Minister on DTI's 2013/14 Annual Report and 1st Quarter 2014/15 performance

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Trade and Industry

12 September 2014
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

With the Minister in attendance, the Department of Trade and Industry (DTI) took the Committee through the economic context of the 2013/14 Annual Report, strategic goals and structure of the Department’s work, its key achievements and financial management. Its 2014/15 1st Quarter report looked at key achievements, progress in meeting its performance indicators, expenditure and challenges.

Members wanted to know about creating a Special Economic Zone in northern Eastern Cape, how the DTI would create industrial development and job creation against the backdrop of the economic reality which some opposition members alleged were self made, implementation of the youth enterprise development strategy and water and electricity supply. There was discussion on the idea of an “economic CODESA”, transport regulations, benefits of NEPAD projects, monitoring of entities, designations and localisation.

When looking at the key highlights of the first quarter, Members asked about the fine-tuning of the incentive scheme for black industrialists, the mining charter and the BBBEE codes, upcoming draft legislation, implementation of legislation assented to, livestock disputes between SA and Namibia and employment targets. In reply to a question on trade with the rest of Africa, the Minister said a Code of Business Conduct for South African businesses operating abroad was becoming extremely urgent because there was a sense that SA was hogging all the trade in Africa.

Meeting report

The Chairperson said the Minister would be present until 10h00 so Member’s would be able to engage the Minister on the Annual Report before he left.

Minister of Trade and Industry, Rob Davies, explained the Annual Report of the Department was always presented to the Committee by the Director General, as accounting officer and administrative head of the Department while the Minister was the political head and executive authority. He had taken the view, as Minister, that the Department had within it a cadre of professionals – skilled and hardworking individuals that wanted to serve the country. The Department had taken the view of continuous improvement, as derived from the Asian business model, and this was visible when looking back on progress made. Some highlights were that the Department was placed at the top of a number of rankings by business organisations, as the best performing national department in government. When looking at the audit report, the Department always had an unqualified audit with findings, but this year, the findings were narrowing and had decreased. Also, the findings were on really technical matters, such as not following proper procedure. The Department’s objective for the next year was an unqualified audit with no findings.

Department of Trade and Industry (DTI) presentation on its Annual Report 2013/14 
Mr Lionel October, DTI DG, explained the global economic context to the Annual Report, which was important to consider because SA was characterised as a small open-economy. In the first quarter (January – March 2014), the global GDP growth slowed from an annualised quarter-on-quarter rate of 3.4% as seen in the fourth quarter of 2013 to 2.1% in Q1 of 2014. This was primarily due to a 2.1% contraction of GDP in the United States and slowing growth in China and the European Union. In the second quarter (April – June 2014), global GDP growth recovered slightly as the US economy rebounded strongly and grew by 4% on an annualised quarter-on-quarter basis. Economic conditions in the EU worsened however with Germany surprisingly contracting. The International Monetary Fund (IMF) expected world output growth to rebound in the second quarter of 2014 and become firmer in 2015 and 2016. The IMF projected that imports by advanced economies would increase from 1.4% per annum in 2013 to 4.6% per annum in 2015. Overall, the economic growth outlook remained weak with significant downside risks.

Turning to the domestic economy, real GDP grew by an annualised quarter-on-quarter rate of 0.6% in the second quarter of 2014. SA’s growth performance was led by the tertiary sector, mainly government services, finance, real estate, business services, transport, storage and communication services. The manufacturing sector contracted by 2.1% in the second quarter of 2014 due to low production in autos, chemical products, rubber and plastics, glass and non-metallic mineral products. The contraction in manufacturing was primarily due to the slow pick up in the mining sector after the prolonged strike in the platinum sector. SA exports and imports to the world declined in the second quarter of 2014 with imports declining particularly significantly leading to an improvement in SA’s trade deficit. SA exports to Africa increased from R70.2 bn to R71.9 bn resulting in a trade surplus of R39.5 bn with the continent. SA trade with the world and BRICS (Brazil Russia India China and SA) were affected by poor growth in the EU and the US while demand for commodities and commodity prices remained relatively flat as China’s policymakers attempted to re-balance the economy. SA trade with Africa consequently remained a priority focus for DTI.

