Committee Report on Walmart/Massmart Merger Public Hearings

Economic Development

21 November 2011
Chairperson: Ms E Coleman (ANC)
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Meeting Summary

The Committee deliberated on the edited Committee Report on Walmart/Massmart Merger Public Hearings which included both oral and written submissions. It was not adopted.

A Democratic Alliance member expressed concern that some of the information from the submissions should not be included because they went against the sub judice rule. The Chairperson said the report spoke only to what transpired during the hearings; it did not talk to the Committee's personal opinion.

The Chairperson informed the Committee that changes had been made to the delegation for the study tour to Brazil. Due to complaints by South African embassies that they were receiving different SA government officials one after the other for the same reason, the Speaker and NCOP Chairperson had decided that Members would only be allowed to visit a country once. The delegation would consist of Members that attended meetings regularly and had not been on a study tour that year with another committee. The Chairperson was concerned that many of the Brazilian entities had not yet confirmed meeting with the delegation. Also, the delegation was supposed to join the Development Bank of Southern Africa when it met with the Brazil National Development Bank, but DBSA had recently cancelled the combined meeting. The Committee Secretary was given a day to confirm the appointments with all Brazilian entities, or the Committee would apply for the study tour to be postponed until January.

Meeting report

Committee Report on Walmart/Massmart Merger Public Hearings
The Chairperson reminded the Committee that public hearings on the merger had taken place on 19, 20 and 21 July 2011. The Committee Report had been edited and she was satisfied that the report accurately reflected what had transpired. She requested that Members deliberate on the report as tabled.

Mr S Marais (DA) asked for clarity on who had written the report and whether the report was based on the written submissions or verbal submissions. There seemed to be many contradictions in the report.

The Chairperson replied that the new Committee Secretary had written the report and it was based on both the oral and written submissions. As there were so many written submissions, not all could be granted the opportunity to do oral submissions for budgetary reasons. The Committee could not avoid considering either type of submission.

Mr Marais said that his query did not have anything to do with the volume of submissions but it had to do with National Assembly rule 67, which said that some of the submissions had not been “done” as directed in the advertisement. Legal advisers had told the Committee that the issue of the merger was sub judice and some of the submissions could not be entertained. If the submissions could not be allowed in the public hearings, then how could they be included in the report?

The Chairperson said that it was clear that she could not disregard any of the submissions received. This was unfair to the people that had made written submissions. She did not think there was anything wrong with the way the report was written, but if Members disagreed with anything contained in the report, then they were at liberty to say so.

Mr Marais replied that he disagreed with the way the report was written but the Committee could carry on.

Mr X Mabasa (ANC) stated that the product of the report was determined by what happened in the meeting. If an issue that had to be corrected, then it could be corrected in the meeting. This was the purpose of the meeting where Members could see if they agreed or disagreed with the content of the report.

Dr P Rabie (DA) noted that the report was quite lengthy, so the sooner the Committee started with it, the better. The Chairperson agreed.

Deliberation on the Report
The Chairperson said that the Committee would deliberate on the report page by page:

Page 1,2 and 3
Members did not make any changes to these pages.

Page 4
Mr Marais addressed the section that spoke to the South African Commercial, Catering and Allied Workers Union (SACCAWU) submission. He said that if the Committee looked at the content on Page 4 and referred back to Page 2, which said the merger was still under appeal at the Competition Appeal Court, then all the factual information, whether presented verbally or orally, was still sub judice. The Appeal Court had not made a ruling on the matter yet.

The Chairperson asked Mr Marais to specify what the problem was.

Mr Marais said that certain parts of the document, such as the section that referred to the number of Pick ‘n Pay jobs that would be lost as a result of the merger, was still information that was with the Appeal Court. In his opinion, anything that dealt with the sub judice rule should not be included in the report. The hearing had not been finalised and could even go to the Constitutional Court.

Mr Mabasa indicated that the points included in the report were all made during the hearings. There were points that were made in the hearings that were rejected but these were not included in the report. Therefore, the report was quite in order. The purpose of the hearing was to let relevant stakeholders make inputs so the Committee could make informed decisions.

