UK Trade Agreement; Industrialisation/Localisation Committee Report; Legacy Report

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Trade and Industry

13 March 2019
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

Available here once published: Legacy Reports

The Department of Trade and Industry briefed the Committee on the status of the negotiations of a rollover Economic Partnership Agreement between the Southern African Customs Union Members States, Mozambique and the United Kingdom in the light of the approaching Brexit deadline of 29 March 2019.

The British Parliament would be meeting in the course of the week to determine whether it should accept the current exit agreement, whether to leave without an agreement or whether to ask for an extension of the date for leaving the European Union. Thereafter, on Friday 15 March 2019, the Southern African Customs Union, Mozambican and United Kingdom Ministers would meet jointly to discuss and possibly conclude the treaty. There was concord between the parties to consider a bridging agreement which would be in place for six months and would carry forward the current arrangements, should the full trade agreement not be signed in time for Parliament to ratify it. The Department believed that all bases had been covered as the bridging agreement did not need parliamentary approval, but hoped for a permanent agreement as that would offer slightly better opportunities for South African products.

Members asked whether the South African negotiating team was engaging with the European Union in respect of the deal. They want South Africa to possibly alienate its EU partner by making a deal with its soon-to-be former partner. How were the Phyto-Sanitary concerns going to be resolved with the United Kingdom going forward? If the country’s Southern African partners were not ready, would South Africa try to go it alone with a rollover agreement? How would Article 50 impact on the signing of the proposed agreement? What was the situation in respect of the rules of origin of products?

The Committee sent a request to the Programming Committee to accommodate a presentation by the Minister on an Agreement with the United Kingdom before Parliament rose, if the Agreement was signed and tabled by 18 March 2019, so that the House could consider the said Agreement.

The Committee discussed its Interim Report which addressed factors impacting on localisation and local public procurement. The report would explain that, given the shortage of time available to the Fifth Parliament, the Committee had documented the progress made in respect of localisation for the matter to go forward to the Sixth Parliament. Key recommendations included engaging the Minister of Finance and all relevant Ministers to determine the funding model for the South African Bureau of Standards’ verification of local content and production, as well as the timing of the   verification. Every contract entered into by the State should include penalties for non-compliance with the Preferential Public Procurement Framework Act, including local content and Broad-Based Black Economic Empowerment requirements. State-Owned Enterprises had to ensure that irregular contracts, where legally possible, were cancelled and the funds irregularly received were recovered from the relevant parties. Non-compliance of localisation should be addressed by reviewing legislation and strengthening measures to promote and enforce local content requirements.

The Committee considered the Fifth Parliament Legacy Report on Trade and Industry. Key points included industrial development, trade and exports, trading relations, and broadening participation in localisation. Facilitating improved coordination across Committees and departments was important where there were cross-cutting issues. The report noted that complications arose when an entity was shared with another Ministry. It was noted that government should give B-BBEE more teeth to deal with false claims of B-BBEE compliance. The lack of adherence to transformation and the principles of B-BBEE was one of the biggest stumbling blocks in the economy. The report advised that all legislation for Trade and Industry should be reviewed to root out any anachronisms but also to ensure that advancements, new systems and methods of working be included in relevant legislation. The report touched on the need to be ready to engage with the Fourth Industrial Revolution. The report referred to the inadequacy of resources for some Committees and the unequal amount of work for staff in the different Committees, depending on the obligations of a Committee.

Meeting report

Opening remarks
The Chairperson welcomed Members of the Committee and the team from the Department of Trade and Industry: Director-General Mr Lionel October, Deputy Director-General (DDG) for International Trade and Economic Development Division, Ms Xolelwa Mlumbi-Peter, Acting Group Chief Operating Officer, Ms Nontombi Matomela, the Industrial Development Policy and Strategy Advisor in the Office of the Director-General, Dr Nimrod Zalk and Ms Niki Kruger, Chief Director: Trade Negotiations.

Update on the negotiations of a rollover Economic Partnership Agreement (EPA) between the Southern African Customs Union Members States (SACU), Mozambique and the United Kingdom (UK)
Mr October said he had indicated a week or two previously that the agreement was almost in place. Cabinet and the President had been informed of the current status over the weekend.