Mr October moved on DTI strategic goals for the period under review which included:
• Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation. This industrialisation would be guided by Broad-Based Black Economic  Empowerment given the country’s historical legacy.
• Build mutually beneficial regional and global relations to advance SA’s trade, industrial policy and economic development objectives.
• Facilitate broad-based economic participation with targeted interventions to achieve more inclusive growth.
• Create a fair regulatory environment that enabled investment, trade and enterprise development in an equitable and socially responsible manner.
• Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensured effective and efficient service delivery.

The Department’s work structure was organised into clusters or work streams: Industrial Development, Trade, Investment And Exports, Broadening Participation, Regulation And Administration And Co-Ordination. Key achievements against planned targets for each of these work streams were discussed:

Industrial Development
to promote industrial development, investment, competitiveness, employment creation.
• The sixth iteration of the annual rolling Industrial Policy Action Plan (IPAP 2013/14-2015/16) was launched in April 2013 and implementation reports produced. IPAP was the core DTI programme and was renewed and updated each year and so was becoming institutionalised.
• The new South African Bureau of Standards (SABS) Local Content Verification Office was officially launched in July 2013 together with a new technical instrument (SATS) 1286 in support of South Africa’s localisation strategy. This instrument measures local content.
• Revised National Industrial Participation Programme (NIPP) guidelines were approved, effectively closing existing loopholes with respect to multiplier calculations.
• Local content verification for all transversal contractors on clothing, textiles, leather and footwear (CTLF) tenders with contract value of R1 million or above in December 2013 to gauge compliance with designation instructions was completed.
• Total investment attracted into the auto sector was R16 billion. Since the designation of buses, 300 buses had been procured with localisation requirements as set out in the Designation Instruction Note. Some of the major contracts included a successful tender with Mercedes-Benz SA to provide 134 buses for phase 1B of Johannesburg’s Rea Vaya Bus Rapid Transport (BRT) system; a successful R180 million tender with Volvo SA to provide 40 new vehicles to the City of Cape Town for its extended MyCiti bus routes; and MAN supplying 80 new commuter buses to Great North Transport, Limpopo’s largest public transit operator.
• The Automotive Supply Chain Competitiveness Initiative (ASCCI), a partnership between government, labour and business was launched in October 2013. Mercedes-Benz SA had escalated its total investment in SA to more than R5 billion, underpinning an increase in its local output to 100 000 units a year and creating 800 new jobs. Production of the new C-Class had already started at the Mercedes’ East London plant, and will slowly ramp up from the current 250 units to full capacity of 420 units a day. General Motors SA (GMSA), in partnership with component manufacturer Tenneco SA, had been awarded a R6 billion contract to export catalytic converters to North America.
• Significant progress had been made in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) with a number of small projects.
• Approximately 3 233 unemployed learners were enrolled for training and 2 417 were placed to increase the pool of agents suitable for middle management in the Monyetla Work Readiness Programme.
• The film Long Walk to Freedom, costing R239 million, premiered and released countrywide in November 2013, earning more than R23 million at the box-office to become the highest-grossing film in the country.
• In agro-processing, DTI, in collaboration with Buhler, launched the innovative Isigayo plant in April 2013.
• The Clothing and Textile Competitiveness Programme (CTCP) had stabilised the CTLF sector and much progress had been made since the launch of the programme - 44 applications were received to the value of R 645 million under the Competitiveness Improvement Programme (CIP), with R77.7 million already disbursed. 777 approvals had been made to date, under the Production Incentive Programme (PIP), to a total value of R2.2 billion. Since inception 63 311 jobs had been saved and 8 459 jobs created.
• Two new regional footwear clusters established under the National Leather and Footwear Cluster Initiative: Fast-Track Cluster (Eddels) in KwaZulu-Natal and the Southern Cape Regional Footwear Cluster (Watsons).
• The Special Economic Zones Bill was passed and commenced in May 2014. It will enable the creation of new industrial hubs and bring previously marginalised regions into the mainstream of the national economy.
• A new Industrial Development Zone (IDZ) was designated at Saldanha Bay in October 2013. Pre-feasibility studies completed for Tubatse (Limpopo) and Upington (Northern Cape), while others were being finalised for Bojanala (North West), Maluti-a-Phofung (Free State), Musina (Limpopo) and Nkomazi (Mpumalanga). Applications for designation had been submitted to the Manufacturing Development Board in respect of Dube Trade Port (KwaZulu-Natal).

