable the DoL to work closely with other departments and stakeholders in migrant labour management. An example was given of Clause 9 which provided for the employment of foreign workers, a determination by the Minister of the categories under which foreign nationals could be employed and a skills transfer plan in the event that a skilled foreign migrant was employed. In addition Chapter 3 provided a legal framework for the registration and licensing of private employment agencies in order to protect citizens and foreign nationals.

There were other proposed interventions to deal with the challenges faced such as the strengthening of coordination, policy intervention and enforcement amongst the DoL, DHA, the dti and the SAPS. There would also be a strengthening of the DoL's capacity across labour centres to efficiently and effectively manage migrant visa applications and enforce compliance.

Mr I Ollis (DA) said that the presentation by the DoL was better than the one they had presented the previous day. He thanked the dti for its presentation. The inclusion of a labour representative on the Inter-Departmental Task Team was very important since it was important that the DoL interact with the dti on matters of economic concern. He asked if South Africa had signed the ILO Conventions.

Ms A Lovemore (DA) noted that Clause 11(b) of the Immigration Amendment Bill referred to business permits. She asked the dti to comment on the fact that foreigners were supposed to employ a prescribed number of residents or permanent residents. She asked if the dti was involved in developing the prescribed requirements for Clause 12 that related to Intra-Company transfers. In relation to Clause 13, she noted that no corporate visas were going to be renewed or issued to businesses that were undesirable and the only industry that had been named by the Department of Home Affairs was the stripping industry. She asked if the dti was involved and what was meant by the term ‘undesirable’. One of the departments had to be responsible for looking at the long term needs of South Africa. She asked if the dti was responsible. The Member  noted that there was a shortage of certain skills but consultancy was one of the areas in which business permits were not issued by the dti. As such there were only two limnologists in the country and hence if someone wanted to establish a limnology consultancy business, the dti had to issue that person a permit. In addition she asked if the Inter-Departmental Task Team was in existence and if it was operational. The Member noted that no record was kept of the skills of asylum seekers by the Department of Home Affairs. Was the DoL not interested in such information? The Member went on to give an example of a number of Zimbabweans who were well educated yet they held jobs as gardeners and this did not make sense especially in light of the fact that South Africa was short of skills. Lastly she asked how the Employment Services Bill and the Immigration Amendment Bill would mesh.

Mr G Boinamo (DA) asked why the DoL did not have a mandate to enforce compliance since this created loopholes for people to commit crimes. In order to curb the inflow of illegal immigrants, there was a need to ensure that people in South Africa had the relevant documents. The respective Department such as the SAPS, SANDF, the Department of Home Affairs and the Department of Justice had to be committed. In addition, when people were arrested, the Department of Justice did not do enough to prosecute and sentence people.

Mr F Maserumule (ANC) noted that before 1978 there was no single law that governed the movement of refugees. He asked the dti what was meant by the term waiver letters in respect of mentioned R 2.5 million.

The Chairperson said that any comments about other departments such as the Judiciary were supposed to be made with certainty and Members had to avoid wild allegations.

Ms Ncapayi responded that the first meeting of the Task Team was scheduled for 6 September and the Department of Home Affairs had committed itself. The dti did not have a legal mandate because they were only implementing what the DHA had given them a mandate to do. The implementation of such a mandate resided with the DHA. One of the challenges that the dti faced was to decide if there was a need for an Investment Act in South Africa since such an Act could address compliance matters.

Ms Wilna Barnard, dti Deputy-Director: Trade and Investment South Africa, said that what she was going to say was not cast in stone since discussions were still underway. In terms of Clause 11B the challenge was that an employer was required to employ five South African citizens. The term ‘employment’ was loosely defined hence a person could employ five people who were not required for his business such as a domestic worker or a gardener. Hence the employment had to be commensurate to the business that was being conducted. In relation to the Intra Company transfer, the dti gave some suggestions to the DHA in terms of the prescribed requirements. In addition, the permit was critical for investors. The dti was not involved in regulation drafting but the DHA was going to invite the dti at a later stage.

In terms of Clause 13 there were sectors that were not being promoted and the dti was working together with the South African Revenue Service (SARS). One such industry was the second hand motor cars industry. Plus there was a team within the department that was looking at the long terms skills that were needed in South Africa. The Department had to look at each particular sector and ask what skills were needed. ‘Consultancy’ was an area that was difficult to determine whether such a consultancy was needed. Ms Barnard said that the point that had been made by Ms Lovermore would be taken on board. The Task Team was not operational yet. She noted that it was said that South Africa was not a destination of choice for highly skilled people. A process was currently being conducted by the dti, DoL and DHA to make it easy for highly skilled people to come into South Africa. In terms of the legal mandate, the dti only gave recommendations to the DHA. The dti did not have the authority to go onto sites.

Ms Barnard responded to the question of the waiver letter by saying that if a person wanted to start a business, the minimum money that was needed to invest in South Africa was a paltry R 2.5 million. If one showed that the person could bring in R 2.5 million through a letter from a chartered accountant then the DHA did not need to refer the letter, but it could immediately make a decision. Further, if a person could make a very good business case to the dti then the dti would issue that person a waiver letter which enabled him to open a business with less than R 2.5 million.

Ms Lovemore asked if there would be changes in respect of the waiver letter when and if the new Bill came into effect

Mr Morotoba said that there were challenges of convening the Immigration Board meeting. In addition he said that South Africa had not ratified the Conventions but the requirement was that where the Conventions were ratified, every active member of the ILO was supposed to work to embrace the spirit of the Conventions. The only time when a country would be bound to every single principle of the Convention was when a country had ratified the Convention. In terms of the long term needs of South Africa, the intention of the DoL was to ensure that whatever it did, it acknowledged the contribution of foreign workers and that foreign migrant workers were not supposed to impact on existing labour standards and the rights and expectations of South Africans. On the question of records, he responded that section 10 was an attempt to get records. However it was very difficult to get information on migrants and this was one area they were targeting in order to get the information necessary for planning purposes. The issue of highly skilled Zimbabweans doing low skilled jobs was a difficult one. It was the same with highly skilled South Africans who worked in New Zealand parking cars and doing other manual work. The issue went hand in hand with the requirement that in order to gain citizenship, a person had to stay a required number of years in a country. Mr Morotoba agreed that the situation was very difficult to handle.

Ms Lovemore noted that the management of refugee systems opened up the system to abuse. Refugees included people who had fled wars and persecutions hence they could not have gone through the normal channels of applying for a permit. She asked how the waiver requirements changed with the new Immigration Act.

Ms Barnard said that the issue had not yet been decided hence nothing had been written down yet. The business visas were going to be in line with international best practice. A certificate would be issued by TISA to verify the statement made and the business plan and that certificate would be taken to the DHA. Hence the onus did not rest on DHA to check if a business was viable or not. The dti intended to raise the capital contribution because R 2.5 million was laughable and waivers would only be given in exceptional cases.

The Chairperson noted that some of the matters presented were not relevant to what the Committee was interested in knowing but nonetheless the information was very informative. There was a need to have South Africans learn from the skills that had been imported. He reiterated that the meeting was not a xenophobic meeting. There was a need for foreigners to know that there were laws in the country that had to be complied with.

The meeting was adjourned.


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