SACU, Mozambican and UK Ministers would meet jointly on Friday 15 March 2019 to discuss, and possibly, conclude the treaty. On 12 March 2019, the UK Parliament had rejected the current agreement between the European Union (EU) and the UK; on 13 March 2019 the UK Parliament would vote on whether the UK would leave the EU without an agreement; on 14 March 2019, the UK Parliament would vote on whether to ask for an extension of the exit period under Article 50. If the EU agreed to an extension, the UK would remain part of the EU for the further period agreed with the other EU member states. The period of voting meant that by Friday 15 March 2019, the negotiating teams would have a better understanding of how Brexit was playing out.

The presentation contained some of the options that were available. There was concurrence between the parties on a bridging agreement which would be in place for six months and would carry forward the current arrangements, should the EPA not be signed in time for Parliament to ratify it.

Mr October believed that all bases had been covered but he hoped for a permanent agreement as that would offer slightly better opportunities for South African products.

Ms Mlumbi-Peter briefed the Committee on the background and current situation concerning the trade agreement with the UK. The negotiating team was looking for continuity in the trading agreement but also more favourable conditions for agricultural products and countries of origin. At the moment, eSwatini could not export tinned peaches to the UK if the peaches came from SA, so eSwatini was importing peaches from Greece to can and export to the UK. Sanitary and Phyto-Sanitary requirements on the import of agricultural products were also under discussion.

A Memorandum of Understanding or Transitional Agreement would act as a bridging agreement if the UK left the EU on 29 March 2019 without an agreement. Such an agreement would not require parliamentary approval. The purposes of the Bridging Agreement would be to ensure continuity in trade between the parties by agreeing to continue to provide each other with the treatment agreed upon under the EU-SADC EPA the day before the agreement ceased to apply to the UK. The agreement would apply for a period of six months while the Rollover Agreement between SACU Members States, Mozambique and the UK was being finalised. That Agreement was particularly important in the light of the fact that the SA Parliament would not be able to approve any agreement after 20 March 2019. A draft had been developed and the UK was undertaking further domestic consultations on the instrument.

If the UK extended Article 50, that would provide more time to finalise the Rollover Agreement. The Ministerial meeting scheduled for 15 March 2019 would aim to resolve the outstanding issues to facilitate the conclusion of the Rollover Agreement and the MOU/Bridging Agreement, if necessary.

Discussion
Mr A Williams (ANC) thanked the DTI for the information. He asked whether the DTI was engaging with the EU in respect of the deal. He did not want SA to alienate its EU partners by making a deal with its soon-to-be former partner.

Mr D Macpherson (DA) asked if SA went into a rollover of the EPA, considering that SA had seen the abuse of non-tariff barriers to slow or stop the export of SA agricultural products, animal and fruit, how was it going to address those concerns that the agricultural unions had repeatedly raised as unfair. How was it going to be resolved with the UK going forward? If there was going to be a shifting of the goal posts with respect to those products under the guise of Phyto-Sanitary concerns, the country could run into problems.

He got the impression that SACU states and Mozambique had some domestic concerns that had to be settled before those states could take the agreement forward, but it would take a long time. The agreement was more important to SA, so would SA try to go it alone with a rollover agreement?

Mr S Mbuyane (ANC) understood that the EU rules prevented the UK from engaging in future trade agreement under Article 50. How would Article 50 impact on the signing of the agreement? In terms of SA exports to UK and possibly to EU, what was the situation in respect of rules of origin? What if SA, SACU and Mozambique ceased to benefit after the meeting on 15 March 2019.

Mr B Radebe (ANC) appreciated the agreement and the work done by DTI and the ministry for being proactive and avoiding a lacuna. SA was swimming in unchartered waters because it did not know what the British Parliament would decide. But SA had to be careful the EU that might want to change conditions for the country. Reciprocity was very important. If the UK wanted better conditions, SA also had to have better conditions. The UK was a significant trading partner with SA, but the negotiators had to take care because trade with the UK was very important. The UK was an important trading partner. Parliament, and the Portfolio Committee, was behind the negotiators.