The Chairperson noted that when the hearings were held, legal advisers helped the Committee to distinguish which matters were sub judice and which were not. She remembered a few Members, including Mr Marais, had posed questions concerning employment, and these had been allowed in the meeting. Legal advice had been sought on whether the matter fell within the sub judice rule. This was why the report could address this matter. Mr Marais had participated with this, so she did not know what the problem was.

Since there were no substantial changes, the Chairperson moved on.

Page 5
Mr Mabasa suggested that the word “erases” in the sentence “Walmart had a history of behaving in an anti-competitive manner that erases small businesses” should be changed to “destroys”.

Mr Marais said that the paragraph spoke to the history of Walmart and its uncompetitive behaviour. This was factually wrong (in terms of what was allowed in the rulings), and impacted on a public opinion that would be formed on the prejudice of Walmart. As the matter was sub judice, it was considered factually wrong.

The Chair noted that Mr Marais was addressing a completely different matter than that raised by Mr Mabasa.

Mr Marais replied that amending “erases” to “destroys” also went against the legal advice given to the Committee. The matter was sub judice and the Committee could not talk to those issues.

The Chairperson asked if Mr Marais thought the entire paragraph should be deleted.

Mr Marais replied in the affirmative.

Mr Mabasa said that the matter did not fall within the sub judice rule. The report spoke to the impact the merger would have on small businesses in all areas including rural areas and townships. He stood by his suggestion to replace “erases” with “destroys”.

The Chairperson reminded the Committee that the report contained the highlights of each submission; it was not what the Committee was saying. The paragraph contained information supplied by Equal Education.

Mr Marais replied that he had also objected to this statement during the hearing.

The Chairperson agreed that there were certain statements that had been rejected at the time, but there were statements that Members had objected to that the legal advisers had disagreed with and hearings had continued. She was not saying that what Mr Marais had said was irrelevant but she just wanted to remind him what had happened. The report contained what was said in the hearing.

Ms Tsotetsi (ANC) reminded the Committee that legal advisers had been there during the entire hearing and had guided the Committee as to what could or could not be said. This meeting was to ensure the submissions were captured correctly in the report.

Mr Ntuli (ANC) wondered if Mr Marais was going to object to what was captured for the American Chamber of Commerce in South Africa as well, because it contained the same sort of information.

Mr Marais reiterated that anything that was contradictory to the sub judice rule, whether it was in favour of the merger or not, could not be included in the report.

Ms Tsotetsi said that in the interest of the meeting, the Chairperson should note Mr Marais' concern and continue with the deliberations.

Mr Marais noted that BUSA's submission was not recorded in the report.

The Chairperson answered that it was.

Mr Marais asked the Chairperson to refer the Committee to BUSA's submission.

Ms Tsotetsi proposed that the Committee deal with the report and at the end Members should say whether any information had been left out.

The Chairperson appealed to Mr Marais to follow the report as agreed. She understood the excitement around the report but thought it should be treated like any other report dealt with in the Committee – in a sober and consistent way.

Page 6 and 7
No changes were made.

Page 8
Mr Marais asked where BUSA's submission was included in the report.

The Chairperson told Mr Marais that the rules were clear. The Member should look at the report and say whether he felt anything contained in BUSA's submission had to be contained in the report. Mr Marais was not following the correct procedure. If he felt parts of the submission had to be slotted in, he had to indicate what information had to be included.

Mr Marais noted that the report excluded everything about the BUSA submission.

The Chairperson asked Mr Marais to assist the Committee. The Member was saying that the submission had been excluded.

Mr Marais said that he did not have the submission so he could not point out specific information.

The Chairperson replied that Mr Marais had to have taken notes during BUSA's submission.

Mr Marais said that BUSA's complete submission had to be included in the report or nothing at all.

The Chairperson took it that Mr Marais did not have any information to assist the Committee with and Members would proceed with the deliberation.

Page 9, 10, 11 and 12
Members did not make any changes to these pages.

Page 1 3and 14
The Chairperson noted that page 113 spoke to general observations.

