Export Credit Insurance Corporation Annual Report & Quarter 3 performance

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Trade and Industry

19 February 2019
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Export Credit Insurance Corporation of South Africa briefed the Portfolio Committee for the first time during the Fifth Parliament.

The Corporation began by explaining that, just after the Second World War, trade was perceived as a big issue driving the well-off nations and other countries sought ways and means of getting into exports. There were a lot of risks involved in exporting, including political upheaval, non-payment for goods, and non-delivery of goods. The Export Credit Insurance Corporation was created to carry the risk of exporting and also to obtain better opportunities for exporters. The exporting government took the risk for exports and put the risk on the balance sheet of the state to ensure better terms for the exporting country. The Corporation board tried to be strategic and played in the area of market failure where private enterprises were not confident enough to take the risk. As the legislation dated back to 1957, the Corporation and the Department of Trade and Industry were considering a review of the founding legislation.

The Corporation’s financial highlights included financial assets of R 7 billion, a total insured value of R 27 billion, a solvency ratio of 685% and a total equity of R 4 billion. The Corporation had achieved an unqualified audit opinion in 2017/18 with one finding relating to an accounting policy note which had been corrected to reflect the correct accounting approach in accordance with the International Financial Reporting Standards.

In its 2018/19 Quarter 3 Performance Report, the Corporation noted that it had achieved 90% of its targets. The only one outstanding, the training plan implementation had been put back to the Fourth Quarter.

There were three major challenges. The Corporation was looking for income tax exemption of the DTI transfers which were entirely for repayment of the Interest Make-Up liability rather than operational expenses. Income tax functional currency was a challenge in that, as per the December 2018 results, the Corporation had achieved a profit before tax of R 26 million based on the US Dollar functional currency, but the tax calculation based on the Rand functional currency had resulted in a loss after tax of R 247 million. Thirdly, National Treasury believed that the Corporation needed a Government guarantee to determine the Corporation’s underwriting capacity.

Members noted the possible the review of the Act and asked if it would change the mandate completely or whether it would bring the Act in line with the current focus. Members asked how the Export Credit Insurance Corporation determined the premium in the event of political risk and how it helped companies recover their commitment, whether import or export. How would ECIC help black exporters, especially small businesses that often did not know about the institution? Was there any education or awareness so that small and emerging black businesses knew about the work of the Corporation and how it could assist exporters?

The Committee welcomed jobs across the board, but asked if the Corporation could ensure that its interventions could look to semi-skilled jobs to improve the ratio between unskilled, semi-skilled and skilled jobs that t supported through its projects.

Members finalised the Portfolio Committee on Trade and Industry Second Quarterly Report which commended the Department of Trade and Industry on the good work that it had done in the Second Quarter. However, while acknowledging the work begun on the proposed merger of the National Empowerment Fund with the Industrial Development Corporation, the Committee was concerned about the slow progress. It remained concerned about the delay in finalising the recapitalisation and hoped that once the reconfiguration had taken place, recapitalisation would follow.

Meeting report

Opening remarks
The Chairperson addressed the agenda and the arrangements for the day as Members were balancing various commitments.

The Chairperson welcomed Ms Ntombi Matamela, Acting Group COO, Department of Trade and Industry (DTI), and Ms Lerato Mataboge, DDG: Trade and Investment South Africa, DTI. She welcomed the changes in race and gender in senior management at DTI. She noted that the competency of women was being recognised and that there were highly competent women coming to the fore and occupying senior positions.

She also welcomed the delegation from the Export Credit Insurance Corporation of South Africa (ECIC) representatives: Chairperson Dheven Dharmalingam, Chief Executive Officer Kutoane Kutoane, and CFO Noluthando Mkhathazo. She welcomed Mr Dharmalingam on his maiden visit to Parliament.

Mr D Macpherson (DA) asked for an opportunity to speak to his letter to the Chairperson.

