Reports on oversight visits to Gauteng, Western Cape and Eastern Cape

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Trade and Industry

03 March 2015
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Committee considered its Draft Reports on oversight visits that it had undertaken to the Gauteng, Eastern Cape and Western Cape Provinces. It was made abundantly clear that the Draft Reports once considered by members would not be adopted in the present meeting but would be adopted the following Tuesday 10 March 2015. Issues were highlighted pertaining to institutions and entities that the Committee had undertaken oversight visits to. For example the South African National Accreditation System (SANAS) had informed the Committee that it needed larger office space. The Committee noted that larger office space meant increased costs and needed to be kept abreast of developments. The Committee also discussed issues that had arisen at the Companies and Intellectual Property Commission (CIPC). Members were concerned about the turnaround times of the CIPC on company registrations. There were also call centre issues and problems with the “Swedish Model“call answering approach that the CIPC had adopted. Prevention of corruption was big on the CIPC’s list of priorities. Its predecessor the Companies and Intellectual Property Commission (CIPRO) had been plagued by corruption. The Committee welcomed the National Credit Regulator (NCR) Regulations as now ordinary people could be protected. The Committee was concerned about the shortfalls arising from the sales of repossessed motor vehicles and houses and felt that credit providers should sell consumers’ vehicles and houses at the best reasonable price obtainable to reduce shortfalls that the consumer was liable for. It was felt that banks should share the risk. Why did the consumer have to bear all the risk? The Committee had to place greater risk on banks that continued to lend. It was only the banks that scored left right and centre. The Committee needed to get banks to bear some of the risk. Members agreed to seriously think about the issue. Another concern was loans being taken out against the pension funds and the retirement savings of consumers.  Credit providers encouraged borrowing against pension funds and retirement savings. The Committee briefly debated whether the Committee should perhaps make a statement about the practice being legal but not advisable. 

The NCR was in a better position to deal with the matter and could come up with an alternative. In the end it was decided that perhaps the Standing Committee on Finance could look into the matter and that at the end of the Draft Report it could be mentioned as one of the Committee’s concerns.

Members made changes and corrections to the Draft Reports as was needed and tasked the Committee Staff to incorporate the changes made. The DA had submitted written recommendations to the Committee and these along with other Committee Recommendations would be consolidated into the Draft Reports.

The Committee also adopted outstanding minutes. 

Meeting report

The Chairperson said that amendments were made to the Committee Draft Oversight Reports and that the Draft Reports would be adopted the following Tuesday the 10 March 2015.
As Chairperson of the Committee she had received an invitation from the Minister of Labour’s Office relating to the work of the Department of Trade and Industry (DTI) on beneficiation. The invite was for the 13 March 2015. It coincided with a meeting that the Committee had with the Gambling Board, which she did not wish to miss. She hoped that Mr B Mkongi (ANC) would honour the invite on her behalf so that she could be present when the Gambling Board came to the Committee.

Mr Mkongi agreed and the Committee adopted the decision taken by the Chairperson.

The Chairperson and members expressed their outrage over the air-conditioning not working in the venue given that it was one of the hottest days ever experienced in Cape Town. She would lodge a formal complaint on behalf of the Committee.

The Committee considered the Draft Reports, which were compiled by Committee Staff, which included Mr Andre Hermans Committee Secretary, Ms Margot Sheldon Committee Content Adviser and Ms Z Madalane Committee Researcher.

Draft Report of the Portfolio Committee on Trade and International Relations on its oversight visit to the Gauteng Province 27 – 30 January 2015
The Chairperson reiterated that the Committee would be making changes to the Draft Report but would not be adopting it. She proceeded to take the Committee through the Draft Report page by page and paragraph by paragraph. She touched on issues pertaining to technical infrastructure institutions that had been visited.

South African National Accreditation System (SANAS)
The SANAS had informed the Committee that it needed bigger office space. It was important for the Committee to know what was needed and how much it would cost. Members were concerned that the accreditation turnaround times of SANAS were too long. The Committee needed more information on the African Accreditation Cooperation (AFRAC).

The Chairperson asked what SANAS’ footprint in rural areas was. The Committee needed to keep a watchful eye on the skills levels of nuclear facility inspectors.

National Regulator for Compulsory Specifications (NRCIS)
On the certification of motor vehicles entering SA, members were concerned that the Datsun Go had a zero safety rating in India.

Mr D Macpherson (DA) noted that SA specific safety requirements had to be developed.

The Chairperson stated that Mr Mkongi had raised an important point about the regulation of portable alternating current (ac) generators. The issue needed to be prioritised.

