SA Post Office SOC Ltd Bill: Department of Communications briefing, Richtersveld rights transfer: Alexkor briefing

NCOP Public Enterprises and Communication

30 August 2011
Chairperson: Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The Department of Communications briefed the Committee on the South African Post Office SOC Ltd Bill (the Bill), noting that the Post Bank Act had been passed in July 2011, and this Bill was linked to it. Post Bank was a subsidiary of the South African Post Office, and together these two institutions brought services to people in remote and rural areas where no other banks or public offices were operating. The Bill had been passed by the National Assembly on 16 August 2011. A presentation was given setting out the main clauses in the Bill, and noted that the Executive Board would be managing the decision-making process. Members sought clarity as to why both the Minister of Finance and Minister of Communications were involved in decision making, which the Department explained was due to the Post Bank being a financial institution, and the need to create better synergy. Members asked about the representation of the two trade unions on the Board, questioned the appointments process and why the Minister did not appear to be permitted to dismiss the appointees, and sought clarity on the role of Parliament, expressing some concern that the National Council of Provinces was not given an equal role to that of the National Assembly. Members asked if at any stage the Post Office could be changed to become a private entity, and how this could be done. They also sought clarity on the quorum, presently stated at 75%, were concerned whether there were sufficient protective measures to guard against any abuse of power, and sought clarity on the legal status of the entities.

Members had previously met with and been briefed on the transfer of land and mining rights at Richtersveld, and asked questions to establish the progress in these matters. Members asked how much Alexkor had accumulated through the venture, and what the expenses were, enquired about the upgrading of the township and/or town, and asked what had been done in terms of job creation of both permanent and temporary posts. They were concerned that only one out of six people on the Joint Venture Board was female. Members sought more details on Alexkor’s involvement in the Joint Venture, and its operations on its own, and asked if any future business would be incorporated into the Joint Venture. They called for more details on what had been done to assist those who were retrenched, and in particular if financial assistance was given to them to farm their land, asked what was being done in respect of rehabilitation, asked for further details on the opportunities mentioned in the presentation and on the exploration ventures. The Committee said that it would be useful to visit the area again.    

Meeting report

SA Post Office SOC Ltd Bill: Department of Communications briefing
Ms Rosey Sekese, Director General, Department of Communications, noted that the Post Bank Bill was approved by Parliament in 2010, was signed by the President in December 2010 and finally was promulgated as the Post Bank Act on 22 July 2011. She noted that Post Bank was a subsidiary of the South Africa Post Office (SAPO). This was a critical innovation from government, and served to provide essentially bank-services to people in remote and rural areas, so that they did not have to travel long distances to use other banks that were mostly located in the towns.

She noted that the South African Post Office Soc Ltd Bill (the Bill) was in synergy with the Post Bank Act. This way of establishing and running entities would be adopted by many other State Owned Corporations (SOCs) that were currently reporting to the Department of Communications (the Department).

She added that the Department was busy also with other work that was of benefit to economically-disadvantaged communities, especially women, the youth and the disabled. It was also important to note that the Post Offices existed in all areas of the country, and provided service delivery there.

She noted that the Bill had been presented to, and approved by, the Portfolio Committee on Communications and the National Assembly, on 16 August 2011.

She then gave a slide presentation (see attached document) in which the main purpose and clauses of the Bill were explained. In particular, she pointed Members to the clauses regarding the appointment of and the duties of the Executive Board.

The Chairperson thanked the Department and encouraged Members to read the whole Bill for themselves in more depth, to ensure that they had a comprehensive understanding of it. She added that when this Bill was passed, the Committee would like to hear more about its successes and challenges.

Mr H Groenewald (DA-North West) asked for more clarity about the roles of the Minister of Finance and the Minister of Communications, and particularly asked if it was correct that it was not necessary to have the concurrence of the Minister of Finance, or how far that Minister would be involved in the whole process.

Mr Willie Vukela, Acting Chief Director, Department of Communications, responded that the Portfolio Committee had decided, after the public hearings, that it would be necessary to allow for consultation also with the Minister of Finance because the Post Bank was a financial institution, and the consultation process would lead to better synergy.

Mr M Jacobs (ANC-Free State) asked for clarity on slides 36 and 39, and asked whether the two trade unions who were to be invited to represent the workers would be chosen from the majority of the unions within the Post Office, or if seats would be shared equally. He asked what would happen if, for instance, three unions were representing workers.