The Chairperson informed him that she had spoken to it at the previous meeting, but he had not been in attendance. However, the matter would come up in matters arising from the minutes.

The Chairperson requested the ECIC to explain why it existed as a background to the presentation to give Committee Members an understanding of the ECIC. What was the ECIC and why had it been created?

Presentation of the Integrated Report by the Export Credit Insurance Corporation of South Africa
Mr Kutoane began by explaining that just after the Second World War, trade was perceived as a big issue driving the well-off nations and countries sought ways and means of getting into exports. There were a lot of risks around exporting, such as political upheaval, non-payment for goods, non-delivery of goods, etc. The ECIC was created to carry the risk of exporting and also to obtain better opportunities for exporters. The exporting government took the risk for exports and put the risk on the balance sheet of the state to ensure better terms in the importing country for the production of the exporting country. It was a means of competitive bidding. Initially, it was mainly political risk cover as a result of war throughout the world. As it evolved, it became necessary to offer commercial risk as well. Usually it covered end-to-end, i.e. all commodities. The model chosen for SA was to support the capital goods industry. Currently ECIC was looking at a new operating model to deal with the exports of small businesses and the merchandise export where businesses might not have access to banks without underwriting of the risk.

Mr Dharmalingam added that the board tried to be strategic and played in the area of market failure. It did not play in those spaces where private enterprises were confident enough to take the risk. The ECIC stepped in when the private exporters would not get involved, i.e. where there was market failure. ECIC was the official Export Credit Agency (ECA) of South Africa which insured against political and commercial risk relating to export of capital goods and services from SA. Its mandate was the facilitation of SA export trade and cross-border investments with the rest of the world, but with a strong Africa and regional focus.
The Chairperson thanked them for the background that made it easier to understand the presentation.

Mr Kutoane indicated that the ECIC had been enabled by the Export Credit and Foreign Investments Insurance Act, 1957.

The Chairperson noted that the Act was very old and might well need to be revised.

Mr Kutoane agreed. The Minister of Trade and Industry had suggested that the Act be reviewed because it had been bastardised along the way.

He stated that ECIC worked closely with DTI and had to support the SA content requirement of 50% for Africa-bound projects and 70% for projects elsewhere. He noted that there was a need for a closer alignment of cross-border financing strategies with the Industrial Development Corporation (IDC), the Public Investment Corporation (PIC) and Development Bank of Southern Africa (DBSA).

Financial highlights included:
- financial assets of R 7 billion
- total insured value of R 27 billion
- solvency ratio of 685%
- gross written premiums of R 887 million
- underwriting profit of R 389 million
- 100% of targets had been met
- the total equity of ECIC was R 4 billion.

There were two material risk issues: Government and credit rating downgrades and Interest Make-Up (IMU) liability risk perceptions. The ECIC saw two material opportunity issues: SA EXIM Bank, i.e. an export and import bank for SA to support SMEs and other nascent export industries; an Afreximbank investment would add impetus and capacity to execute the ECIC strategy more effectively. ECIC had an investment of $50 million in Afrieximbank.
The ECIC had achieved an unqualified audit opinion in 2017/18 with one finding relating to an accounting policy note which had been corrected to reflect the correct accounting approach in accordance with the International Financial Reporting Standards. The finding had been addressed.
To prevent a similar finding, the impact of all upcoming International Financial Reporting Standards and updates had been assessed and a task team had been formed to deal with International Financial Reporting Standards 9 and 17. Implementation would be in the 2021/22 financial year.
2018/19 Quarter 3 Performance Report
The ECIC had achieved 90% of its targets, i.e. 9 out of 10 targets. The training plan implementation had to be put back to the Fourth Quarter.

