Formal Consideration of the Cooperatives Amendment Bill

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Meeting Summary

The Department of Trade and Industry outlined the main changes, and reasons for them, that were being proposed by Cooperatives Amendment Bill, and stressed that they were aimed at creating a dispensation that would, for practical purposes, result in strengthening and increased sustainability for the cooperatives, enhancing accountability and transparency, and creating a conducive environment for their growth and development. The content of each clause of the Bill was fully set out and explained.

Members agreed that the Bill was necessary. They enquired if a person convicted of a crime would be able to participate as member of a cooperative, and the Department emphasised that this was possible, but that this person was not permitted to be involved as director or manager. They questioned the consultation process, and asked the Department to ensure that the Bill had no constitutional problems. Members asked about the practice that had built up over the years of some officials “helping out” with registrations, which had given rise to abuses, wanted clarity on the agencies to be used, where they would be situated and how they would be staffed and operate. They questioned how “double-dealing” with agencies would be curtailed, how people would be prevented from benefiting from multiple cooperatives and questioned the involvement of provinces and municipalities. Although one Member asked about officials working with government, and their participation, the Department and other Members agreed that this was another issue that would be covered during a further workshop.

The Bill was adopted by the majority of members, with one abstention.

Meeting report

Cooperatives Amendment Bill: Department of Trade and Industry presentation
Mr Jeffrey Ndumo, Chief Director: Cooperatives, Department of Trade and Industry, explained the main changes now being proposed to the Cooperatives Amendment Bill, as well as its practicality in the new dispensation. The main objectives of the amendments were to strengthen and sustain the cooperatives, enhance accountability and transparency, as well as create a conducive environment for the growth and development of the cooperatives.

A detailed account of the main changes being proposed was set out in the attached document (see presentation) and Mr Ndumo took Members through them.

Discussion
Mr F Adams (ANC, Western Cape) appreciated the efforts of the Department of Trade and Industry (the Department) and emphasised the necessity of the Bill. He asked if someone who had been convicted of a crime, but had been rehabilitated, would be able to be involved in the cooperative system.

Mr Sipho Zikode, Deputy Director General, Department of Trade and Industry, answered that a person formerly convicted of a crime would be permitted by law to partake in cooperatives, as a member, but not to be a director or be involved as part of management.

Mr Adams questioned how the Department had gone about its public consultation on the issue, noting that it seemed that most of the consultation was done with companies.

Mr K Sinclair (COPE, Northern Cape) remarked that proper public consultation should be done.

The Chairperson noted that the documentation made available to the Committee showed that consultations had been carried out.

Mr Zikode also confirmed that the Department had held wide consultations, with relevant authorities at levels that included the provinces and municipalities. This had been ongoing since 2009.

Mr Adams asked if the Department was entirely satisfied that there was nothing unconstitutional about the Bill in its current form.

Mr Adams was concerned about the process of registration and said in particular that he was worried about the idea of “helping out” in registration.

Mr Rector Rapoo, Senior Manager, Companies and Intellectual Property Commission (CIPC) explained the rationale behind fast tracking registration. The system had been stopped in the past, due to the fact that it was being used for fraudulent dealings and practices. He confirmed that multiple benefits from agencies would be curtailed through periodic and annual report of beneficiaries. This would expose any individuals involved in wrongdoing. He also noted the criteria for disqualifying persons from becoming directors, saying that any substantiated claim of dishonesty against an individual would disqualify that person.

Mr B Mnguni (ANC, Free State) said that he did not have any questions on the Bill.

Ms E Van Lingen (DA, Eastern Cape) sought clarification on agencies to be used, as well as questioning the locations of such agencies and ways in which they would operate.

Mr Zikode note that the agencies would be used wherever offices were available, and staff would be employed to work in the units. The agencies would offer financial and non-financial support to the people. Agencies that desired to expand were permitted to do so, provided they made due application to that effect.

Mr Sinclair questioned how double dealing by agencies could be curtailed by the agencies.

Ms Van Lingen agreed with this concern, asking if there were any measures in place, such as databases, to counteract persons dealing with multiple cooperatives. She asked for more clarity also on the idea of multiple benefits from agencies and wanted to know how the agencies would be integrated in all the municipalities in the country.

Mr Ndumo responded that each province would be helping out in the integration scheme for the agencies. This was needed for uniformity of support for the agencies across the country. This would hopefully address the past problems where agencies and investments closed. He said also that satellite agencies would be created to cover the whole province satisfactorily.

Mr Ndumo also clarified that an individual was permitted, under the Bill, to belong to multiple cooperatives. However, the Bill did not permit multiple benefits in the same sector. For instance, one individual could, for instance, benefit from the food and the finance sectors. The main emphasis was the service being provided and benefited.

Ms Van Lingen asked about officials working with government and their participation in the scheme.

Mr M Maine (ANC, North West) raised an objection, saying that this was not the correct forum to debate the issue.

Mr Zikode agreed and said that the Department would be arranging for workshops to address the bureaucracy issues.

Adoption of Bill
The Chairperson suggested the Committee go through the Bill, section by section. This was done. Seven Members present supported the adoption of the Bill. One Member abstained.

The meeting was adjourned.

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