Trade, Investment And Exports
• With the Southern African Development Community (SADC) services negotiations, SA’s initial offers on financial and communication services were submitted.
• Agreement had been reached at Cabinet’s International Cooperation, Trade and Security Cluster (ICTS) Director-General level to submit a cabinet memorandum to take steps to encourage compliance by certain  SADC Members of their commitments under the SADC Trade Protocol.
• With the Southern African Customs Union (SACU), cconsensus was reached on the need for high level bilateral engagement in SACU towards effective implementation of a development integration approach in SACU and there was unified engagement by SACU in its trade negotiations with third parties e.g. Economic Partnership Agreement (EPA) and the Tripartite Free Trade Agreement (T-FTA).
• With T-FTA negotiations, the scope and coverage of Phase One of the negotiations was fully defined and successful progress was made in the tariff negotiations with consultations within SACU on tariff offers to the East African Community (EAC) and Egypt at an advanced stage.
• With the African Union /New Partnership for Africa’s Development (NEPAD), Guidelines of Good Business Practice were approved by the ICTS Directors-General Cluster of Cabinet.
• SA would be hosting the Africa-India Trade Ministerial Conference and African Partnerships were influenced to promote support for the development integration agenda in Africa.
• Three Memoranda of Understanding were tabled on Economic Cooperation (Ghana, Benin and Nigeria) in Parliament. On the final draft of the MoU on Automotive Cooperation between SA and Nigeria, draft text exchanged through diplomatic channels had been completed.
• DTI was engaged in 32 business and/or technical missions to promote economic cooperation and participated in 81 government-to-government platforms while there was implementation of the South Africa- Cuba agreement on economic assistance.

Broadening Participation
• The B-BBEE Act was assented to in 2013 and the B-BBEE Codes of Good Practice were approved by the Minister and published for implementation in 2015.
• The National Informal Business Upliftment Strategy (NIBUS) was approved by Cabinet and launched by the Minister in May 2014.
• The Co-operatives Amendment Act was assented to in August 2013 and provided for the Co-operative Development Agency (CDA), with its primary role being to provide support with the development and capacity building of co-operatives as well as the Co-operatives Tribunal to look at resolving disputes.
• The Isivande Women’s Fund (IWF) supported 16 projects.
• The draft National Strategic Framework on Gender and Women Empowerment was revised and the Youth Enterprise Development Strategy (YEDS) approved and launched by Minister in November 2013.

Regulation and Co-Ordination
The Lotteries Amendment Act and the Intellectual Laws Property Amendment Act for the protection of traditional knowledge were assented to by the President. The National Credit Amendment Bill was adopted by Parliament and Draft Policy Frameworks on Intellectual Property and Gambling was developed. The Policy Framework and Bill for Licensing of Businesses Bill were developed and public consultations conducted while an Impact Assessment Study on the Liquor Act, 2003, and draft Policy were developed and the results were incorporated in the draft liquor policy.