There were three major challenges. The ECIC was looking for income tax exemption of the DTI transfers which were entirely for repayment of the IMU liability rather than operational expenses. Income tax functional currency was a challenge in that, as per the December 2018 results, ECIC had achieved a profit before tax of R 26 million based on the US Dollar functional currency but the tax calculation which was based on the SA Rand functional currency had resulted in a loss after tax of R 247 million. Thirdly, National Treasury believed that ECIC needed a Government guarantee to determine the ECIC underwriting capacity.
The ECIC reported a surge in power and manufacturing projects across Africa and was looking at off-shore oil and gas in Mozambique. ECIC estimated that it had added approximately R 16.5 billion to the SA GDP and about 60 000 job opportunities in SA. ECIC had added approximately 100 000 job opportunities in host countries.

Discussion
Mr A Williams (ANC) thanked the ECIC for the presentation. He asked about the review of the Act. Would it change the mandate completely or would it bring the Act in line with the current focus? A radical change in the Act could change everything that ECIC was currently doing. Was it simply an update? DTI could respond.

Ms P Mantashe (ANC) appreciated the presentation but she had missed the point about the dip in assets. What was meant by ECIC’s estimated contribution? Why was it not a concrete statement or an exact amount? Why was it an estimate?

Mr S Mbuyane (ANC) stated that it had been an eye-opening presentation. He asked how the ECIC determined the premium in the event of political risk and how it helped companies recover their commitment, whether import or export. He asked if the ECIC had a document containing a broader perspective of the ECIC so that Members could engage with the issues and gain a full understanding of its mandate.

Mr D Mahlobo (ANC) commended the ECIC on the clean audit outcome. It was a favourable audit. He recommended that the new CFO and the CEO should put together an audit remedial action plan. There should be no emphasis of matter for the ECIC. Integrity was key as it had to consider its rating. That meant that it had to meet stringent requirements and the need for clean governance was very important. How had the matter of emphasis arisen and what did the CEO intend to do about it?

Mr Mahlobo noted the remark in passing around the taxation regime and possible exemptions. What was the thinking of the agency about those matters? And what was the thinking of DTI about those considerations? If certain considerations were to be made, the risk issue had to be managed. ECIC would have to find a mechanism so that, as the country was being transformed, it included more black people as many black people were getting into exportation. How would the ECIC help black exporters, especially small businesses that often did not know about the institution? Was there an awareness programme? Was there any education or awareness so that SMMEs knew about the work of the Agency? Even some legislators were not familiar with the work that it did as some of the legislation was very old. He noted that there were security concerns and the risk of crime was very high. Overall, the ECIC was managing a very tight ship.

Ms L Theko (ANC) referred to slide 12. How was ECIC making sure that scarce skills were being developed in SA? Was it tapping into the SA education system to ensure that people were being trained appropriately? The ECIC investments were long-term so there was time to train people. What about the Fourth Industrial Revolution? How was that being taken into account and how was ECIC going to ensure that SA, and especially the youth, would benefit?

The Chairperson referred to slide 10 which referred to the risk due to obligations being in US$ while the DTI grant was in SA Rand. The volatility of currency had been a problem right throughout the business sector since 1994. That needed to be taken up in the review of the legislation. The matter of skills and training had been referred to by Ms Theko. A reference had been made to training being not yet on track, but she noted that ECIC had stated that measures had been implemented to ensure it would be on track. She appreciated the valuation addition to the economy and the way in which it had been broken down.

The Chairperson noted the issue of jobs. Slide 23 referred to 60 000 job opportunities in SA and 100 000 in the host countries. The presentation showed 60 000 jobs, but they were largely unskilled. The Committee welcomed jobs across the board, but could the interventions not look to semi-skilled jobs to improve the ratio between unskilled, semi-skilled and skilled jobs? Towards the end of the presentation, there seemed to be a flattening out of the ratio and things did not seem to be too bad in that regard.
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She welcomed the presentation which had come at a very important time when the African Continental Free Trade Agreement was coming into existence and an expansion of SA trade was happening. ECIC was an important SOC (state-owned company).

Mr Dharmalingam indicated that he would manage the responses.