The Chairperson stated that the negotiations seemed to have called on all the Department’s skills.

Mr October appreciated the support expressed by Mr Radebe. DTI had been busy with the treaty for two years and thought that it was in a good position. The first objective was continuity so that trade was not disrupted, and secondly, if the UK wanted better conditions, those had to be reciprocal. Those were the two principles underpinning its discussions.

He responded to the question of the EU from Mr Williams, explaining that the UK could not enter into a new agreement, hence the concept of a rollover. The UK was not entering into a new trade agreement, but would be continuing with the same agreement. The EU was aware of that.

Mr October explained to Mr Macpherson that currently exporters were certified by the EU to export to the EU and SA wanted to be able to continue using those same certificates for the near future. The Phyto-Sanitary agreements were important to allow the exporters to use the same certificates. The UK was generally less protectionist than the EU, especially because the UK was not a grower of products like oranges, etc.

Ms Mlumbi-Peters responded to Mr Williams’ question about the EU. She said that the negotiating team had met with the EU and the first Joint Council meeting with the EU had been on 19 and 20 February. The team had addressed the way in which the existing supply chains and cumulation would be affected. The moment the UK left the EU, SA would have to engage with the EU in a deeper discussion of the issue.

SA had raised concerns that the EU sometimes took Sanitary and Phyto-Sanitary (SPS) measures that made things very difficult, and expensive, for SA producers. The UK would look at SPS and might take a different approach. World Trade Organisation (WTO) rules said that an agreement could not be trade restrictive but be appropriate to deal with any risks, so it was likely that the agreement would be on better terms.

The SACU had been well-co-ordinated in the discussions and issues raised by South Africa had been shared by SACU and Mozambique and any concerns were shared by all. There were no disagreements or internal concerns apart from those on the negotiating table. The two issues were cumulation and SPS but there was an in-principle agreement that needed only UK Ministerial confirmation. The negotiating teams were moving together in the spirit of ensuring that all the SACU countries and Mozambique protected their exports while ensuring that the regional interests were protected.

Ms Mlumbi-Peters explained to Mr Mbuyane that Article 50 said that the UK could not negotiate new agreements or terms, but it could negotiate rollover agreements, and the UK had 40 such agreements worldwide. Once the UK had exited the EU and was no longer bound by the EU Treaty, the UK would be able to negotiate new terms. The meeting on 15 March 2019 was an attempt to ensure rollover and to protect the interests of South Africa and the region.

Ms Mlumbi-Peters informed Mr Radebe that the SA negotiators were taking a long-term view as they engaged with the UK. They were looking at the long-term agreements that they wanted to conclude with the UK, but reciprocity was a fundamental principle in all of their trade negotiations.

The Chairperson stated that it appeared that all Members understood the status of the negotiations and that the UK was still conducting processes in the UK Parliament. The negotiations would result in the continuation of trade with both the EU and the UK and did not leave SA worse off than it was at the present time.

The Chairperson made it clear that Parliament was meeting for the last time on 20 March 2019. It would not be called back so that had to be made very clear at the negotiations on 15 March 2019. If the Agreement was not ready the following week, then it could, of course, take it to the Sixth Parliament.

Mr Macpherson asked the DG whether a rollover agreement would have to approved by Parliament as it was not a new agreement but a continuation of a previous one.

Mr October stated that constitutionally a rollover agreement would have to go to Parliament. If the Ministers reached agreement on Friday, the DG would come to Parliament on Monday to ask the Committee to take it to the House. However, if a bridging agreement was accepted that could be finalised through a Presidential Minute.

The Chairperson appreciated the work of the negotiating team, including the donkey work done by Ms Kruger. She extended her appreciation to the DG and his Department as well if he did not appear before the Committee again. She thanked the DG for his support and co-operation throughout the Fifth Parliament.

Minutes
Minutes of 5 March 2019: the adoption of the minutes, with no amendments, was proposed by Mr Williams and seconded by Mr Radebe.

