Special Economic Zones Bill [B3B-2013]: Negotiating Mandates

NCOP Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour

04 February 2014
Chairperson: Mr F Adams (ANC, Western Cape) (Acting)
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Meeting Summary

The Committee considered final negotiating mandates from all nine provinces. The provinces were unanimous in their support for the Bill. The Free State Province however had a typing error in its final negotiating mandate and the Committee agreed for it to be corrected prior to its submission to the House.

Just as the Committee was about to accept the Bill, the Department of Trade and Industry (DTI) expressed its reservations on an amendment relating to Clause 25. The DTI considered the amendment as material and therefore found it problematic. The amendment provided for ministerial powers to make regulations in respect of entities to be governed in the special economic zones.
A Ministerial letter had been sent to the Chairperson of the Committee in regards to the amendment. The letter from the Minister stated that from a Ministerial perspective the amendment was an unnecessary Ministerial intervention. The entities in question were already governed by other pieces of legislation. The Minister did not wish to be seen as interventionist where entities were already regulated by an existing framework. The DTI was therefore not in agreement with the amendment as contained in the Bill.

The Committee appreciated the concern expressed by the DTI over the amendment but was adamant that any changes to the Bill at this stage would delay the process and the Bill would consequently lapse. This could not be allowed as the Bill was considered too crucial for South Africa. Everyone was expecting the Special Economic Zones and the process could not be delayed any further. The Committee felt that if the Bill required a change, it could be amended by the fifth Parliament that would be sitting after the upcoming elections.

The Bill was adopted without any amendments.
 

Meeting report

In the absence of the Committee Chairperson Mr D Gamede (ANC, Kwazulu-Natal), the Committee unanimously elected Mr F Adams (ANC, Western Cape) as the Acting Chairperson.

Special Economic Zones Bill
The Acting Chairperson emphasised that the Bill was a very important one and amongst other things, it was crucial for the economy and job creation. The provinces had considered the Bill and had forwarded their final negotiating mandates to the Committee so the process of the adoption of the Bill would not be stalled. All parties were unanimously in favour of the Bill as it was a crucial piece of legislation. The Bill was going to enhance South Africa’s competitiveness on the global market.
The Acting Chairperson asked delegates from the provinces to present their respective final negotiating mandates to the Committee.

Eastern Cape Province           
Ms E van Lingen (DA, Eastern Cape) stated that the Eastern Cape Province voted in favour of the Bill.

Free State Province
Mr B Mnguni (ANC, Free State) said the Free State Province voted in favour of the Bill. He, however, pointed out that there was a mistake in the typing of the numbering of the Bill. The numbering in the final negotiating mandate would be corrected from [B3B-2013] to [B3D-2013].

Ms B Mncube (ANC, Gauteng) was concerned that perhaps the Free State Province had voted on the wrong version of the Bill.

Mr Mnguni assured the Committee that it was only a typing error.

Ms D Ranto (ANC, Eastern Cape) was of the opinion that the Free State Final Negotiating Mandate was materially flawed.

Adv Charmaine van Der Merwe, Parliamentary Legal Adviser, explained that the A-list of amendments had amended the B3B Bill. She noted that there was also a C-list of amendments and the Bill as amended was the B3D version. The documents were all correctly numbered.

The Acting Chairperson asked whether the Free State Final Negotiating Mandate with the typing error would be able to withstand a legal challenge.

Adv van Der Merwe answered that it would.

Ms Shamara Ally, Procedural Officer: National Council of Provinces (NCOP), added that the Committee had sufficient votes for the Bill to be passed. As Mr Mnguni had stated, the typing error would be corrected before the Free State Final Negotiating Mandate was forwarded to the House.

The Acting Chairperson suggested that the Free State Final Negotiating Mandate be parked for the time being in order for the error to be corrected. There were sufficient votes in favour of the Bill in order for it to go ahead.

Mr Mnguni said the Free State Final Negotiating Mandate was, legally, a valid document.

The Acting Chairperson said he understood Mr Mnguni’s point but said there was opportunity for the Free State Final Negotiating Mandate to be rectified.

Mr Mnguni agreed that the document could be corrected.

Gauteng Province
Ms B Abrahams (DA, Gauteng) stated that the Gauteng Province voted in favour of the Bill.

Limpopo, KwaZulu-Natal and Mpumalanga Provinces
In the absence of the delegates from these provinces, the Acting Chairperson read out their respective final negotiating mandates which stated that they had all voted in favour of the Bill.

