State-owned companies contribution to jobs created: DPE briefing
13 March 2019
Chairperson: Ms L Mnganga-Gcabashe (ANC)
The Department of Public Enterprises presented to the Portfolio Committee on Public Enterprises the State Owned Companies (SOC) contributions towards women empowerment and youth job creation. The presentation addressed numbers of employees and programmes targeting youth and women empowerment in terms of jobs creation. Also addressed were skills creation, long term focus areas, SOC artisan development targets, challenges, proposed short to medium term interventions and promotion and support of women and youth-owned businesses.
The Committee questioned why companies were not accepting on-the-job learners, rural youth and women accepted into the programmes, bursary receipts not working at SOCs as part of the repayment of the bursary because the SOC did not have the funds to pay the stipend and women contractors. Members asked why artisans were dropping out of the programmes, the nature of the contract signed between the SOC and the learners and if there is follow up and support given to artisans trained by the SOCs released into the labour market.
As this was the last meeting for the Fifth Parliament, the Chairperson seized the opportunity to thank all Committee Members for the support noting that despite coming from different political parties, the debate that took place in the Committee was civil and healthy.
Briefing by the Department of Public Enterprises (DPE)
Ms Vuyo Tlale, DPE Chief Director: Industrialisation and Localisation, stated that State-Owned Companies (SOCs) employ over 100 000 employees and have targeted youth and women empowerment programmes with job creation. Skills, being a critical enabler of employment, SOCs therefore support the national economic development agenda by providing identified scarce and critical skills such as artisans, technicians, engineers and pilots and core skills in sector specific occupations.
The focus is on long-term occupationally directed learning interventions leading to qualifications and thus contribute to employment creation. Due to their long-term nature, trainees acquire much needed practical experience whilst at the same time earning allowances. Work experimental learning and On-The-Job Training (OJT) components are critical for closing the experience gap and preparing learners for absorption into the labour market after completion. SOCs place some graduates into either fulltime or contractual employment after completion.
In terms of SOC artisan development own funded targets, as at 31 December 2018, DPE SOCs collectively enrolled a cumulative number of 9 823 in various artisan trades as part of supporting the national target on artisan development. The number of artisans qualified over the last five years is 4 938 of which 1 510 were absorbed within SOCs and 3 428 released into the labour market. These are SOCs self-funded numbers on artisan development excluding National Skills Fund (NSF) supported learners. Of the 1 000 cohort of Transnet, 949 have already qualified with Red Seal Artisan Certificates and released into the labour market - eight are still in the system preparing for trade tests and 43 dropped out of the programme.
Turning to challenges, the major challenge why there are still too many learners in the system, especially for Denel, is due to the difficulty in getting placement for OJT. It is a critical component for learners to qualify. The biggest challenge is getting companies to let these learners in.
Ms Tlale addressed SOC provision of scarce and critical skills noting that in addition to artisan development, SOCs contribute to development of other scarce and critical skills. Over the past five years, SOCs collectively enrolled 20 655 learners in various programmes as follows:
-Engineering: 3 119
-Technicians: 2 718
-Cadet Pilots (SA Express):16
-Sector Specific: 8 306
-Strategic Youth Development Initiative: 6 496
There is a throughput/completion rate of 11 088 out of 20 655 of which 1 638 were absorbed within SOCs. Furthermore, a placement into Work Integrated Learning amounted to 2 400. A total of 4 685 bursaries were awarded across the portfolio over five years.
In terms of promotion and support of women and youth-owned businesses, over five years, SOCs procurement spend on women and youth-owned enterprises increased by 105% from R12.6 billion to R25.9 billion in 2017/18. The main contributors are Eskom with 53% and Transnet with 22%. In an effort to encourage SOCs to do more in this area, new initiatives are being developed and implemented to ensure an improved support of youth and women-owned businesses.
Proposed short to medium term interventions include mainstreaming of women-focused targets in annual shareholder compacts in terms of job creation and employment equity targets and skills development targets.
BBBEE targets include:
-Leveraging CSI and disposal process of SOCs non-core assets to empower targeted groups
- Implementation of enterprise development programmes to mentor, guide, nurture and support youth and women-owned QSEs and ENEs to become independent, flourishing businesses and qualified suppliers
- Implementation of the Localisation Strategic Framework to leveraging SOC’s procurement spend to promote transformation and integration of youth and women-owned QSEs and EMNEs in their core chains and that of their suppliers
Ms G Nobanda (ANC) referred to the point in the presentation where it stated there was a challenge of on-the-job placement of completed learners and questioned the reason for the companies not accepting these learners. Could it be a shortage of willing companies or do they have rules or perception that the learners are unsuitable? On youth and women, how many of the learners accepted into this programme are from the rural areas? Previous presentations to the Committee did not mention how many of these learners come from the rural areas. What is the Department and SOCs doing to recruit rural folks into the programmes? Is their strategy to recruit rural youth and women?