South African Bureau of Standards (SABS)
The Chairperson said that the SABS played a vital role as certain standards had to be maintained when SA exported goods.

Mr Macpherson pointed out that the SABS had an innovation lab, which the Draft Report did not mention. He regarded the innovation lab of great importance.

Mr N Koornhof (ANC) said that what Mr Macpherson was referring to was SABS’ Design Institute. He noted that the Institute had been involved in the recently held Design Indaba hosted in Cape Town. He was very impressed by the number of youth inventors that the Institute had taken on board.

National Metrology Institute of SA (NMISA)
The Chairperson said that the NMISA was in need of an equipment upgrade. Technological equipment was considered outdated within five years. At hospitals medical technological equipment had not been upgraded for seven years. Yes there was a cost involved but there were also lives at stake. The Minister needed to be engaged on the issue. Parts for outdated equipment were expensive. The Committee needed to look into the matter before it made recommendations in its Budgetary Review Recommendations Report (BRRR). Human capital challenges that the NMISA faced was a shortage of metrologists. The Committee was informed that an intervention at tertiary level was required. Students needed to be incentivised with bursaries to take up studies in the field.

The Committee next dealt with issues pertaining to regulatory entities that it had visited.

Companies and Intellectual Property Commission (CIPC)
The Chairperson said that the Committee needed to consider whether burial societies needed to become registered. She pointed out that the CIPC was newly formed in terms of legislation and had new staff. The old Companies and Intellectual Property Commission (CIPRO) no longer existed and much of its staff had been implicated in corruption.
 
The issue at CIPC was that staff had to answer calls coming in at their desks as there was no call centre. Eventually a call centre was started with temporary staff with fixed term contracts. These contracts eventually came to an end. The temporary staffed call centre had not been effective. The CIPC decided to adopt the “Swedish Model” where the call would go directly to the person dealing with the issue. The staff was unhappy that they had to answer calls.

Ms Sheldon stated that the staff would have preferred if a call centre handled calls.

The Chairperson stated that call centre people needed to understand the subject matter of CIPC’s work. The CIPC had stated that its call centre would be operational by end of March 2015. The Committee needed to find out if the deadline was still the same.

Mr A Williams (ANC) sugested the Committee should also request a progress report on when the call centre would be operational.

The Chairperson noted that the Committee was concerned about the turnaround times of the CIPC on company registrations. Whilst members had visited multipurpose centres Eskom load shedding had taken place. The Committee had thus first hand seen how power outages impacted upon the economy. There was also a lack of clear communication from the CIPC on service delivery standards and on updates being implemented on its website. The Chairperson asked Mr Hermans to find out when the website was to be updated. The Committee also considered the role of intermediaries in applications to CIPC.

Mr Koornhof said an intermediary could be a lawyer or audit firm that registered your company on your behalf. Even if application was done manually it was captured electronically immediately.
 
The Chairperson asked what the problem with intermediaries communicating with CIPC electronically was.

Mr Williams replied that if intermediaries worked electronically and there were problems then the system at CIPC needed to be fixed.

The Chairperson stated runner was one type of intermediary that was used. They were so to say go betweens who were well connected within the organisation to fast track applications. They seemed to operate in a loose manner. The Deputy Minister had himself done a sting operation. A runner who had a contact inside the CIPC had approached him. Runners were one of the reasons why the CIPRO had failed. Runners needed to be stopped in their tracks.

National Consumer Commission (NCC)
The Committee had made the distinction between the NCC and the NCR (National Credit Regulator). The NCC dealt with financial arrangements and credit aspects. The NCR on the other hand dealt with the product itself, perhaps if it was defective. The Committee noted the role of Alternative Dispute Resolution (ADR) in complaints handling.
The Chairperson felt that the Committee should insist that the ADR be more accessible to people. 

Mr Williams suggested, to improve accessibility, that staff be moved to Thusong Centres, especially in rural areas.

The Chairperson stated that it was also up to the Committee to improve accessibility. The use of radio stations was always effective and advertising at taxi ranks could also work. Parliament’s media unit could be used to approach community radio stations to spread the word. Perhaps members could come up with ten points or the NCC could be asked to prepare a media package that could go to community radio stations. She noted that the Committee had been pleasantly surprised by the performance of the NCC. There had been great improvements in good governance and security had at the NCC been beefed up.
 