DTI vacancy rate was at 9.4% with an employee retention rate of 93.2% (the cumulative turnover stood at 6.8% in respect of permanent employees). The Department recorded 44% of women employed in Senior Management Service (SMS) positions and 2.7% people with a disability. Payment of all eligible creditors were made well within 30 days. The Department received an award in 2013 as the “Top performing government department” at the eleventh Annual National Business Awards organised by the private sector. DTI also received an acknowledgment as the second best functioning national department in 2012, according to the Management Performance Assessment Tool (MPAT) conducted by the Presidency’s Department of Monitoring and Evaluation (DPME) last year.

Looking at the summary of these targets, 63 out of 75 (or 84%) goals were achieved i.e. 12 (or 16%) goals were not achieved.

The Chairperson found it refreshing to hear good news. She welcomed Deputy Minister, Mr Mzwandile Masina, who had submitted an apology for being late and visiting Members, Mr B Radebe (ANC) and Mr N Koornhof (ANC).

Ms P Mantashe (ANC) appreciated the progress made. She wanted to know how many jobs renewable energy would create, particularly in the Eastern Cape. She had previously made a proposal for an agricultural SEZ in the northern area of the Eastern Cape where there were many farmers with a lot of stock. This area was hard hit as people were returning from Marikana but there were no jobs. She proposed the spending patterns of DTI address this. She appreciated the effort to create jobs in line with what the governing party had said.

Minister Davies said there were projects scheduled for the Eastern Cape and Free State, after having been on the cards for a long time, for bio-fuels and opportunities to export bio-ethanol into the EU. Progress had been made on all the regulatory frameworks for this project to move forward. DTI had been talking to the provinces and doing feasibility studies on potential SEZs and there was a potential for one on the Wild Coast, in the former Transkei area, and it did include cattle farming. There was an inter-ministerial committee dealing with Marikana communities and DTI contributed with the SEZ around the platinum sector. There was consultation in Harrismith and a decision now needed to be taken about an SEZ there.

Mr D Macpherson (DA) agreed with the Minister’s introductory remarks that DTI was one of the top performing in government but the problem was that this was not translating into economic growth and job creation. A nice report with numbers and figures meant nothing in the economic climate the country found itself in. Turning to the Annual Report, he said it was untrue that certain industries involved in the competitiveness programme were doing well - the textile industry had lost growth and manufacturing was down nearly 8%. This was problematic and spoke to policy confusion, investor confidence, the inability to deal with labour strikes and the unwillingness to accept that most problems in the SA economy were self-made. He believed the global economic recession had very little impact as economies similar to SA and African competitors were roaring ahead. He congratulated the DG and his team on some good audit findings in the Annual Report but this could not be celebrated against the backdrop of the economic reality. How would the celebrations of the Annual Report be translated to serious industrial action and job creation?

Minister Davies said it was true the requisite growth in manufacturing was not being seen but he respectfully disagreed that the progress achieved meant nothing against the economic background. On the contrary, it demonstrated what DTI needed to do to move forward under challenging circumstances. It was clear in the budget vote debates in the NCOP, that the DA rejected IPAP as being too interventionist. This was one position but it was not supported by the evidence. The evidence showed where IPAP was implemented, a difference was made in even the most vulnerable sub-sectors like clothing and textiles. DTI’s lesson was to up its game to be a bit more precise on some of the things done. A developmental trade policy was adopted to support industries and this had made a difference. A decision was taken for government procurement to buy from local sources against advice and this had made a difference. Incentives were supporting competitiveness rising and this had made a difference. He did not believe that policy coherence, economic CODESA or whatever else, were the real issues – the issue was that SA had been a mining economy dependent on primary products and a crisis was now being faced strongly reflected in the mining sector. This was fundamentally because the mineral super-cycle passed its peak and there was not adequate benefit sharing in the mining industry and there were serious problems of indebtedness particularly of the lower-income group. It could not be hoped that SA would be restored based on the wealth of mineral rents and SA was not different from the rest of Africa in this regard. He was happy Nigeria was doing a lot better than it used to do; but Nigeria was not a society without challenges and neither was SA and it was not about pitting one utopia against another. The glass everywhere was half-full and whichever side could be emphasised and SA commentators were shooting themselves in the foot by tarnishing the reputation of the country. When the Minister was in the USA and had spoken to businesses, the same view was not held – they knew SA had strikes and that strikes in the mining sector were extraordinary and different to strikes in the manufacturing sector. Nigeria had a population three times that of SA so it ought to have a bigger economy. The only reason the country now had the biggest economy in Africa was because it recalculated its GDP.