Mr E Marais (DA) remarked there was a family member of his that has been given a bursary for two years by Eskom but was required to work for Eskom two years after the bursary. What happened was that after a year, this person and others were asked to go and as a result did not need to work back the agreed two years neither were they required to pay for the year not worked for according to the agreement initially reached. This was because Eskom said it had no money to pay the little stipends. Even though the presentation paints this wonderful picture of a functional programme, the reality is that it is not so. The Department should take note of this.
The Chairperson noted the presentation was meant to address youth and women job creation but figures indicate only the youth is mentioned and not women in terms of intakes. The table in the presentation discussing Eskom’s contractor academy shows that out of 150 only 47 were youth - how many are women then? If specific numbers are not mentioned, how are the Key Performance Indicators measured? If it is not written, one can only conclude there were no women contractors. Also the Eskom small business competition has 50 youth beneficiaries but mentions nothing about women and also has no baseline. What does FGD mean in the presentation?
In response to the question about on-the-job training, Ms Tlale said the Denel training academy has a specific capacity it can accommodate. Another point to mention is that the private sector has its own training programmes so not all trainees can be absorbed at Denel. More partnerships with the private sector are therefore needed to address these shortcomings. On the number of beneficiaries from the rural areas, DPE does not have that information now but it will be obtained and forwarded to the Committee. On the strategy for recruitment from the rural areas, the Department has provincial engagements which were previously run by the past Deputy Minister. In this programme, a roundtable discussion takes place between the SOCs, DPE, provincial and local departments. The aim is for the SOCs to expose their programmes to the provinces - that is the Department’s strategy for now. That is not to say that the SOCs do not have other strategies on their own to reach learners in the rural sphere. The Department notes Mr Marais’ comments and will take it to the DDG responsible for Eskom. The information on how many of the 150 Eskom contractor academy constitutes women will be obtained and sent to the Committee as well as the baseline on the small business competition.
FGD is Flue Gas Desulfurization - in general, it is part of the initiative to reduce emission of gas into the environment. FGD is fitted into the power stations and the by- product from FGD is then utilised for brick making and other uses.
Ms Nonny Mashika, DPE Director: Aviation, added that women empowerment in the rural areas is taken seriously. The Department is cognisant of the fact that some of the skills required within the supplier development zone are often quite technical for women in the rural areas. The focus has always been on how to recruit women in rural settings through the provincial engagement framework to equip them with the right skills so they can participate meaningfully in programmes coordinated by SOCs in their supplier development projects. This is one of the programmes pioneered by DPE in conjunction with the Department of Trade and Industry (DTI).
In a follow-up question, the Chairperson referred to the point in the presentation where it dealt with the development of artisans through the National Skills Fund over five years - the 2013 column referencing Transnet stated that planned beneficiaries were 1 000 learners as at 31 December 2018. At face value that equated to zero performance. The way the report is structured must be corrected because it is clear that 949 artisans qualified, 43 dropped out and three are still in the system preparing for trade tests. The 949 that qualified somehow should have been reflected in the table. It is also necessary for the SOCs to communicate in advance to their bursary recipients if it was unable to pay stipends to the bursary recipient which ultimately led to reducing the work back years of these bursary recipients from two years to one year.
Ms D Rantho (ANC) also added that she is worried about the information populated in some of the tables in page the presentation. Why are artisans dropping out of the programmes? Is it because of the lack accommodation, meals or funding? What is the nature of the contract signed between the SOCs and the learners? Is there any follow-up in terms of the artisans trained by the SOCs that were released to the labour market? Are they given any kind of support and monitored?
Ms Tlale said that the Department has taken note of the comments and will investigate the contractual agreements entered into with the artisans to ascertain whether they contribute to the dropout rates. A comprehensive response will be sent to the Committee. The DPE will engage with the relevant units that deal with the Department of Labour, municipalities and the Department of Higher Education and Training to have a more robust engagement as it relates to the artisans.
In conclusion, the Chairperson advised the Department not to work in silos and to furnish all promised information to the Committee Secretary before 19 March 2019. Information regarding the SAA pilot flying internationally with a domestic license should be added to the information to be provided to the Committee.
Committee minutes dated 6 March 2019 was adopted without amendments.
As this was the last meeting for the Fifth Parliament, the Chairperson seized the opportunity to thank all Committee Members for the support received since her appointment as Chairperson on 21 October 2017. It has been a bumpy road because the Chairperson joined the Committee when it was dealing with the Eskom Inquiry. It was a journey filled with education and the experience has been rewarding. Despite coming from different political parties, the debate that took place in the Committee was civil and healthy. This message is from the heart and should be conveyed to all Members who were unable to attend the meeting today. She concluded and prayed that the elections should be safe and deepen SA’s democracy.
The meeting was adjourned.
Marais, Mr EJ
Mnganga-Gcabashe, Ms LA
Nobanda, Ms GN
Rantho, Ms DZ
Singh, Mr N
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