The Portfolio Committee on Economic Development held a sitting after the completion of the public hearings phase on the Competition Amendment Bill. The objective of the meeting was to obtain feelers from Committee Members on their personal experiences and what other suggestions they might proffer.
Most Members felt that the hearings had gone well, and that the representations had been well thought out and clearly presented. There was some concern, however, that not enough had been heard of the views of the general public, and that the input had come mostly from the business sector. A recurring theme from small businesses had been the way in which they were marginalised by the big retailers, particularly in the townships. A Member commented that it was right and necessary that ways were being sought to empower small businesses, because that was where the future of economic growth lay. The only question was whether this Bill was the right place to achieve that, or other legislative mechanisms should be used -- for instance, to reduce red tape in doing business and to remove barriers for entry to small business.
After Members had conveyed their experiences, the meeting was adjourned to the following day so that they could revisit the public submissions in order to make the necessary inputs, with the guidance of the state law adviser.
Stakeholders’ reaction to Bill: Members’ feedback
The Chairperson reiterated the importance of the Competition Amendment Bill, which was aimed at liberating the people. The programme of the day was to get feedback from the Members on the presentations from various stakeholders. Were they happy the way things had gone, or were there suggestions they wished to make? Were the people who had come, representative of the people who had been expected? The submissions made would also be tackled, time permitting.
Mr L Pikinini (ANC) felt that people had come out to speak on the issues that were bothering them and if this Committee could listen, it would learn a lot from them. People were interested in changing things by supporting the Bill. Many felt that it was a step in the right direction. The main refrain was the negative impact big businesses like Shoprite had on small businesses in the townships. Big businesses were decimating small businesses in the townships. The issue of malls moving into townships was also raised, as they were killing spaza shops as a result. This Committee had to ensure that this Bill dealt with the hearts and minds of South Africans. The Members had learnt a lot from the process, and the observation was that South Africans were yearning for change. Comments from them would be included in the final report.
Ms A Mfulo (ANC) said her observation was that though Parliament was ensuring it would come up with a good Bill that would address the lopsided participation of the majority in the economy, when looked at closely there was still a gap where small businesses were still not covered. One expected big businesses to do certain things, yet small businesses were not consciously and systematically protected. For instance, a small business surviving on small corners in the townships were getting decimated by big businesses like Shoprite when they entered into townships. Instead of big businesses helping them to survive by offering them spaces inside the malls and in their shops, the reverse was often the case and this was what this Bill had failed to address. It had to be expressly stated in the Bill that big businesses had to absorb small businesses when they opened in any given area, because this would be a kind of upliftment scheme for small businesses.
She said her travels around the world confirmed this thought process. For example, when one went to the malls in Japan one could hardly find a big business -- instead one would find small cubicles where small businesses were selling and offering various kinds of goods and services. At a hotel in Mexico, to polish their shoes they had to go down to a space provided for small businesses to offer this service. There were all kinds of services reserved only for small businesses. Why could there not be a similar model in South Africa? At this moment, there was only protection but no linkages in the Bill. SA wanted to copy almost everything happening abroad, but no protection was given to the small persons struggling to stay afloat. When one mentioned the things she had referred to, people would tell one that investors were going to run away. However, everyone knew that was not the truth.
Ms C Ncube-Ndaba (ANC) felt that the public submissions phase had gone well. She had picked up that the public who had come out were mostly businesses and not ordinary people. She could not say if this was right or wrong. She agreed with the non-governmental organization (NGO), Section 25, which had pointed out that it had been mainly business people. Public input was what had been lacking in the consultation process.
The Chairperson said the Bill’s hearings had been publicised, so it was incumbent on anyone to make either oral or written submissions if they so wished. This also meant that the Competition Commission should have sensitised the community about the event. More sustained awareness campaigns from them could have helped. There were so many frustrations surrounding the business entry level in SA.