Northern Cape Province
Mr K Sinclair (COPE, Northern Cape) said the Northern Cape Province voted in favour of the Bill.

North West Province
Ms V Keketsi (ANC, North West) said the North West Province voted in favour of the Bill.

Western Cape Province
The Acting Chairperson noted that the Western Cape voted in favour of the Bill.

The Acting Chairperson pointed out that eight provinces had voted in favour of the Bill. This was excluding the ninth positive vote from the Free State Province which was being kept aside for the time being until the Free State Final Negotiating Mandate document could be corrected.

Mr Johan Strydom, Legal Adviser, Department of Trade and Industry (DTI), stated that it was not his intention to interrupt proceedings but he would appreciate it if the Committee allowed him to bring to their attention the issue regarding the second amendment in the C-version of the Bill.

The Acting Chairperson interjected, saying if there was any change in the Bill whatsoever, the Bill needed to be referred back to the provinces.

Mr Strydom continued that the C-version of the Bill contained two amendments. The DTI did not have an issue with the first amendment. The second amendment relating to Clause 25 was a material amendment and the DTI had an issue with it. The amendment provided for ministerial powers to make regulations in respect of entities to be governed in the special economic zones.
He said there had not been agreement on the amendment at the time when it was dealt with. He pointed out that the Committee had requested Adv van Der Merwe to draft the amendments and she had consequently submitted it to the Committee. A Ministerial letter had been sent to the Chairperson of the Committee with regards to the amendment. The letter from the Minister stated that, from a Ministerial perspective, the amendment was an unnecessary Ministerial intervention. The entities in question were already governed by other pieces of legislation. The Minister did not wish to be seen as interventionist where entities were already regulated by an existing framework. The DTI was not in agreement with the second amendment. The amendment had been initiated by the Gauteng Province. He requested members to reflect on what he had just said.

The Acting Chairperson said he understood where Mr Strydom was coming from but if the Committee had to take into consideration what he had just said, it meant that the Bill would have to be sent back to the provinces. Since Parliament was ending its session soon, it meant that if the Bill was sent back to the provinces for reconsideration it would not be completed in time and the Bill would lapse. The Bill could not be allowed to lapse. He suggested that the Committee continue with the process of finalising the Bill and leave it up to the new Parliament after the elections to bring in an amendment to it if need be. The Bill was a section 76 Bill. The amendments had been sent to the provinces for consideration and they had agreed upon it. He would not entertain a long discussion on the issue and asked members to comment.

Ms Mncube said that the Committee should have been informed of DTI’s concerns before the Bill, inclusive of the amendments, had gone to the provinces.

Ms Keketsi said she had not been present when the Bill was discussed by the Committee. She said that if Mr Strydom had been present he should have raised the concern at that point in time. Unfortunately, the Bill had already been dealt with by the provinces.

Mr Sinclair pointed out that the Committee has come a long way with the Bill. The Committee had dealt with what had been placed before it. The amendment which was of concern to the DTI was not that detrimental. He suggested that the Committee proceed with the Bill and accept the final negotiating mandates and thereby accept the Bill.  The Bill should be accepted as it was and the Committee should move forward.

The Acting Chairperson responded that the Committee had seen the Ministerial letter and the provinces did not seem to have a problem with the Minister having these Ministerial powers. The fact of the matter was that if the Bill was sent back to the provinces there would not be sufficient time to finalise it before the end of the current Parliament’s session.  

Adv van Der Merwe agreed with the sentiments of the Committee. However, from a legal point of view, there was no need for the amendment clause. At the time when the amendment was proposed, Members felt that there was not sufficient governance in the entities out there. If the Committee decided to remove the amendment, the Bill would have to go back to the provinces for final mandates.

Dr Nonceba Mashalaba, DTI Acting Director General: Industrial Development Incentive Administrative Division supported the sentiments of the Committee to accept the Bill as it was. She agreed that the Bill was very important. The regulations on the Bill were yet to come and perhaps the issues raised could be dealt with in the regulations.

The Acting Chairperson said no bill or act was cast in stone. He said that when the fifth Parliament begins its session and the need arises, amendments to the Bill could be forthcoming as early as June 2014.The biggest fear that he had was the delay that would be caused if any amendments were to be entertained as the entire nation was awaiting the Special Economic Zones. Growth and Development was expected to happen. The Bill simply had to be passed.

The Acting Chairperson placed the Bill before the Committee and it was adopted without any amendments.

The meeting was adjourned. 
 

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