Department of Transport on National Ports Authority Bill: briefing

NCOP Public Services

16 September 2003
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Meeting report

SELECT COMMITTEE ON PUBLIC SERVICES

PUBLIC SERVICES SELECT COMMITTEE
17 September 2003
DEPARTMENT OF TRANSPORT ON NATIONAL PORTS AUTHORITY BILL: BRIEFING


Chairperson: Ms P C P Majodina (ANC)

Documents handed out:
Department of Transport Powerpoint Presentation to National Council of Provinces
National Ports Authority Bill Powerpoint Presentation
National Ports Authority Bill (B5-2003)
National Ports Authority Bill 27July 2003 Working document # 2
National Ports Authority Bill (B5-2003), Working Document #3

SUMMARY
Department of Transport briefed the Committee on the National Ports Authority Bill, as a follow-up on the briefing on National Ports Policy. Institutional arrangements for managing and running the ports were covered, and the National Ports Authority Bill was worked through almost clause by clause. The areas which the Committee members had singled out at the previous meeting concerning infrastructure development and linkages with local authorities around ports, quotas on Black empowerment, and security and safety matters were given special attention. Committee members were unhappy that they were brought into the process at such a late stage. They felt that the Provinces had vital interests affected by the Bill, and were not prepared to be rushed into accepting it.

MINUTES
The Chair referred to the meeting on 10 September 2003, when the Committee was briefed on the National Ports Policy which provided background understanding of the National Ports Authority Bill. She expressed concerns about the involvement of the Department of Public Enterprises and the Department of Transport, because in her experience similar arrangements had invariably led to delays and an unwillingness to take responsibility and accept accountability. Some board members were to be appointed by the Minister of Transport, but would not be accountable to him.

The role of the South African Defence Force SANDF in ports was not clear.
The ports were the domain of whites only, and it needed to be clarified whether there were to be clear quotas for previously disadvantaged people, and also women and children. Black empowerment was vitally important. It was important that infrastructure around the ports would be adequate and she asked for clarity on how the local governments would link up.

She was unhappy with the fact that the Committee was only brought into the process a week before, apparently only to obtain their approval of the Bill. It was unacceptable that they were steam-rolled just for that purpose. She felt that Provinces had to be consulted to arrive at a balanced outcome.

Department of Transport
Ms Khibi Mabuse-Manana (NDoT Acting Senior Manager Transport Policy and Regulation) presented her Department's response to the issues raised.
She explained the institutional arrangements concerning the respective roles in the ports environment of the two involved departments (Public Enterprises and Transport) and five other bodies (National Ports Authority, S A Maritime Safety Authority, National Ports Forum, Ports Consultative Committees and Independent Ports Regulator) covered by the Bill.

The National Department of Transport (NDoT) had as a core function sole responsibility to develop, maintain, review, update, monitor, and evaluate the implementation of the ports policy as well as the regulating framework. The NDoT was responsible for appointing members for the Board of the Ports Regulator, who would be accountable to the Minister of Transport. Likewise the NDoT would appoint the members of the National Ports Forum, which would also be accountable to the Minister of Transport. The NDoT would also appoint a Port Consultative Committee for each port, which included two persons representing the local and provincial governments respectively. The NDoT also had to appoint the National Port Consultative Committee and its own representative on this body.

Department of Public Enterprises
The Department of Public Enterprises would facilitate the concessioning of ports and develop guidelines on concession strategy together with the NDoT.
The Minister of Public Enterprises, being the shareholding minister of the NPA, would appoint the members of the Board of the NPA, who would then report to and be responsible to him. This had been a very contentious issue and eventually a deadlock at the level of the officials of the two departments occurred which had finally to be referred to the respective Ministers for a decision. The Department of Public Enterprises, being the landlord of the ports, would be responsible for development of infrastructure, utilities, traffic control, aids to navigation and concessioning of ports operations, and for overseeing the provision of operational services such as terminals.