Minutes of 6 March 2019: the adoption of the minutes, with no amendments, was proposed by Ms Mantashe and seconded by Mr Williams.

Matters arising: 5 March 2019
One of the resolutions taken was that other departments should be included in the value chain, i.e. the Department of Economic Development, the Department of Transport and the South African Bureau of Standards (SABS).
Outstanding responses were to have been submitted by 11 March 2019. As they had not been submitted, the Chairperson asked the Department’s Parliamentary Liaison Officer (PLO), Ms Soraj Naidoo, to follow up.
A further resolution was that inter-departmental co-operation should be highlighted, and insisted on in the future.

Matters arising: 6 March 2019
Resolutions taken:
- that SABS should partner with other entities such as Proudly South Africa to ensure that the SABS mark regains its status as a mark of quality and that the SABS report on Eskom should be submitted as soon as it was finalised – that had to be followed up by Ms Matomela, the Acting Group COO.
- that SABS should submit report on localisation on 8 March 2019. The Chairperson had not received it, but the PLO stated that it had been submitted.
- that the DTI should review the situation of the B-BBEE Commission where National Treasury had not yet accepted that the B-BBEE Commission was an independent body. Ms Matomela, the Acting Group COO, could follow it up as she had been in the meeting.

The Chairperson asked the PLO to follow up in instances where documents had not been received.

Consideration of the Interim Report on Localisation
The Chairperson referred the Committee to the Interim Report of the Portfolio Committee on Trade and Industry on factors impacting on localisation and local public procurement. The Committee should be familiar with the report as earlier drafts had been distributed to Committee Members. She asked Dr Zalk to assist in reviewing the draft report before the Committee.

The Chairperson explained that the report would explain that, given the shortage of time available to the Fifth Parliament, the Committee had documented the progress made in respect of localisation for the matter to go forward to the Sixth Parliament.

A number of issues were critically important: Administrative prices were proving a concern. The Committee would be holding a joint meeting the following week with the Finance Committee regarding illicit financial flows. The report presented a recommendation regarding legislative and regulatory measures that would reinforce the Industrial Policy Action Plan (IPAP). The Committee was asking for ministries and inter-ministerial committees to ensure the harmonisation of legislation. The socio-economic assessment study on credit had to be completed. The Committee had been tracking decisions taken by the inter-ministerial committees and whether they had been implemented. Ms Bridget Radebe had commented that the government had adopted the strategic mineral investment policy and the DTI had clarified that the designation of strategic minerals had been clarified in the latest Bill on minerals. The Committee had learnt the importance of tracking legislation that been legislated by other departments and impacted on Trade and Industry. It was a lesson to be taken forward to the Sixth Parliament: Do not legislate if implementation was not possible. She noted that the last meeting with PRASA had been positive.

The Chairperson stated that the conclusion had to refer to the collaboration required from three spheres of government for successful implementation. National Treasury had said that Regulation 8 provided for DTI to make designations in respect of local procurement and DTI had made those designations. National Treasury noted that service providers experienced challenges in meeting stipulated requirements for local procurement and the Preferential Procurement Policy Framework Act provided for exemptions. That matter had been addressed by DTI. The challenge was that the PPPFA did not provide an adequately robust remedy. An amendment of the PPPFA was called for. A tender could be suspended for 10 years but DTI wanted ways in which service providers could be assisted to meet obligations.

The Chairperson noted that the bid specification had to include the required localisation and the winning bidder had to meet the minimum threshold. She was pleased to be able to include the expansion of the Auditor-General’s audit to determine whether those measures had been met. There had previously been a question about whether the monitoring measures were adequate. That was a weak area that had been strengthened.

Bus manufacturing challenges were highlighted. The PRASA “rolling fabrications” had continued for a few years and the board and executive had been very creative with the stories that they rolled over but PRASA had not fooled the Committee and eventually facts confirmed was that the Committee was right all along. The report would indicate that the Committee would hand over findings on PRASA to the Zondo Commission.