National Credit Regulator (NCR) -
The Chairperson said that NCR Regulations were ready and now people on the street could enjoy being protected. She asked about the investigations into small lenders and U-Bank. The Committee was concerned about the shortfalls arising from the sales of repossessed motor vehicles and houses. Members felt that credit providers should sell consumers’ vehicles and houses at the best reasonable price obtainable to reduce shortfalls that the consumer was liable for.

Mr Macpherson pointed out that banks carried no risk. He said that there should be shared risk.

Mr Williams suggested that the Committee set a percentage of risk that banks should bear. The Committee had to place greater risk on banks that continue to lend.

The Chairperson said that when people lost their jobs they often lost their homes. It was only the bank that scored left right and centre. The Committee needed to get banks to bear some of the risk. She asked members to seriously think about the issue. She also asked what the status of progress was on providing legal assistance to indebted consumers.

The Committee wished to highlight the issue of loans being taken against the pension funds and retirement savings of consumers.

The Chairperson asked Committee Staff to look into what the 2015 Budget Speech had said about the issue. She pointed out that credit providers encouraged borrowing against pension funds and retirement savings. The Committee should perhaps make a statement that the practice was legal but not advisable.
 
Mr Williams cautioned against the Committee making statements about what was advisable. The NCR was in a better position to deal with the matter and could come up with an alternative.

Mr M Kalako (ANC) said that the Committee needed to speak to pension fund administrators. In some instances the administrators colluded with banks. The Committee should look into the matter further.

Mr Williams felt if the Committee advised against the practise, then it should be made illegal.

Mr Macpherson suggested that it was best that the Committee remain within the ambit of its work.

The Chairperson stated that perhaps the Standing Committee on Finance could look into the matter.
It could be mentioned at the end of the Draft Report as one of the Committee’s concerns.

National Lotteries Board (NLB)
The Chairperson pointed out that there were four categories of active distribution agents for the NLB. There was sports and recreation, arts culture and heritage, charities and miscellaneous. There was a fifth category called Reconstruction and Development Plan (RDP) but that was not active.

Mr Macpherson was under the impression that there were only three categories of distribution agents.

The Chairperson explained that the NLB was now empowered by legislation to go seek out organisations that it could fund. This fell within the miscellaneous category.

Mr Williams asked whether the NLB checked on whether organisations spent funds on what they said they would.

The Chairperson said by its very nature sports and recreation received huge sums of money. Arts and culture received very little. All departments had to make do with budget cuts. The Department of Arts and Culture had the largest budget cut and had asked the Committee for assistance. Many charities on obtaining funds from the NLB tend to relax and stop actively sourcing funding. When the NLB funding came to an end then they had no alternative sources of funding. The NLB had informed the Committee that it was trying to encourage its beneficiaries to become self-supporting.
 
Committee Minutes
Committee Minutes dated 7, 11 and 18 November 2014 and Committee Minutes dated 10 February 2015 were adopted as amended. Committee Minutes dated 24 February 2015 was adopted without amendment.

The Chairperson left the meeting at this stage.

National Lotteries Board (NLB) continued – Mr Kalako took over the chairing of the meeting. Given that Members had received the Draft Report beforehand he asked Members to comment, make additions or corrections as he proceeded through the Draft Report page by page.

Mr Macpherson stated that he had forwarded to Mr Hermans the Committee Secretary written recommendations by the DA to be considered for inclusion in the Draft Report.

Mr Hermans explained that the Committee would consider the DA recommendations and agree, disagree or amend them.

Mr Macpherson asked that the Committee note the recommendations that he had made.
There were no further comments made by members on the NLB.

National Empowerment Fund (NEF)
Members did not comment on the NEF. The Acting Chairperson said that changes would be made to the Draft Report as the Committee had requested and it would be adopted the following week as members had been earlier informed.

Draft Report of the Portfolio Committee on Trade and International Relations on its oversight visit to the Eastern Cape (COEGA & Industrial Development Zone (IDZ)), Western Cape (Saldanha Bay & IDZ) and Aspen Pharmacare 3-5 February 2015
The Committee considered the Draft Report page by page. Members were encouraged to comment and make changes to the Draft Report as was needed.

Mr Koornhof noted that he did not in the Draft Report see a response to his question on COEGA salaries. The Draft Report had to speak to the finances of COEGA.

Ms P Mantashe (ANC) referring to Agri Steels SA noted the concern that scrap metals were being exported out of SA in containers under false pretences. She wished it to be reflected in the Draft Report as such.

The Committee concluded the consideration of the Draft Report without any other comment from members.

Mr Hermans stated that all recommendations made by members including those made by Mr Macpherson would be consolidated into the Draft Report. 

The meeting was adjourned.
 

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