Rev M Chabaku (A N C) objected to having to submit to an unacceptable overloading of information, and proposed that opportunity were rather given for questioning and answering.

The Chair ruled that the presenters continue their response to the questions raised the previous week, and that afterwards there would be opportunity for more questioning.

South African Maritime Safety Authority; National Ports Forum; Independent Ports Regulator
Ms Mabuse-Manana continued in summarizing the functions of the three bodies in the ports environment not covered fully by her before.
SAMSA (South African Maritime Safety Authority) would, through the Bill, be entrusted with the additional functions of certification and licensing of pilots and setting of standards.
The National Ports Forum, whose members were appointed by the Minister of Transport, advised the Minister on port issues. Whereas SAMSA was to be responsible for safety regulation, the Independent Ports Regulator's sphere of activity would be the economic regulation, which meant that it had to ensure that quality services were provided, would act as a platform for complaints and handle issues around monopolies in conjunction with the Competition Commission. What remained were the other concerns which had been expressed at the previous meeting on policy and articulated by the Chair, concerning infrastructure development in and around ports, Black empowerment and port security.

Industrial Development Plan; Integrated Transport Plan; Port Master Plan
Mr Mawethu Vilana (NDoT Manager: Freight Transport Policy Development) summarized the linkage between the individual ports and the local authorities' IDP (Integrated Development Plan) through three interacting planning exercises; the Industrial Development Plan, Integrated Transport Plan and Port Master Plan.

Ms Mabuse-Manana explained that, apart from the existing procurement policy of Transnet, there would be a clear Black economic empowerment strategy for the maritime environment with clear targets of skills development, procurement, equity, control and ownership eg. a minimum of 30% equity ownership as well as the allotments for women and the disabled. They had not given thought to youth in this context.

Port security, it was felt, was not the responsibility of either SAPO or the NPA, but should really be left to the South African Police Services. There were specific requirements of the International Maritime Organization regarding security. The Cabinet had set up a security unit to provide security services to harbours, airports and the borders, and pilot projects were envisaged, of which the one for the Durban container terminal had already started.

Mr Dumisani Ntuli (NDoT Director: Maritime Transport) reported that an interdisciplinary Maritime Security Advisory Committee had been set up which had to advise the Minister on the international port and ship security code adopted by the International Maritime Organization, of which South Africa was a member. The committee was made up of all departments and agencies which had a responsibility for security.

New measures covered issues such as the security of ships that sailed through South African oceans and also port facilities, and stemmed from the September 11 incidents in the United States. The International Maritime Organization took steps because it was felt in the whole world that ships could be used as instruments to launch attacks.

Discussion
Rev Chabaku (ANC) voiced frustration at the vast overloading of the Committee members by all this information dumped on them. The liberal use of acronyms totally unknown to her was irksome. Another concern for her was that various centres such as Western Cape, Durban and even Mid-Rand had hearings but not the Free State, while she felt that the ports were the concern of the whole country, including the Free State, and would like to be assured that all the provinces had representation. She was disappointed at the insensitive use of male instead of neutral terminology in the Bill.

Dr E A Conroy (NNP) asked for a diagram which would clearly show the interrelationships of the plethora of statutory bodies with their acronyms. He asked why SAMSA apparently had difficulty in persuading the owners of the recently stranded Sealand Express to divulge the nature of their cargo. He cited the situation in the United Kingdom where one department, and ultimately one person was responsible for launching appropriate action in a maritime emergency situation.

Ms B Thompson (ANC) wondered whether Black economic empowerment was really going to work in this instance. Her experience was that more often than not a policy was in place but nothing actually happened and ordinary people did not benefit at all.

The Chair enquired which minister appointed the members of the Ports Consultative Committees, and whether private security companies were to maintain security inside the port areas while the Defence Force and the Police were responsible in the rest of the country.