Deputy Minister Masina added that the Annual Report showed global economic conditions could not be ignored in analysis. The Annual Report was based on the previous financial year but after the election, it was noted radical economic transformation would take place. To move forward, DTI needed to be stable and tightly run to introduce measures in terms of government processes and things would not be done just to please the opposition. He was encouraged by the trend of narrowing audit findings in the AG’s report. The emphasis was that DTI was sound and complying with the relevant legislation.

Mr B Mkongi (ANC) echoed the sentiments of Ms Mantashe in that the Annual Report was a good story to tell and this should be appreciated. Looking at the challenges, the issues raised had been discussed in the Committee’s colloquiums over the past three weeks. It was a good story to tell that DTI’s work on the ground reflected what stakeholders, in the colloquiums, were saying. How far was the implementation of the youth enterprise development strategy to date?

Deputy Minister Masina replied that the youth enterprise development strategy had been finalised and launched and now had to be implemented. This would take place in the coming year.

Mr A Alberts (FF+) asked if DTI had any plans in place to address water and electricity supply, together with the Ministers of Energy and Public Enterprises on an inter-ministerial level, because these matters were holding the economy back as a whole. The Minister of Transport had indicated that she would be creating some sort of super transport regulator – was DTI addressing the Minister on issues of what seemed like arbitrarily higher freight and rail tariffs? Should DTI not be looking at some sort of larger consultation process like an Economic CODESA (Convention for a Democratic South Africa) of sorts where all role-players were included to see where constraints were for each stakeholder and to find solutions not currently on the table? He was concerned some constraints were self-made and if one was too close to the coalface, an objective perspective was lost. If DTI was entrenched in its own policy ideas, it was hard to stand back and see self-made impediments. Such a consultative process would be useful to engage local and international stakeholders.

Minister Davies agreed that all stakeholders, and not just business, needed to be engaged, with including labour and communities. There was already an institution for social dialogue and this was NEDLAC. This was a statutory body which should be used and built on for social dialogue. DTI met often with business to talk over issues and to try and get partnerships going. DTI needed to up its game to get more of a consensus going on key issues like localisation, competitiveness rising by manufacturing and beneficiation to make a positive difference. Serious engagement needed to be a continual progress and not just when a crisis was hit. With water, electricity and port charges, these remained challenges, this was not being denied and was contained in the Annual Report. DTI continued to bear in mind the impact of electricity on manufacturing. DTI did interact with the Ports Regulator on charges and it was hoped more progress could be made on this through Operation Phakisa.

Mr B Radebe (ANC) felt apples needed to be compared with apples – it could not be said other African countries were moving faster than SA as one had to take into account the base from which they were moving. SA remained one of the most viable economies on the African continent and this was reflected in the Ernst and Young study which found that SA was one of the countries that attracted the most Foreign Direct Investment (FDI) – this was a fact that could not be changed as found by an independent institution and it needed to be accepted. What did DTI do to ensure business people also benefited from NEPAD projects? He asked what the emergence of extremist groups had on trade agreements with certain parts of Africa. If there was instability, what measures did DTI put in place to mitigate this?

The Minister said a Code of Business Conduct for South African businesses operating abroad was becoming extremely urgent because there was a sense that SA was hogging all the trade in Africa. In this way, the country could damage itself badly if business was not conducted in an ethical manner. He had repeatedly said to business that they carried Brand SA and this brand needed to be defended or everyone would suffer.