The Chairperson addressed the conclusions. The Committee was concerned that little progress had been made in addressing administered prices, but that matter would be incorporated in IPAP. The Committee appreciated that the Auditor-General had agreed to take on more work to monitor localisation.

There had been an increase in non-compliance with localisation and the Committee needed to find out why. There was a fine line between how much legislation could address matters on the one hand and, on the other hand, make it impossible for businesses to operate. The Committee wanted to grow businesses and not close them down. One could not always hit, hit, hit. What would one do when the business was dead and no longer producing anything? Encouragement and support was also needed. The new Committee had to address that issue.

The Chairperson turned to the recommendations. One recommendation was engaging the Minister of Finance and all other relevant Ministers to clarify the timing of and funding model of production requirements.
What other recommendations could the Committee make that could encourage business and industry to work with the Department on the localisation policy.

Mr Macpherson noted that only he and the Chairperson had made it through from the beginning to the end of the term. That might qualify them to be the ranking Members of the Committee.

The Chairperson noted that Mr Radebe and Mr Williams had been in previous Committee.

Mr Macpherson said that he was making a light-hearted comment. His proposed recommendation was that it had to be a requirement of law that every contract entered into by the State should include penalties for non-compliance with the Preferential Public Procurement Framework Act, including local content requirements.

He pointed out that that was why Transnet had been able to wriggle out. A second recommendation would be for Transnet to cancel contracts that did not meet the requirements, where legally possible. He knew that Mr Radebe did not support that recommendation but hoped to persuade him.

Mr Williams suggested that bearing in mind the Fourth Industrial Revolution (4IR), the Committee should encourage local businesses to work more effectively together on the 4IR. It was something new that should be encouraged. In five years’ time it would be the norm.

Mr Radebe expressed concern about the imperatives of B-BBEE. Whatever deals were done had to be informed by the B-BBEE policy.

The Chairperson referred to the resolution in the report on penalties for non-compliance, contracts to be re-negotiate to regularise, etc. That was in the section under Transnet but should also be included as a broader recommendation.

Mr Macpherson stated that a recommendation had to flow from a conclusion.

The Chairperson stated that she wanted the recommendation to be broader than transport.

Mr Radebe added that if it was found, after a contract had been completed, there had been a flouting of the contract and no localisation had taken place, there had to be a recovery of funds.

The Chairperson agreed that irregular contracts, where legally possible, should be cancelled and the funds irregularly received should be recovered from the relevant parties. She reminded Members that it was only a recommendation. There were four recommendations that were read out by the Content Advisor, but the Chairperson indicated that the document would be finalised in a short tea break.

The Chairperson referred to the proposal regarding the 4IR. It should not be a recommendation but maybe included in conclusions. The Chairperson referred to the conclusions.

Mr Williams asked to withdraw his proposal regarding Fourth Industrial Revolution. It would be more relevant in the Legacy Report.

The Chairperson noted that the Committee’s greatest achievement was getting the Auditor General to audit the compliance of localisation. The Chairperson wanted to use encouragement and enforcement of localisation.

Ms P Mantashe (ANC) noted that the Committee was not an enforcement agency.

The Chairperson agreed and that was why localisation had to be monitored and the Auditor General’s inclusion of localisation in the audits was very important. What about verification of localisation of supply before signing the contract? That was an important issue that would have to be decided. How could it be done practically? The report had to be tabled for discussion in the House that day.

The Chairperson announced a tea break to allow the staff to prepare the final version of the report.

The meeting resumed and printed copies of the conclusions and recommendations were handed to the Members. The Chairperson read through the conclusion and the recommendations:

Conclusions
Based on its deliberations, the Committee drew the following conclusions:

5.1 The Committee remained concerned that little progress had been made in addressing high administered prices given the impact of these on economic growth and employment sustainability. The Committee welcomed the Department of Trade and Industry’s indication that administered prices would be incorporated into the next Industrial Policy Action Plan; however, the implementation of measures to address this would need to be monitored by the next Parliamentary Committee.