Rev Chabaku was adament that opportunities for women must be opened up as had been done in the army and navy, such as in training, development and employment. She was in favour of social programs like the ones which the fishing industry were doing, which benefitted society and not just individuals.

The Chair brought up the plight of casual labour who were employed while their names and particulars were not even known in cases when death occurred.

Ms B Thompson requested that the Department take the Committee along with them when they implement programs so that they could monitor and give feedback to their constituencies.

Ms Mabuse-Manana expressed her Department's willingness to work closely with the Committee and to transmit this request to her Director-General.

Mr Ntuli stated that maritime security impacted on one who is contracted to work in ports. The fishing industry, where there was a culture of not wearing life jackets, had been promoting safety. Marine coastal management had a working group which had been running road shows to foster a safety culture. There were regulations for fishing companies to appoint safety officers, to provide lighter vests, and to conduct safety drills. The problem was mostly on smaller vessels.

Mr Vilana said that a revised scheme or something totally new were envisaged to enable labour off the streets to negotiate to become port employees. He invited Committee members to attend a workshop on this issue in Durban, for all the provinces, on 9 and 10 October 2003.
He felt that a balance was required between on the one hand the abuse by employers of offering less than living wages and on the other hand pricing themselves out of contention for contracts.

Ms Mawetu-Manana declared that for empowerment of Blacks, women and youth TETA (Transport Education and Training Authority) had different strategies in working with the different racial groupings.
As for port security, different levels were catered for. At the port of entry the SA Police Service operated. In the ports themselves the NPA as landlord had to develop suitable security, and at the terminals SAPO or the concessionaires would deploy their own resources,such as. in the form of private companies.

Mr Ntuli mentioned the international security code which provided for assessment and development of security plans.

Mr M A Sulliman (ANC) asked whether copies of the Bill which were handed out to the Committee (B 5B-2003) was the amended version which was submitted to the National Assembly.

Ms Mabuse-Manana answered that there had been substantial changes that derived from the public hearings followed by revision by the State Law Advisor, but that the Committee had been issued with the amended version.

Mr Ntuli explained that Midrand was just the venue for one of the provincial workshops and that the Free State was indeed represented there. The process was still at a stage where independent input by the Committee could be incorporated. The intention was to work towards finalizing the Bill before the end of the year.

Ms Mabuse-Manana explained that the coverage of the Bill by Mr Ntuli, which was to follow, was just for the purpose of providing Committee members with clear insight into what the Bill was.

Mr Ntuli explained that for all state-owned enterprises the Minister of Public Enterprises had to be the share-holding minister, and the ports were state-owned enterprises.

He asked members to give close attention to the objects of the Act as set out in Clause 2, which, after having been translated into law, would not just gather dust. Ports handled 90% of exports and it was vital that knowledge was gleaned from others. Recent cases of congestion in the port of Durban and delays in other ports had to be addressed. The present situation where Transnet as landlord both owned and operated the ports was not ideal. Under the Bill's provisions the NPA would exercise landlord functions and operation could be undertaken by Transnet's division SAPO (South African Ports Operations) or by a concessionaire, as for example, the Durban terminal.

It was stressed that the government was sensitive to the importance to Transnet of the profits at present generated by the ports. This issue would be handled with circumspection and was one reason why Transnet was given three years to effect the transition.

Ports were an important national asset and the country could not afford them being privatized - they had to be state-owned enterprises owned by a public company with one shareholder, the Minister of Public Enterprises.
It was important that all eight ports would fall under the jurisdiction of the National Ports Authority.

The time had come to reverse the situation where the historically disadvantaged persons, were excluded from taking part in ports operations. The position of youth had not been given much attention.
The NPA had to be guided by the principle of furthering the national interest.
The NPA had to, in the spirit of NEPAD, conduct business in the rest of Africa, consistent with the Act.

It was important that small and medium-sized businesses owned by historically disadvantaged people were given opportunities.
An important function of the Ports Regulator was to ensure equity of access to the ports and port services.