Mr Vukela noted that the Bill followed the policies established in 1996, to the effect that when a Board was established, the Minister must appoint a person from each union representing the workers of the entity to the Board. In this case, there were two unions. Should another union come into being, then the Minister must decide how to accommodate it.

Mr Jacobs enquired whether it would be possible, at any future stage, to change the status of the Post Office, for instance, to a private entity. If so, then he asked where these provisions were in the Bill, and with whom this power would reside.

Mr Alf , Director: Legal, Department of Communications, replied that the form of the Post Bank and Post Office were determined by legislation. The Post Bank was state owned. Only Parliament would be able to change this, as there would have to be a repeal of this legislation if there was any suggestion that it should be converted to a private bank.

Mr Jacobs also questioned slides 59 and 66, noting that these mentioned presentations to the National Assembly, but asked whether the other houses were not involved. In particular, he asked why the Department should not also make presentations to the Select Committee of the National Council of Provinces (NCOP).

Mr R Tau (ANC-Northern Cape) asked for further clarity on the role of Parliament in relation to this Bill. The Minister had to submit the Annual Report to the National Assembly. However, there seemed to be contradictions because the Bill appeared to recognise that the Public Finance Management Act (PFMA) requirements also played a central part, in relation to accountability and oversight.

Mr Vukela said that the role of Parliament was not in fact limited, and it was given a role to make improvements, as it could prescribe certain matters to the Minister in order to improve the running of the institution. He did not think there were any contradictions with the PFMA.

Mr Tau asked about the quorum of the Board, who would essentially be responsible for making decisions. The Bill seemed to suggest that 75% of members would constitute a quorum, but the figure of 70% was also mentioned. He pointed out that the quorum must surely be a set figure.

Mr Wiltz said that the quorum requirements had been altered by the Portfolio Committee, because they recognised that it was necessary to limit the extent to which matters could be delegated. Three quarters of the members had to be present to constitute a quorum.

Mr Tau asked why the Minister had authority to give approval for the appointment of a Chief Executive Officer or board member. However, he did not seem to have the authority to remove such an incumbent, and he asked why there appeared to be this contradiction.

Mr Z Mlenzana (COPE-Eastern Cape) asked what power the Minister would have, and also wanted more clarity on the provisions around consultation. He was particularly concerned whether there was sufficient in the Bill that would avoid any abuse of power. He asked whether there was sufficient separation between the decision making processes and the general operations processes.

Mr Wiltz noted that it was not only the Minister who made these decisions, but the Board also played a role in ensuring that the right candidates were appointed.

Mr Tau asked why the Bill, when first presented, was titled “South African Post Office Bill” but the National Assembly had made an alteration so that it now read “South African Post Office Soc Ltd Bill”.

Mr Wiltz responded that this was in fact not an alteration but a correction. The Post Office had always been State-owned and it was felt that this should be emphasised, so that people clearly understood it, and so that the correct full title was reflected in the Bill.

Mr Mlenzana asked for clarity on the definition of the autonomy of the Post Bank, noting that it was a subsidiary of the Post Office.

Mr Wiltz noted that the Post Bank was a separate legal entity from the Post Office. Therefore there was autonomy of the Post Bank. The separation between the two meant that one could not tap into the finances of the other, and that the roles could not become confused, and that there was separate legal protection for each. The SAPO was, however, the holding company of Post Bank.

Mr Mlenzana said that he was concerned because he had the impression – and hoped that it was wrong - that the Department of Communications seemed simply to want the National Council of Provinces to “rubber-stamp” the Bill. There seemed to be far more emphasis on the role of the National Assembly.

Ms Sekese wanted to assure Members that the Department did take the Select Committee very seriously and respected the decisions made by Members. If she had given another impression, then she wished to apologise and stated that this was certainly not her intention.

The Chairperson thanked the Department and urged it to provide full answers on outstanding matters at the next meeting with the Committee.

Richtersveld land and mining rights transfer: Alexkor Limited briefing
Mr Wiaan Basson, Mine Manager, Alexkor and Ms Kethiwe McClain, Chief Executive Officer, Alexkor, tabled a document (see attached presentation) setting out the Richtersveld land and mining rights transfer, and said that they could outline the progress made on the joint venture in the Northern Cape with the Richtersveld Mining Company (RMC).