5.2 The Committee welcomed progress made in terms of the verification and auditing of local content requirements. It was, however, concerned with the findings of the Office of the Auditor-General, which highlighted an increase in non-compliance. Notwithstanding, the legal constraints to remedy non-compliance with local content requirements, it urged the Department and the National Treasury to address non-compliance and to review the legislation to strengthen measures of promotion and enforcement.

5.3 The Committee welcomed the initial funding of the South African Bureau of Standards to enable it to create capacity to verify local content requirements. However, there is a need to establish a norm regarding the ongoing funding of local content verification and to determine the most appropriate time to test whether the supplied goods meet the local content declared by a supplier and the minimum local content threshold set.
Individual government departments and entities should ensure that their supply chain management policies reflect the relevant elements set out in the Preferential Public Procurement Framework Act, such as local content, and Broad-Based Black Economic Empowerment requirements. Subsequent to this, these factors are incorporated from the procurement planning phase through the tender process to the delivery of the required goods and services.
While local content requirements are critical, there is a need to also factor in black economic empowerment imperatives when adjudicating tenders, to ensure transformation.

The Committee was of the view that where there were irregular contracts entered into by the State, apart from implementing Section 14 of the Preferential Procurement Regulations to terminate contracts, there should also be an effort to recover funds from concerned parties. Where it is impossible to cancel a contract, just and equitable measures should be considered to ensure compliance.

Recommendations
Informed by its deliberations, the Committee recommends that the House requests that the Minister of Trade and Industry should consider:
7.1 Engaging the Minister of Finance and all relevant Ministers to determine the funding model for the South African Bureau of Standards’ verification of local content and production, as well as the timing thereof.
7.2 In consultation with the relevant Ministers, stipulating that every contract entered into by the State should include penalties for non-compliance with the Preferential Public Procurement Framework Act including local content and Broad-Based Black Economic Empowerment requirements.
7.3 Engaging with the Ministers responsible for State-Owned Enterprises to ensure that irregular contracts, where legally possible, should be cancelled and the funds irregularly received are recovered from the relevant parties.
7.4 In consultation with the Minister of Finance, addressing non-compliance by reviewing legislation and strengthening measures to promote and enforce local content requirements.

Resolution
Ms Mantashe proposed the adoption of the Interim Report of the Portfolio Committee on Trade and Industry on factors impacting on localisation and local public procurement. The proposal was seconded by Mr Williams. There were no objections. The Committee adopted the localisation report.

The Chairperson asked where the report spoke about referring the findings regarding localisation in the PRASA train contracts to the Zondo Commission. It had previously been agreed to in the Committee deliberations but seemed to have been overlooked in writing up the conclusions.

Ms Mantashe remembered that it had been agreed to include it in the report.

The Chairperson asked if Committee Members would agree to adding that point to the conclusions. It would be remiss not to include that point in the conclusions. She suggested adding to the conclusions:
“The Committee would refer the allegations of irregularities within the Transnet 1064 locomotive contracts to the Zondo Commission.”

Resolution
Ms Mantashe proposed the inclusion of the point about referring the Transnet contract to the Zondo Commission in the conclusion. Her proposal was seconded by Mr Radebe. There were no objections. The Committee agreed.

Legacy Report
The Chairperson stated that the Legacy Report was taken from the Committee Reports at the end of each quarter and each year, so it was really a collation of reports and not new information, but she asked Members to look closely at the key areas for future work.

The Chairperson referred to key points: industrial development, trade and exports, trading relations, broadening participation in localisation.

Mr Williams reminded the Committee that the B-BBEE Commission had requested support to implement its policies. He suggested that government should give B-BBEE more teeth to deal with false claims of B-BBEE compliance. The lack of adherence to transformation and the principles of B-BBEE had been one of the biggest stumbling blocks.

The Chairperson agreed to put the B-BBEE matter under Transformation. She noted that public participation was limited to Committee Bills and not private Members Bills and that needed to be looked at. The Parliamentary Rules allowed a Portfolio Committee to hold a closed meeting. Should the same rule not apply to sub-committees when needed? The Committee agreed.