Mr Dharmalingam responded to the question about the ECIC mandate. The ECIC wanted to be world class because it competed, not with local agencies, but with international Export Credit Agency (ECAs) such as China, India, etc. that exported around the world. ECIC had to have an entire toolkit to compete. ECIC was one of many bits that the country had to put together. ECIC needed to work with the Industrial Development Corporation and with SA banks, etc.

The mandate had been written in 1957. In 1957, SA was looking to export goods but all that had changed, even the definition of goods had changed. Goods were now made from goods imported from all over the world. As an example, he referred to Bell Equipment which brought semi-knockdown equipment into the country. The items were put together and then exported. The current mandate was that content had to be 50% SA, but SA goods often did not have 50% SA content. So, what was the right percentage of SA content? Bell Equipment did not have 50% SA content, but it provided over 600 jobs in SA. The idea was to be smarter than competing ECAs. The ECIC had asked to look at the definition of capital goods to be more effective, not to change what the ECIC did. Political risk cover would not change but what the organisation wanted to export would widen. The definition of goods had to be expanded to include the product set of the Fourth Industrial Revolution. The creation of an EXIM bank which would provide the finance, would play a critical role in the sum of the products that the ECIC supported.

Ms Mataboge responded to Mr Williams’ question on the magnitude of change that DTI was looking at. DTI was seized with the question of what the Department needed to do to effectively support SA exports to the rest of the continent, specifically, and to the rest of the world. The focus was underpinned by the President’s priority of export-led growth and export-led industrialisation. DTI was conducting an assessment of the measures that were in place and the findings of that assessment had to lead to a road map. If that road map led to a need to amend the founding legislation, that was what would happen, and the DTI would have to come back to the Committee with the proposed legislation. However, the Department did not want to pre-empt the road map but was leaving itself open to a legislative review.

Ms Mataboge stated that to date the assessment had uncovered that SA did need an EXIM bank. DTI supported an EXIM bank for SA which would support the insurance business with the lending business. There were questions as to what that meant for the ECIC. Would the ECIC remain in its traditional form or should there be an additional entity? DTI did not want to make a mistake as it was a complex situation, but the assessment and all the reports would be brought to the Committee for support and advice. The question was whether DTI was effectively supporting SA’s exports and that was what the Committee held DTI accountable for, so the Department wanted to ensure that there was an effective system in government between the SOCs and DTI to support exports.

Mr Dharmalingam asked the CEO to respond to questions around the dip in assets and the question of estimates.

Mr Kutoane explained that the interest environment that ECIC worked in was called IMU - Interest Make-up mechanism or grant. When a bank lends, it lends at a particular interest rate, but the banks lend in dollars and so when SA banks went to borrow at the L Liability Rate plus a margin, it could not meet the margin when competing with banks from Germany, France and the US. The government would then subsidise the banks to close the gap. That subsidy was the IMU. If one supported an exporter, one would subsidise the exporter by the IMU. That scheme had been administered on behalf of the DTI by the ECIC since its formation in 2001.

Mr Kutoane stated that a challenge had arisen when the auditors had said that the money was not being accounted for in the correct manner. The money should be on the balance sheet of the ECIC. There was a debate as the ECIC thought that the money should be on the balance sheet of the DTI. A legal opinion was obtained, and it was determined that ECIC would have to absorb that money. It was important to calculate the money in the ECIC because the ECIC had to absorb the risk. The balance was about R 2 billion at that stage because the ECIC bridged long-term funding and had allowed the fund to build up as the Medium-Term Expenditure Framework (MTEF) funding was for three years only. In 2014, the ECIC decided to suspend the IMU until it was able to liquidate the R 2 billion, which would be in 2021. The ECIC was on track to do that.

Mr Kutoane added that there was a second challenge and that was that the grants from DTI came in SA Rand but the obligations for the projects that the ECIC supported were in US$ and so when the US$ was strong, there was a shortage of Rand and a gap opened. However, SARS saw only the money in Rand and saw it as a lot of money so ECIC was taxed quite heavily in Rand. He was not sure if he had explained well enough for Members to understand.

