Committee Legacy Report; Oversight Reports: adoption

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Trade and Industry

11 March 2014
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Meeting Summary

At its final meeting, the Committee considered the Interim Report on the Budget and the draft Legacy Report for approval and adoption.

In its 2013 Budgetary Review and Recommendations Report (BRRR), the Committee had recommended that the House request the Minister of Trade and Industry to consider budgetary allocations for the following bodies in order to ensure that they were able to fulfil their mandates: the Broad-Based Black Economic Empowerment Commission; Co-operative Development Agency; Co-operative Tribunal; National Trust Fund on Indigenous Knowledge; and National Council on Indigenous Language.  It had also indicated that there was a need for the recapitalisation of the Export Credit and Insurance Corporation and the National Empowerment Fund, in order for these institutions to fulfil their mandates of facilitating the export of trade and cross-border investment between South Africa and the rest of the world.  There was a need to broaden black participation in the economy.  It was important to increase the allocation to the Consumer and Corporate Regulation Programme to ensure adequate support to its regulator’s entities, in particular the National Consumer Commission (NCC) and the National Credit Regulator (NCR).

The Department had made significant strides in achieving its strategic objectives.  The National Regulator for Compulsory Specifications (NRCS) had been able to confiscate and destroy large numbers of non-compliance products falling within the electro-technical sector in Durban and Cape Town ports.  The Department had also ensured that the Saldanha Bay Industrial Development Zone (IDZ) was approved for designation and launched in Saldanha Bay in October 2013. The Department had also signed Memoranda of Understanding (MOU’s) with investors who were interested in leases at the Coega and Richards Bay IDZ’s.  The Manufacturing Competitive Enhancement Programme (MCEP) had assisted 276 enterprises and was projected to assist in the retention of 91 735 jobs.

In terms of the Critical Infrastructure Programme, a target of 12 evaluated and approved projects had been set.  As of 31 December 2013, only four projects had been approved and 74% of the budget had been transferred to other incentives, despite only a third of the target having been achieved. The Department had identified that the lack of projects could be attributed to the existing co-funding model with municipalities, as it was evident that many municipalities were unable to meet the requirements. The Department had therefore stated that there was a need to review this model to possibly adjust the required ratio for co-funding. 

The report was adopted, subject to amendments.

In the Legacy Report, Members indicated that the issue of the emerging grooms should be highlighted, as well as the need for regulation of both the horse racing and gambling industries. It was felt that there was a need for a general review of new legislation, to ensure that there was public awareness of existing and newly-implemented legislation.  Members were not entirely happy with the USA’s attitude towards South Africa’s trade relations with Cuba. The Legacy Report was adopted, subject to amendments.
 

Meeting report

Opening remarks by Chairperson
The Chairperson greeted and welcomed everyone to the meeting.  This was the last meeting of the Portfolio Committee, so she asked Members to be as efficient as possible, as this would enable everyone to leave early in order to do other constructive work.  
Adoption of Committee minutes
The Chairperson tabled the minutes of 11 March 2014 and requested the Committee to adopt them.  Mr B Radebe (ANC) moved their adoption, and Mr N Gcwabaza (ANC) seconded. The minutes were adopted.

The Chairperson requested Members to proceed to the Interim Report on the Budget.

Interim report of the Portfolio Committee on Trade and Industry on Budget
The Chairperson indicated that the Interim Report of the Portfolio Committee on the Budget was not the final report on the Committee’s work for the third quarter, but rather an interim report, just to keep the record. It was also clear that in its 2013 Budget Review and Recommendations Report (BRRR), the Committee had recommended that the House request the Minister of Trade and Industry, Mr Rob Davies, to consider budgetary allocations for the following bodies in order to ensure that they were able to fulfil their mandates:

Broad-Based Black Economic Empowerment Commission
Co-operative Development Agency
Co-operative Tribunal
National Trust Fund on Indigenous Knowledge
National Council on Indigenous Language.

The Committee had also indicated that there was a need for the recapitalisation of the Export Credit and Insurance Corporation and the National Empowerment Fund, in order for these institutions to fulfil their mandates of facilitating the export of trade and cross-border investment between South Africa and the rest of the world. The Chairperson added that there was a need to broaden black participation in the economy.  It was important to increase the allocation to the Consumer and Corporate Regulation Programme to ensure adequate support to its regulator’s entities, in particular the National Consumer Commission (NCC) and the National Credit Regulator (NCR).

The Chairperson indicated that in the 2013/14 financial year, the Department had made significant strides in achieving its strategic objectives.  According to the Department, the highlights of the Department’s work in the third quarter ending in December 2013 included the fact that the National Regulator for Compulsory Specifications (NRCS) was able to confiscate and destroy large numbers of non-compliance products falling within the electro-technical sector in Durban and Cape Town ports.  The Department had also ensured that the Saldanha Bay Industrial Development Zone (IDZ) was approved for designation and launched in Saldanha Bay in October 2013.The Department had also signed Memoranda of Understanding (MOU’s) with investors who were interested in leases at the Coega and Richards Bay IDZ’s. In line with consumer protection, the Minister had issued a final notice on categories of goods required to have trade descriptions applied to them in terms of the Consumer Protection Act (No. 68 of 2008).The Manufacturing Competitive Enhancement Programme (MCEP) had assisted 276 enterprises and was projected to assist in the retention of 91 735 jobs.