The Bill prohibited corruption by members of the secretariat of the Regulator.
The Regulator was funded only by Parliament, not donations, again to eliminate the possibility of corruption. The Regulator had far-reaching powers to handle complaints in a creative manner. The White Paper for the Bill originally provided for an interim regulator. The Bill now provided for an ongoing Regulator who would, upon winding up, cease to operate.
The Authority could concession activities or enter into partnerships as required.

In order for transitional comfort and stability the Bill provided that long-term leases that existed could not be abruptly terminated. A case in point would be for off-shore cargo handling facilities.

Land uses in ports which were unrelated to port activities or where long-term leases were unrealistically low or that excluded Black people under the Group Areas Act would have to be renegotiated with full reasons givenPorts planning and development would have to be part of the relevant IDP for that area. Giving up the ports would create current challenges for Transnet in its commercial activities.

Safety aspects were important. Pilotage was compulsory in all South African ports and there was a queuing system. In line with international practice responsibility remained with ship owners. The South African Maritime Safety Authority (SAMSA) played an important role.

The Minister of Transport could stipulate a percentage for the economic participation of historically disadvantaged people in port activities.
The National Port Consultative Committee advised the Minister on ports matters.

The Chair thanked Mr Ntuli for the excellent exposition. She wondered why the NPA Board members served for only three years and the members of the Regulator for five years.

Mr Ntuli explained that, with the NPA there was a lot at stake, and five years would be too long, whereas in the case of the Regulator, who had an oversight function, long-term continuity was required.

Ms Mabuse-Manana said that all other public enterprises boards had terms of three years. It afforded the Minister the opportunity to effect change.

Mr Sulliman contended that getting to grips with any position takes time, and suggested a mechanism being built into the Bill which would give the Minister the right to replace an unsuitable member.

Rev Chabaku agreed, because to internalize information and knowledge, and
re-educate people took time. She commended the presenters for being good teachers.

Mr M I Makoela (ANC) thought that five years was too long and a system of staggered rotation would work better.

Ms Thompson asked what was going to happen to Transnet and what was their attitude to the loss of the ports.

Mr Sulliman mentioned that the revenue base of Transnet was going to be drastically affected.

Rev Moatshe felt that people who apply for becoming Board members would already have expertise and experience, and thus three years would be good for their term of office.

Mr Sulliman wondered why the Shareholding Minister (of Public Enterprises) appointed the members of the Board after consultation with the Minister of Transport and not in consultation with the Minister (Clause 14(1) of the Bill).

Adv Cindy Dube (Department of Transport) explained that the Shareholding Minister must have the power to appoint people he felt comfortable with.

Mr Ntuli expanded by pointing out that the whole process for replacing a member had to work, and that the actions of the Share-holding Minister had to be in balance with the rights of the Minister of Transport.

Ms Mabuse-Manana pointed out that areas of competence required from members to be appointed included those that were specifically Transport related. Every board appointment had to go through Cabinet.

Mr Sulliman was reassured, and asked whether the Committee would have a role in these matters or just be informed.

Mr Ntuli explained that the Minister had the standard prerogative to make regulations which were published for comment, and did not go the Parliament route.

Mr Sulliman disagreed, and sited the example of the Department of Water Affairs. He asked for another meeting because in his opinion the Committee could not adopt the Bill then and there.

The Chair stressed that the Bill had an impact on the provinces, who had to be briefed on the Bill. She asked when it was envisaged to have the process completed.

Mr Ntuli answered that they were aiming for the end of the year.

Dr Conroy asked that a diagram setting out all the involved bodies and organizations be faxed through to members.

The Chair recognized the members from the fishing industry who sat in on the meeting and invited them to submit their concerns in writing, also to the Department of Transport.

Mr C A R Bross (Secretary of the South African Deep-sea Trawling Industry Association) confirmed that they were port users and had valid concerns.

The meeting was adjourned.

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