The Chairperson was satisfied with the explanation but noted that he had used financial terms such as the London Liability Rate which Members might not understand. She explained that the London Liability Rate was referred to as a basic rate of interest. Special words had to be explained.

Mr Dharmalingam added that he would say it bluntly: The dip in assets was because ECIC, a SOC, had taken on the IMU liability of R 2 billion for government. It was as simple as that. It was currently on the ECIC balance sheet. Was it the right thing to do going forward? Possibly it was. He did not believe that companies should be permitted to act in an agency capacity and if there was a mandate, it should be a clear mandate and if there was any liability, it should go on the balance sheet. The R 2 billion had been a major charge to the balance sheet.

Mr Kutoane responded to the question on the estimates. The ECIC had developed a model based on multipliers, and the input/output analysis. Using multipliers, the SOC could work out how many manhours would be needed to produce so much of the goods. Taking those multipliers, the ECIC applied them to the sectors that it had supported, and it had come up with those numbers in the presentation. One of the things was that ECIC had initially supported a lot of mining projects where there was a higher use of unskilled labour. The portfolio had since shifted into more technological businesses, such as power production, telecommunications and manufacturing where semi-skilled labour was required.

Mr Dharmalingam noted that the next question was how to determine the premium. He wanted to ask the CFO to explain but she had said that she was too new in her job to do the responses.

Mr Kutoane stated that in talking about how to determine the premium, he needed to explain that the ECIC worked with a global body of credit agencies, the international Association of Export Credit Agencies. Initially, there was something called ‘The Arrangement’ that had been developed by the Organisation for Economic Co-operation and Development (OECD). The OECD had an arrangement for calculating the risks per category of countries which determined the premium on the political risk and the credit risk. That system had been inherited by the ECIC but, with time, the ECIC had developed its own method of determining risks and its own rating system which sometimes produced different results. The ECIC would invest in a country like Zimbabwe when other credit agencies would not.

In response to the actual question of how one could ensure that in the case of a project failure, one could recoup the premiums because one earned the premiums over the life of the project, the CEO explained that, because it was long term risk of high capital projects, there were mechanisms for restructuring the risks. There was a lot of restructuring of the risks. It was the nature of the business. For the 17 years that the ECIC had been in business after taking over from DTI, it had had no major claims. The ECIC did not foresee a major risk but if a claim came, it would not harm the SA export industry as ECIC was running a tight ship.

Mr Dharmalingam added that the power of the ECIC to write premiums in insurance with the ability to recover even in a worst-case situation, was its link with government and the ability to use government relationships cross-border and to renegotiate and recover any premium that had gone bad. The relationship with government made a huge difference and its pricing model took into account the relationship with other countries. The ECIC would underwrite Zimbabwe because of the relationship between the two countries.

Mr Dharmalingam informed Mr Mbuyane that the ECIC could provide a handbook or take Members through the Integrated Report off-line.

The Chairperson agreed that the handbook would be useful because it was the first time in that term of Parliament that ECIC had presented to the Committee and some Members were new to the Committee.

Ms Mkhathazo, responded to the question on the accounting policy relating to insurance statistics. Previously, the ECIC had been audited by private auditors, such as KPMG, but in 2017/18, the AGSA had audited the ECIC. The AGSA had said the accounting policy did not speak specifically to insurance receivables so ECIC had to have an accounting policy for general receivables and a separate accounting policy for insurance receivables, and those had to disclosed separately. In the old accounting policy, the ECIC used the effective interest method for general receivables, whereas for insurance, the SOC did not discount. That was where the misalignment was.

Mr Dharmalingam stated that he was independent and was not part of the management team so he could say that the Auditor-General was wrong and he had disagreed with the Auditor-General and had had a fight about it as he felt that the AGSA did not understand long- term insurance. But, after all, the Auditor-General was the Auditor-General and the ECIC could not change the Auditor-General’s mind. An international auditing firm would not have declared an instance of matter. It was just a lack of understanding on the part of the Auditor-General. The CFO was being very kind to the AGSA.