Ms Tsotetsi noted that bullet 1, 3 and 4 spoke to the same issue, which was public interests and had to be contained under recommendations.

The Chairperson noted the similarities and asked Ms Tsotetsi to remind the Committee of her suggestion when they came to the recommendation section in the report.

Page 15
The Chairperson noted that the Committee's recommendations were included on this page.

Mr Ntuli stated that “FDI” should be written out in full to state, “Foreign Direct Investment”.

Mr Marais said that Recommendation 6.2 spoke to the need for a statutory body that could consider substantive FDI coming into the country and whether such FDIs met the development interests of the country. However, the Committee had not discussed what “development interests” were, so to say that a statutory body was needed, could not be supported.

The Chairperson asked what Mr Marais would like the recommendation to look like.

Mr Marais replied that if the Committee did not have a definition for development interests, then the recommendation had to be removed for now.

The Chairperson suggested that the
Committee could include in the recommendations that the definition for developmental interests still had to be clarified.

Mr Marais answered that the Chairperson's suggestion would suffice and it would serve as a term of reference to what the statutory body should be.

Dr Rabie said that Brazil had a body that reviewed FDI. The Committee could look into this on their oversight trip.

The Chairperson noted the Committee's agreement that this matter should be followed up in Brazil.

Ms Tsotetsi reminded the Committee about the three bullets under Observations that spoke to public interests. She suggested that they should be made into one point and shifted to Recommendations under bullet 6.3, which also spoke to public interests.

Ms van der Merwe (ANC) noted that the Committee had spoken about the need for the concept “public interests” to be defined. This could be included in Recommendation 6.3.

Mr Marais said Ms van der Merwe's suggestion was good, but he disagreed with Ms Tsotetsi that these observations should be moved to the Recommendations. However, it also had to be captured in the Recommendations.

Ms Tsotetsi said she did not mind if the observations were not moved, but the Committee had to find a way to fit it into one bullet point.

Mr Marais suggested that the first observation remain the way it was, and the other two should be sub-bullets under the first bullet that spoke to public interests.

Ms van der Merwe suggested that bullet point 1 remain as it was and that bullet 3 and 4 be combined into one bullet.

The Chairperson noted the Committee's agreement to amendments to bullets 6.2 and 6.3 of the Recommendations.

Ms van der Merwe proposed an amendment to recommendation 6.7, which said that agreements of FDI that were of a significant nature should avoid ambiguity that would result in disputes at a later stage. The recommendation was unclear. She proposed that it should state “agreements with international investors, which are of a significant nature, should be clear and unambiguous to avoid disputes at a later stage”.

The Chairperson noted the amendment.

Other matters
Dr Rabie asked why BUSA's submission had been omitted.

The Chairperson clarified that this could have been an omission on the side of those that had put the report together. If Members felt that there was anything that should be included from the BUSA submission, she could accommodate that. She would give Members until the end of the day to make any additions to the report. If Members agreed, then the submission would be included in the report.

The Chairperson noted the Committee's agreement. She would respond to Members in the morning.

Mr Marais noted that Massmart had prepared quite a lengthy submission for the Committee; however, only two points had been included in the report. He asked if this was the same situation as with BUSA or if it was intentional.

The Chairperson replied that there had been 38 submissions and BUSA and Massmart were not the only submissions that had been excluded. The report included information and points that had been identified by the Committee.

The Chairperson noted that deliberations on the report were concluded. She asked the media to be mindful that the report was still in draft format and still had to be finalised and put in the parliamentary papers for public consumption. The Committee wanted to avoid any “sensationalisation” and confusion by the media. She asked the media to respect the procedures of the Committee and urged them to act responsibly.

Committee’s Upcoming Oversight Visit to Brazil
The Chairperson said the House Chair had called her about the oversight visit to Brazil about a ruling by the Speaker and the NCOP Chairperson. The Speaker said that Committees should avoid visiting one country many times because some countries had complained that they were receiving Members of Parliament, municipal officials and other government bodies from South Africa one after another. It was decided that Committee visits would be limited, especially where Committees were visiting countries for the same purpose. The House Chairperson had noted that several Committees had already visited Brazil, but the Committee's motivation was a little different to the other Committees. However, with respect to the oversight visit to Venezuela, the Committee on Public Enterprises had already visited the country on the same matter. He recommended that the Committee look at the report written by the Public Enterprises Committee on its study tour to Venezuela. This which would be circulated to committee members.