The Chairperson added that facilitating improved coordination was important where there were cross-cutting issues. In the past, a lot more joint Committee meetings had been held, but she was not sure if it would be necessary to have so many joint meetings in the next Parliament when departments would have been rationalised. She did think that it was important to recommend joint briefings with NCOP by the Department in an effort to limit the travelling that had to be undertaken by senior officials. She suggested that all legislation should be reviewed to ensure that there were no anachronism as had been found, by sheer chance, in the sugar legislation.

Ms Mantashe asked about the tea industry which experienced similar issues to the sugar industry.

Ms Matomela said the comment that the ICT system must be reviewed, as indicated on page 22, was intended to be a review of the National Regulator for Compulsory Specifications ICT system. It was amended.

Mr Macpherson asked about legislation that had not been finalised by the Committee or had been done but not completely, for example, the online Gambling Bill had been rejected but now seemed to be embraced by everyone concerned. How could the Committee recommend that online gambling be addressed in the Sixth Parliament or even by the Department?

The Chairperson noted that systems had improved over the years, including the ability to monitor so as to avoid money laundering through online gambling. The National Central Electronic Monitoring System (NCEMS) would assist in monitoring. The Bill had been turned down at the time because remote gambling could have been used for illicit flows of money.

Mr Radebe reminded the Chairperson that the Committee had decided to acknowledge that all legislation could be reviewed and that the Gambling Act would be included as part of reviewing all legislation.

The Chairperson responded that was not so much about which Bills had been passed, but what had been left out of the legislation.

Mr Macpherson stated that it was not possible for the Committee to review all legislation. If the Committee was giving direction, it should suggest a review of the Gambling Act and the National Credit Act. A legacy report had to say where the current Committee had got to and suggest that the new Committee could pick it up. It was not compulsory for the new Committee to do as recommended.

The Chairperson stated that the Content Advisor had pointed out that the points raised by Mr Macpherson were included in the relevant specific areas. It was necessary to review all legislation of DTI -related Bills to ensure that there were no anachronisms or if new systems should be addressed.

Mr Macpherson said that no one had explained exactly why the Committee could not make specific references to issues that were unresolved. He did not think that it was possible to review all legislation, especially as there were 14 entities under DTI which also had their own legislation. Certain things had been left short and he could not understand why anyone would be afraid of saying that there were specific issues that should be attended to.

The Chairperson said that the point on reviewing the legislation looking at what had changed in the system, which related to the NCEMS.

Mr Macpherson said that NCEMS had nothing to do with online gambling, so he did not understand why everyone was referring to it. The Chairperson had made the point about departments and Committees being re-structured in the Sixth Parliament. If Committees were to be different and maybe two or three Committees came together, new Committee Members would have to look at two or three legacy reports. Where would the Committees begin if the legislation from several departments had to be reviewed? That was why it was important to be specific. No one had told him why it was not good to point out where there was legislation that had not been finalised.

The Chairperson said that that every Committee had had a list of things that it had wanted to address but it had not addressed liquor legislation and the legislation on gambling had not effectively addressed all aspects of gambling. All that the Committee had done, if the NCOP accepted the Gambling Bill, was to address good governance via MINMEC. The Committee had facilitated new legislation.

Mr Radebe concurred. The Committee could not over-prescribe what the new Committee should do. The point of elections was that the new Parliament would take a fresh look at what was necessary. The gambling issue had been well covered. The suggestion to review all Trade and Industry legislation sufficed.

The Chairperson noted that the report included delays by the Department in respect of legislation as well as the quality of some pieces of legislation. Oversight visits were included. She noted the shortcomings with ITAC but there were complications when an entity was shared with another Ministry, such as sugar industry, and the dumping of chickens. ITAC and tariffs fell under the Minister of Economic Development.

The Chairperson referred to the point on closed sub-Committee meetings. The current regulations did not allow sub-Committee meetings to be closed.

Mr Williams said that Sub-Committees should not be allowed to have closed meetings, especially as the Sub-Committees did not make decisions but merely made recommendations to the Committee.

Ms Matomela referred the Committee to pages 71 and 71 where the response did not correspond to the recommendation. It was amended.