The Chairperson noted that the Committee would have to refer the issue to the Auditor-General and ask for an explanation of the matter.

Mr Mbuyane stated that his question had not been properly responded to. Seemingly, the ECIC looked at the faces of countries and decided on a premium based on that. Was the risk profiling just looking at a country? He believed that there should be a standardised premium that was workable. Also, the ECIC should have a policy to guide the SOC. Was it governed by the SA Constitution and its policies or was it governed by an OAU kind of analysis? He asked about the misalignment of the Rand against the Dollar. The responses could be packaged in the promised document so that the Members would be able to engage.

The Chairperson agreed that, in addition to the profiling, Members would like to know about the risk profiling. The ECIC had already indicated that it had shifted from the European one and developed its own approach. What factors were taken into account and was there some scoring of the factors that enabled the ECIC to reach an informed decision? What was the policy around that? ECIC could provide the answer in a written response and the Committee would call the officials back if need be.

Mr Williams asked how the institution related to transformation. A lot of the companies to which the government wanted to give support would be black-owned and black-controlled as opposed to the companies which the organisation had been assisting since 1957 that had been white-owned and white-controlled. What assistance did ECIC give to emerging black companies that, for the first time, wanted to start exporting to other countries? Secondly, he took exception to Mr Dharmalingam saying that the Auditor-General was wrong. Mr Dharmalingam did not have the authority to tell Parliament that the Auditor-General was wrong as Parliament accepted that the Auditor-General was always right. It was not a thing to say in Parliament, even if one was outspoken. The Committee would ask the Auditor-General to give Members clarity on that and if Mr Dharmalingam was wrong, he would be coming back to explain.

The Chairperson noted that to some extent, it was a protocol-related issue. She added that she had already said that the Committee would be requesting clarification on the matter. There were different accounting approaches between the public and the private sector, but neither was right or wrong. They were different approaches.

Mr Kutoane stated that the ECIC was very clear about its role in transformation. In terms of the type of projects that the ECIC supported there might be one contractor but that contractor was the aggregator who had to aggregate all the people in the value chain. The ECIC was concentrating on tying contractors to the value chains which supported black businesses. The ECIC was supporting a project of R 1 billion and it was ensuring that the value chain would be supported and strengthened.

Mr Dharmalingam stated that he respected Mr Williams’ point. He would respond to the question around taxation. He informed the Committee that the ECIC wanted to position itself from a competitive space point of view and, at the same time, the ECIC was a tax paying entity. Compared to most ECAs around the world, the ECIC did not fall into the same space. The international ECAs were not regulated entities from a prudential authority point of view, whereas the ECIC had to accord with the old Financial Services Board. That came with a requirement of international rating agencies from which ECIC had to get an independent rating. The SOC was very mindful of that. For that reason, management always ran the business on the basis of ensuring that it could compete and accord with international rating agencies. The major banks that took the ECIC risk cover relied on its independent rating. To go back to the taxation point, he stated that other ECAs did not pay tax whereas the ECIC did and that put it on the back foot. From a pricing point of view, ECIC had a higher price as it had to price in the taxation and that was something that the Committee should look at going forward.

The Chairperson set a date for the receipt of the requested documents. She suggested Thursday afternoon or Friday so that documents could be circulated to Committee Members before the following Tuesday, which was the date of the next meeting.

She added that there had been a request that SMMEs be made aware of the service that the ECIC offered because the focus was shifting to SMMEs. That had to be included in the handbook which the Chairperson wanted by 10 – 12 March 2019 so that it could be acknowledged in the meeting of 13 March 2019 and if anything had to be clarified, it could be raised at that meeting.

The Chairperson thanked ECIC for briefing the Committee and wished the new CFO well.