The Department had managed to identify some areas that required improvements, and these included the reality that SEDA Technology Programme (STP) had only one of the four new targeted incubators that had been approved, and one awaited approval. There were no further funds available for more new incubators. The business case for the establishment of the Co-operatives Development Agency had been approved and implementation had been initiated through the development of a draft staff migration plan from the Small Enterprise Development Agency, and a draft organisational structure. The Department had completed the business case for the establishment of a Co-operatives Tribunal, and a draft structure was already in place.  In terms of the Critical Infrastructure Programme, a target of 12 evaluated and approved projects had been set.  As of 31 December 2013, only four projects had been approved and 74% of the budget had been transferred to other incentives, despite only a third of the target having been achieved. The Department had identified that the lack of projects could be attributed to the existing co-funding model with municipalities, as it was evident that many municipalities were unable to meet the requirements. The Department had therefore stated that there was a need to review this model to possibly adjust the required ratio for co-funding. 

The Chairperson said she was pleased that the Department’s expenditure had been increased by 3.4% from the 2013/14 financial year to the 2014/15 financial year.  In the 2014/15 financial year, expenditure was expected to be R9.8 billion, although this was in effect a real decrease, once the effects of inflation were considered.  The financial allocation needed to be done more effectively, as the budget allocation was not sufficient, given the amount of work that needed to be achieved.

Dr W James (DA) indicated that in the statement on page 8, the first sentence in paragraph 3, there was a need to insert “vigorous” between “continuous”, so as to make the sentence stronger.

Members agreed with that suggestion.

Dr James suggested that “however” should be deleted on page 8, the last sentence in paragraph 3. He also added that “should” in the same sentence needed to be changed to “must”.

Mr D Swanepoel (ANC) agreed with Dr James, as “must” sounded more unambiguous, while “should” sounded more like a wish, not an obligation.

Members agreed.

The Chairperson indicated that “the” needed to be inserted before “industry” on page 8, the second sentence on paragraph 3.

Dr James indicated that “exasperated” on page 8 needed to be deleted and replaced by “exacerbated”.

Members agreed.

The Chairperson suggested that “fully” needed to be inserted before “functional” on page 9, the first sentence on paragraph 1.

Members agreed.

The Chairperson indicated that in the conclusion, there was a need to add that the Committee appreciated the cooperation of the DTI, as this had enabled the Department to do an effective budget oversight of the Chief Financial Officer (CFO).

The Interim Report of the Portfolio Committee on Trade and Industry on Budget was adopted with amendments.

Draft Legacy Report on activities undertaken during the 4th Parliament (May 2009-March 2013)
Dr James said that “deliberate attempt” on page 1, first sentence on paragraph 1 should be replaced by “organised effort” and “within” should be replaced by “of”.

Members agreed.

Mr B Radebe (ANC) suggested that the issue of the emerging grooms needed to be highlighted in the Legacy Report.

Members agreed.

The Chairperson indicated that there was a need to regulate both the horse racing and the gambling industry, and that these issues needed to be addressed in a cooperative manner.

Mr N Gcwabaza (ANC) stated that there was a need to add “promotion, protection of investment” on page 3, paragraph 2, and bullet point 2, in order for the sentence to be much broader.

Members agreed.

The Chairperson said the Committee had agreed that the Department needed to dissolve other boards, as one board was enough. She was concerned that this decision had not yet been implemented.

She said that on page 26, under “recommendations,” the DTI needed to travel a bit more to explore other countries for trade-related matters.

The Chairperson said that under “suggestions” on page 27, paragraph 2, there was a need for a general review of new legislation to ensure that there was awareness of existing and newly-implemented legislation.  The DTI was failing to translate all the legislation into all official languages in order to create public awareness.

The Chairperson added that the word “spirit” on page 28, first paragraph, sounded very soft.

Mr G McIntosh (COPE) suggested that there was a need for follow up on the impact of the labour movement and trade onions on the foundry industry.  Labour strikes had had a negative impact on the foundry industry.

The Chairperson agreed that indeed there was a need to explore further the impact of labour unrest in the foundry industry.

Mr Radebe said it was confusing that when it came to agricultural goods, USA companies were participating in Cuba, but when it came to South Africa participating in Cuba, the USA seemed to have a problem with that.

The Chairperson agreed that the issue of Cuba and USA in relation to South Africa needed to be considered at length during the Fifth Parliament. 

Dr James indicated the next Committee needed to review the impact of the shipping trade regime, from bilateral to a new trade regime, and review procedures.

The Report was adopted with amendments.

Closing remarks
The Chairperson noted that this was the last meeting of the Committee, and thanked Members and the staff for their support in ensuring that the Committee had produced a quality Interim Report of the Portfolio Committee on Trade and Industry on the Budget, and the Legacy Report.

The meeting was adjourned.
 

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