The Chairperson mentioned that the Committee was only interested in hearing about the progress made by Alexkor, and about the successes and failures of the venture. He pointed out that this was not the first time that the Committee had met with Alexkor and the Committee had already been fully briefed.

Members then proceeded to ask questions to get clarity on the issues.

Mr M Sibande (ANC-Mpumalanga) asked for clarity on how much money Alexkor had accumulated through this venture, and the amount of the expenses.

Mr Sibande wanted more clarity on the upgrading of the township in the Northern Cape. He was not sure whether the whole town, or just the township portions of it, were to be upgraded in terms of the agreements with the Municipality.

Mr Sibande asked what Alexkor had done thus far in terms of job creation in the areas in which it was conducting mining operations. He wanted to know the numbers of both permanent and temporary jobs.

Mr Mlenzana mentioned that he was concerned about the appointment of the Joint Venture Board. There were six members on this Board, but only one was female. He asked who was responsible for ensuring that there was proper gender representivity.

Ms McClain added that members of the Joint Venture Board had been chosen by the community. The other three Members of the Board were chosen by Alexkor. Alexkor held the majority share and had the right to appoint members to the Board.

Mr Mlenzana asked for more details on how Alexkor would be operating in future. He wondered if it would only be operating in its own right, or as part of a Joint Venture, and what status it would have when branching out into other parts of Southern Africa.

Mr Groenewald noted that the RMC had an acquisition of 49%, but Alexkor held 51%, and he thought that Alexkor was probably receiving benefits from the marine mining, whereas the RMC was mining on land, and needed more heavy equipment, which cost more. He asked for clarification of this. He also wanted to know why no profit was made for the last five years.

Mr Anthony Kamvongoma, Acting Director General, Department of Public Enterprises, responded to the questions on the Alexkor Corporate venture and the Joint Venture. The joint venture between Alexkor and RMC was in Alexander Bay alone and all mining rights with regards to operations here were equally shared. Should Alexkor acquire any new opportunities outside of this area, then it would do so as Alexkor Corporation, and that would be the sole beneficiary, as it would not form part of the joint venture. All new operations would be entirely separate from the Joint Venture.

Mr Groenewald said that there were problems with the people who were retrenched from Alexkor. Although some of them were given land to farm, they were not properly financed and now had no income to finance themselves. He wanted more details on exactly what assistance was to be given, and whether anything had been done to help them.

Mr Groenewald noted that the area of mining operations looked very bad and was not at all pleasing to see, and asked what Alexkor had done or was doing in terms of environmental rehabilitation. He suggested that the Committee should pay an oversight visit to the area, so that it could see matters for itself and suggest what could be done to improve.

Ms McClain said that those who were attending to rehabilitation were all local people.

Mr Groenewald asked for a further explanation on the “24 opportunities” mentioned in the presentation.

Mr Tau asked for further clarification on the exploration and asked how much was being made from the venture.

Ms McClain responded that an amount of R200 million had been allocated for exploration. She said that she would send through a breakdown of what had been spent, what had been re-allocated, and what was outstanding.

Mr Tau asked for further details on the contractors, asking for their names, their background, and what they were doing to contribute to economic development, skills development and job creation.

Ms McClain responded that there was a vigorous process followed to appoint contractors. Advertisements would be placed in national and local newspapers calling for tenders, and the Tender Committee would then carefully assess the applicants to establish whether they met the necessary predetermined criteria. Local contractors with local ownership were preferred. The contractor must prove financial and technical soundness and competence to carry out the job.

Mr Tau agreed with his colleague that it would be useful to have an oversight visit during which the Committee could also interact with the community to find out what their concerns are, whether Alexkor was addressing them, and to hear their impression of the successes and failures.

The Chairperson asked Alexkor to explain the reasons why one of its mines was shut down last week, apparently due to safety issues, and pointed out that this was not the first time that this had happened with an Alexkor mine.

Ms McClain said that in fact the mine was not shut down. This was an issue arising from a mine inspection, and Alexkor had responded to the allegations to put the record straight. Certain vehicles had not been used because they were not considered to be safe and roadworthy.

The Chairperson also asked for information about programmes being established for the youth and women in those areas.

The Chairperson thanked Alexkor and the Department of Public Enterprises for their answers and asked that written answers be sent to the questions that were not responded to at this meeting. The Committee would be paying an oversight visit to Richtersveld.

The meeting was adjourned.


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