The Chairperson referred to the fact the Fourth Parliament had worked with task teams while the Fifth Parliament had procedurally correct Sub-Committees. Some stakeholders did not want to speak freely in front of a Committee but were prepared to engage with Sub-Committees with greater frankness. It could be a confidential matter, such as tariffs.

Mr Williams was concerned that a Sub-Committee did not have any power and so what came to the sub-Committee was not the same as what came to Committees. Sub-committees did not have any power. The sub-Committee that he chaired tried to iron out differences between political parties. They were not in-camera meetings.

The Chairperson stated that Sub-Committees had operated to date without such power, so she suggested that it be left out.

The Chairperson noted that the report referred to the High-Level Panel Report and oversight visits. The report referred to the configurations of Committees and that some Committees that did only 20% of the work of the Trade and Industry Committee received the same resources. The resources needed to be more aligned to the work of a Committee. Staff were concerned about the volume of work and being unfairly burdensome in some Committees. She also suggested that new staff should be given a practical test on writing minutes, using the computer and knowing policy. Parliament had to indicate the specific dictionary that was to be used in Parliament.

Mr Mbuyane stated that it was helpful to note that Committees would be more efficient if parties returned 50% of Members to Committees where they had served.

The Chairperson noted a reference to supporting black service providers.

Ms Mantashe stated that the reference to black service providers was not in line with policy.

The Chairperson agreed that the reference should be to new B-BBEE service providers requiring support. There were laws on the statute books that had not been implemented. Legislation could not be amended when something was not implemented.

Mr Radebe asked that the report state that mechanisms had to be put into place to ensure the protection of data, particularly in respect of gambling data.

The Chairperson stated that the recommendation had to include the alignment of resources. The staff would clean up the report as per the deliberation.

Mr Radebe asked that the staff check that where reports referred to the misconduct of officials, unless the matter had been finalised, the report should refer to allegations of misconduct.

The Chairperson put the report to the Committee.

Resolution
Adoption of the Legacy Report on Trade and Industry: Mr Mbuyane proposed the adoption of the Portfolio Committee Legacy Report with all the amendments made. His proposal was seconded by Mr Williams. There were no objections. The Committee adopted the Legacy Report.

Interim report to the Programming Committee on the possible trade agreement
The Chairperson returned to the matter of the trade agreement being negotiated with the UK. She stated that all Members had access to the international media and knew what was happening in respect of Brexit. SA could not be left out on a limb as the EU/UK agreement would come to an end at some stage. She read out a request to the Programming Committee to ensure that if the Agreement was signed on the 15 March 2019, it could be tabled in the House:

The Minister intended to table a rollover Economic Partnership Agreement (EPA) between the Southern African Customs Union Members States (SACU), Mozambique and the United Kingdom (UK) to avoid disruption should the UK leave the EU. The Committee therefore requests that, once it is tabled, the House considers the said Agreement before Parliament rises.

The Chairperson explained to the Committee that the last Programming Committee meeting would take place the following day. She knew that all parties wanted to know what was going to be presented in the House and so the agreement was that all matters would be presented to the Programming Committee the following day. She asked the Committee Secretary to explain what actions he had taken in that regard.

The Committee Secretary stated that he had spoken to the Table staff and that the request for the Agreement to be included in the Announcements, Tablings and Committee Reports (ATC’d) would be presented to the Programming Committee and if the Agreement were signed on the 15th, it would be ATC’s on Monday 18 March 2019 and presented in the House before it rose. If the Agreement was not signed, it would not be ATC’d and there would not be a presentation on the matter. Parliament would probably adopt it on 20 March 2019.

The Chairperson asked if there were any objections to taking the action.

There were no objections and Ms Mantashe proposed the adoption of the report. Mr Williams seconded the proposal. The Chairperson confirmed that there were no objections.

Closing remarks
The Chairperson informed the Committee that the House would be holding an early plenary on 19 March 2019. The Committee would have to have a final but very brief meeting to approve the minutes of the day’s meeting and there would be a joint Committee meeting with the Portfolio Committee on Finance on 20 March 2019.

The meeting was adjourned.

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