The Chairperson noted the implementation of the youth enterprise development strategy was not clearly addressed in the briefing. She found the incentives were well explained but there seemed to be some challenges around the estimation of targets. It might also be useful to know what DTI itself was doing in monitoring the entities. With designations and localisation, she had been aware of tariff splitting where if a certain percentage of an item was plastic, classifying the product as “local” did not include the plastic. What was DTI’s position on this and was it a correct reflection?

Minister Davies said the youth programme would migrate to the Department of Small Business Development. DTI, through the Youth Accord, was to designate 80% of jobs in the business process services sector would go to young people and all new investments had complied with this. The plastic designations were fairly technical in nature. Such challenges and issues should be brought to DTI’s attention, as he was not satisfied with the level of compliance of designations. There was a fair amount of slippage and loopholes but he had no doubt that localisation had made a difference. On his recent visit to the House of Monatic, he had seen them making uniforms for South African Airways (SAA) with the fabric coming from Worcester.

First Quarter Report: 01 April – 30 June 2014
Mr October noted some key highlights included two previous instruction notes for designation of Rail Rolling Stock and Solar Water Heaters were amended and re-published by National Treasury in June 2014. Local content verification of solar water heaters was finalised by SABS. DTI intervened in Eskom’s Breach of Power Pylons Designation as reported by industry and data was collected of the local manufacturing capacity for designation.

With the overview of the incentive scheme, 15 Automotive Investment Schemes (AIS) were supported, 127 Manufacturing Competitiveness Enhancement Programme (MCEP) interventions were supported, 24 film and television projects as well as support for Export, Marketing and Investment Assistance (EMIA) projects.

The Promotion and Protection of Investment Bill was amended incorporating comments from the public consultation process. The Bill was currently with NEDLAC who had asked for an extended period for engagement with business and labour. The Bill would then return to Parliament for further deliberation. DTI achieved a R14.2 billion investment pipeline in large renewable and manufacturing projects, a total of 31 government-to-government platforms were held with 17 negotiations on T-FTA and EPA while there was continued work on the Global Exporter Passport Programme (GEPP). The terms of reference document for the Black Industrialist Incentive scheme had been developed and adopted with a specialised desk to fast track black industrialists. Drafting of Phase II Amendment of the B-BBEE Codes was finalised. Five pre-feasibility studies for proposed Special Economic Zones (SEZs) had been finalised (Rustenburg Platinum hub in North West, Musina Logistic hub and Tubatse Platinum hub both in Limpopo, Upington Solar corridor in Northern Cape and Harrismith Agro-processing hub in Free State) and the proposed Harrismith Industrial Development Zone (IDZ) was circulated for public comment. This matter was currently with the Minister and there was already keen interest in investment opportunities in these SEZs.

Mr October continued with the highlights saying the draft Licensing of Businesses Bill was revised and workshops were held in all provinces as part of consultation. There was a slight improvement in the vacancy rate at 8.1% against a target of 8%. All eligible creditors’ payments were made within 30 days. DTI had employed 45% of women in Senior Management Service (SMS) positions and 2.7% of its staff were people with disabilities.

The Chairperson thought it would be useful to learn from DTI if some sort of pattern was discerned in the expenditure against the variance in the first quarter.

Mr Mkongi thanked DTI for the encouraging presentation. He appreciated the highlights and milestones outlined in the presentation which enabled South Africans to know at what DTI was succeeding. The creation of black industrialists was close to his heart and he asked if the black industrialists incentive scheme was integrated in the medium term expenditure framework (MTEF) and budgeted in the financial year as a sure thing. People on the ground were waiting patiently for this programme. Were the challenges of the Mining Charters integrated into Phase II of the BBBEE codes?