The Chairperson informed the Committee that the constitution of the delegation would also have to change. The House Chairperson said that Members were allowed to visit foreign countries only once a year. Members belonged to several committees and it became unfair to other Members when some could visit other countries more than once when others did not get the opportunity at all. She was told to look at the composition of the study tour delegation again. She had to consider whether Members attended the Committee regularly and if Members had travelled with their other committees. This had been done and recommendations had been approved by the Speaker. Some Members had complained that it was unfair that they had been limited in this way, but these issues were out of her control. The Chairperson said that only Members that had not been on a study tour were considered.

She told Members that there had also been complaints that the delegations were too large, and that many of the Members did not participate in the interactions with other countries. This complaint came from the South African embassies. These study tours had to be taken very seriously. Members would be allowed to have free time but they had to understand the reason they were going abroad. She appealed to Members included in the delegation to research Brazil's current political and economic situation before they went.

The Chairperson said a few entities within Brazil had been identified that the delegation wanted to interact with, but some of the entities had not yet confirmed because they had been asked quite late. There were actually quite a few that had not confirmed.

The Committee Secretary replied that entities were still confirming whether they would meet with the Committee. He was positive that many more would confirm based on the discussions that he had had with them. The day after the delegation arrived in Brazil, they would have a day of rest. However, a tour could be arranged for them. He noted that the delegation was supposed to meet BNDES, Brazil's national development bank, on 30 November but they would only be able to meet on 1 December, which was a travelling day for the delegation. This left the day open, but BNDES would look into meeting the Committee on another date. Some of the meetings were confirmed while others were not.

The Chairperson noted that there were many entities that had not yet confirmed their meetings with the delegation, which was quite worrying. She noted that the Development Bank of Southern Africa (DBSA) would be joining the delegation on its meeting with BNDES.

The Committee Secretary informed the Committee that DBSA had said it would not be joining the delegation; they would be meeting the BNDES on their own.

The Chairperson explained that the DBSA was going to be meeting the BNDES on 30 November 2011 and she had thought that it would be appropriate to join them, given that they were discussing important issues. The DBSA served the same interests the Committee was serving. However, now they were saying that they did not agree to a combined meeting. Now 30 November was left open, which meant the delegation would have two days in Brazil doing nothing. She wondered why DBSA had agreed and then left it to the last minute to tell the Committee it had changed its mind. She thought perhaps she should talk to DBSA about it.

The Chairperson also worried that there were too many entities that still had to confirm their meeting with the delegation. If entities did not confirm then there was no point in going. If by tomorrow, the meetings had not been confirmed, then the study tour would have to be cancelled; there was no point in continuing with the trip. But the Committee had to blame itself for this as well as the way Parliament was working. The application sat with the Committee Section for two weeks when it was supposed to be given to the House Chair. The Committee was told that it was with the House Chair but this was not true.

Mr Marais said a visit like this had been in the works for a long time and had already been postponed. It seemed that there had been a “dragging of feet” in the parliamentary arena and this was unprofessional.

The Chairperson noted that the Committee was supposed to be leaving on 28 November 2011. This study tour had been processed since September and it still was not finalised. It was her opinion that it would be no use in going if all the meetings were not confirmed by tomorrow. She did not know if Members wanted to risk waiting as tickets would be bought and accommodation would be reserved. It seemed that if they cancelled late there would be fruitless expenditure. There was nothing wrong with postponing and going next year when the Committee was fully prepared. She suggested that an application would be made to the House Chairperson to postpone the trip to January if there were no confirmations by the Brazilian entities by tomorrow. She gave the Committee Secretary one more day to ensure that the meetings were confirmed.

She noted the Committee's approval of the suggestion.

The meeting was adjourned.


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