Mr S Tleane (ANC) said that that generally speaking, one could say that the engagements with the various stakeholders had been fruitful. Most of the people who made submissions had done their homework and were clear and concise. The testimonies of many important role players were also helpful, especially where it pertained to the hard work they put in during the National Economic Development and Labour Council (NEDLAC) process. There had been a constant mention of the removal of the “yellow card”, which had been termed a “grey area” by participants. Their argument was unclear, but it was constantly mentioned, and as they had proceeded with their presentation, it had been difficult to determine if they agreed with the outcome of the NEDLAC outcomes. In spite of this perplexity, their views would help to assist the Committee in coming up with a very good Bill. The leadership of this Committee should also be commended for giving the public sufficient time to speak to the Members and for the deliberations. As the Committee proceeded, the opinions of its legal team should be taken into consideration so that it could arrive at a decision that would withstand legal challenges.
Dr J Cardo (DA) felt that the voice of business, or even big business, had not dominated the proceedings, though the press had a different conclusion. It had been very interesting to also hear from small businesses, some of which had had very compelling stories to tell. It was right and necessary that ways were being sought to empower small businesses, because that was where the future of economic growth lay. The only question was whether this Bill was the right place to achieve that, or other legislative mechanisms should be used -- for instance, to reduce red tape in doing business and to remove barriers for entry to small business. This spoke to a broader perspective on competition legislation in driving economic gains. The major concern had been about Section18 (a) in regard to national security. An interesting submission from the International Bar Association was also worth revisiting.
Mr P Atkinson (DA) agreed with Dr Cardo, and said it had been interesting hearing from small businesses of their negative experiences and the anti-competitive behaviour of big business. It was shocking to learn what had been done to the smaller players. Another take away was their insistence that that there should be clarity in the Bill, which could help to enlighten local and international investors. Vodacom, in their submissions, had said that the former legislation was unclear on policy prescripts and sanctions and these should be taken seriously this time around. Overall, the Committee had been pleasantly surprised by the high quality of the submissions received from various stakeholders, which had included the law society, big business and academics.
Ms C Matsimbi (ANC) said her observations were the same as those articulated by other Committee Members. People had all come well prepared, but had all said the Bill was too broad. Perhaps through the legal assistance the Committee would receive, they could ascertain how broad was too broad. They had also said the Bill did not cover the issue of rebates to suppliers.
The Chairperson thanked the Members for their observations and reassured them that there would be more time devoted to addressing the issues raised. She asked what the Committee was taking and leaving from the submissions received. As legislators given the responsibility by the people to represent them, everyone had to have the faith that they were being adequately represented by this institution.
Mr Peter-Paul Mbele, Coordinator: Standing Committee on Public Accounts (SCOPA), was asked if Vodacom had responded to issues that had been sent across to them.
Mr Mbele said they had responded partially, and this would be forwarded to the Chairperson. The bulk of the information needed from them had not yet been attended to, but would be communicated to the Committee when it came through.
The Chairperson asked Members to look into the Bill presented to the Committee by the Department, which was in four parts. It was on prohibited practices, the structure of markets, competition and public interest outcomes, and measures / acquisitions / institutional improvements. Members’ impressions were sought, and they were asked to speak on the submissions, especially on prohibited practices. The prohibited practices, amongst others, covered the abuse of dominance.
Mr Atkinson asked whether the Committee had a dedicated legal person who had taken notes during deliberations, and how such notes fed into the process.
The Chairperson responded that the legal adviser had been introduced to the Committee at the last meeting, before the public hearings had begun. After the discussion on the Bill over three days, inputs from the Committee would be sent to the Minister, who would attend the meeting next week to respond to them. The Committee would again discuss what the Minister had given it, clause by clause, before the legal team would draft the Bill. The Minister would respond to it again before the first consideration of the Bill would be undertaken by the Committee. After that, the report would be tabled to the legislature. Everything was expected to be finalised by 9 October.
Members then requested 20 minutes to look at the submissions. After the 20 minutes had elapsed, the Committee adjourned to following day so that they could revisit the documents and make the required inputs. They were reminded that the state legal adviser was on hand should the Members need technical legal guidance.
The meeting was adjourned.