Mr October explained the bulk of the money was paid out as incentives to the private sector and co-invested with the private sector. The application had to come from the company and they did not necessarily follow the financial cycles of the DTI. The bulk (95% +) of DTI’s manufacturing went to established companies thus reflecting the economic landscape in SA. Sometimes incentives needed to be restructured to better suit the sector of black industrialists. He thought it important not to draw distinctions between industrialists and entrepreneurs. The important point was to direct entrepreneurship and link it to localisation. With the Luminance Company, DTI had no problem with businesses selling luxury goods but government money could not be used for importing the goods. DTI supported black businesses venturing into all sectors of the economy but where government money was used, there needed to be local benefit sharing. He noted the issue of ownership with the alignment of the Mining Charter and BBBEE codes. The Charter did not have a proper provision for local procurement.

Mr Macpherson asked when the Promotion and Protection of Investment Bill would be coming before the Committee along with the Licensing of Businesses Draft Bill. Did the five pre-feasibility studies on the SEZs include consultation with existing manufactures and local businesses? He congratulated the DG and Department on payment of creditors within 30 days, as this was one of the biggest things which hurt small businesses which supplied government. He thought black industrialists were important but it was very a small number when compared to entrepreneurs and that should be the focus in the upcoming quarter.

Mr Alberts wanted to know how the process of creating black industrialists dovetailed with existing BBBEE.

Ms Zodwa Ntuli, DDG: Consumer and Corporate Regulation, DTI, said the draft Bill would be coming to the Committee and was on Parliament’s legislative programme. Most of the comments on the draft Bill were overrated.

Mr Radebe wanted an indication as to which sectors were targeted under EMIA. He thought the process of the creation of black industrialists needed to be pushed and fast tracked, as it was a sector ignored for quite a long time. In Africa there were NEPAD projects which SA played a key role in - what opportunities did DTI create for South African black industrialists to take a slice from these projects? He asked when the Intellectual Property Rights Amendment Act would be implemented.

Mr October responded that this was correct. Transport, machinery and mining equipment was the country’s fastest growing export.

Ms Ntuli said the implementation of the legislation had a number of elements needed including, mainly, regulations to give effect to the provisions amended. The regulations would be published for public comment at the end of September and it was expected the legislation would come into effect with the start of the new financial year. Direct stakeholders had been engaged, regulations drafted and there was work toward getting the legislation ready for implementation. The advisory council also needed to be established – the advertisement for this council had gone out. The national trust and the trust fund needed to be established and this was in preparation.

Mr N Koornhof (ANC) noted the dispute between SA and Namibia about livestock imports from Namibia and while the benefits of localisation were clear, he asked how this was balanced against the stability of neighbouring countries. Was this matter resolved or was it still a problem?

Mr October replied that there were intensive meetings with DAFF and the industry in Namibia to try to solve this problem. The Minister said in no uncertain terms that protectionism would not be tolerated, there was a trade surplus and imports should not be blocked. The issue needed to be followed up.

The Chairperson asked if SA had had the opportunity to build the ship on which the series “Black Sails” was filmed. On the summary of expenditure vs. projections, she questioned the variance on the administration work stream as the Minister had indicated there was a decrease in the vacancy rate. What was the actual target for the employment of disabled people?

Mr October said it was not just the acting that was important with the film industry but production as well and these capabilities were being built.

Ms Chohan responded that the Public Service target for people with disabilities was 2% but DTI had exceeded this and was on 2.7%

[At the start of the meeting, Mr Macpherson stated he was concerned about the choice of venue as DTI’s Annual Report was highly relevant to the SA public yet the venue had no cameras for the meeting to be broadcast on the parliamentary television channel. He asked that the Committee, in future, not meet in the venue as public oversight and accountability was vital and this could not be achieved because of the venue.

The Chairperson shared the Member’s view but noted there were simply not enough venues with camera facilities and this was the reality. The Committee could not always have those venues as other Committees also wanted to use them.]

The meeting was adjourned.

Apologies: Mr Z Luyenge (ANC), Mr C Mathale (ANC), Ms M Tsopo and Mr G Hill-Lewis (DA).

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