Second Quarterly Report of the Portfolio Committee on Trade and Industry
The Chairperson stated that the deadline for comment on or contributions to the Report had passed. Those comments received had been incorporated in the Report.

The Chairperson stated that she would only go through the conclusions in detail. The conclusions were as follows:
1) The Committee commends the Department for having achieved most of its Second Quarter targets as outlined in its Annual Performance Plan.
2) The Committee also commends DTI for being one of the few departments whose staff profile represents the demographics of our country in terms of race, gender and people with disabilities.
3) The Committee recognises that although there has been a significant under-expenditure of 20.7% against planned expenditure, this is not unusual for the Second Quarter given the payment of claims against granted incentives.
4) The Committee reiterates its support for the B-BBEE legislation as an instrument to advance the transformation and ownership of our economy.
5) While the Committee acknowledges the work begun on the merger proposal of the NEF (National Empowerment Fund) with the Industrial Development Corporation. It remains concerned about the delay in finalising the recapitalisation and hopes that once the reconfiguration has taken place, recapitalisation would follow.
6) The Committee welcomes the DTI’s efforts to facilitate community participation and awareness raising through roadshows regarding legislation such as the Amendment to the Liquor Act. The Amendment seeks to deal with fragmentation of the liquor laws between provinces.

Recommendation
Informed by its deliberations, the Committee recommends that the House requests that the Minister of Trade and Industry should consider:
Tabling a report clarifying the reasons for the delay in listing the Black-based Black Economic Empowerment Commission.

Mr Mahlobo proposed the adoption of the Second Quarterly Report of the Portfolio Committee on Trade and Industry. Ms Mantashe seconded the proposal.

The Chairperson clarified that the report from DTI on the Sugar Industry update was being photocopied and would be handed out the following day.

The Committee Secretary confirmed that Members would receive the documents the following day.

Minutes
Minutes of 12 February 2019: Ms Theko proposed the adoption of the minutes without amendments. The proposal was seconded by Ms Mantashe.

Mr Mahlobo asked that future minutes indicate when a topic in a meeting was a follow-up. The minutes should give the date of the previous meeting and what was being followed up under the heading ‘Update’. That would create the interlinkages.

The Chairperson agreed that it was a constructive proposal and that it should be done.

Minutes of 13 February 2019: Mr Mahlobo proposed the adoption of the minutes without amendments. The proposal was seconded by Mr Mbuyane.

Matters arising from the minutes of 13 February 2019
Resolution: That the DG be asked for an updated report on the situation regarding the Sugar Industry.
The Chairperson should engage with the relevant stakeholders.

The Chairperson stated that the DTI had responded but there had been certain equipment technicalities and the document would be distributed the following day. The Chairperson had not yet contacted stakeholders because she had been waiting for the response from DTI. She had not yet read the response and would not contact stakeholders until she had.

The Chairperson noted that the status report on Kuga requested from the NCC had not been provided. The DTI report on the current capacity in terms of scarce skills required by all entities had not yet been provided.

Mr Mahlobo reminded the Chairperson that the Committee had been interested in the scarce skills.

The Chairperson asked the Acting COO, Ms Ntombi Matemela, to ensure that the report was furnished by the end of the week.

Mr Macpherson asked what was happening. The Chairperson had issued a press statement that said she would deal with the matter of the Sugar Industry, but she was dodging, ducking and diving.

The Chairperson explained that Mr Macpherson had not been at the previous meeting when the matter had been discussed and she had given reasons for delaying her contact with the stakeholders.

The Chairperson stated that she was adjourning the meeting.

Mr Macpherson was not recognised but continued speaking even after Ms Mantashe had been given permission to speak.

Ms Mantashe took offence to Mr Macpherson accusing the Chairperson of ducking and diving.

Closing remarks
The Chairperson announced that she was adjourning the meeting as she had to attend a Chair of Chairs meeting immediately.

The meeting was adjourned.

 

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