Consumer and Corporate Regulation Programme: DTIC briefing

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

07 June 2022
Chairperson: Mr M Rayi (ANC, Eastern Cape) & Mr M Dangor (ANC, Gauteng)
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Meeting Summary

The Department of Trade, Industry and Competition (DTIC) briefed the Committee in a virtual meeting on the role and mandate of the Consumer and Corporate Regulation Programme in its 2022/23 annual performance plan. This included the status of the Companies Amendment Bill, the Companies Amendment Bill on Corporate Governance for worker participation in boards, the Liquor Amendment Bill and the National Gambling Amendment Bill.

Some of the Members were unhappy with the presentation, saying the Department of painting a “rosy picture” of the work done under the programme, particularly concerning the National Gambling Amendment Bill. The Department apologised if the presentation had come across this way. The purpose of their presentation was to share the role and mandate of the programme, and they anticipated that any concerns would be addressed in questions asked by Members.

Meeting report

The Chairperson welcomed the Members and the Department. He informed them that he would be leaving early and Mr M Dangor (ANC, Gauteng) would be Acting Chair once he left.

Committee minutes

The Committee adopted the minutes of its meetings on 22 March, 19 April, and 4, 10, 17, 18, 24 and 31 May.

In-person meetings

Mr J Londt (DA, Western Cape) asked the Chairperson when their meetings would be held in-person. The Committee rooms and the Marks Building were in a working condition. The sound system still needed to be fixed in the National Council of Provinces (NCOP), but at some stage, they needed to move back to having in-person meetings.

The Chairperson agreed that technical issues prevented them from returning to in-person meetings, such as the microphones and the sound system. They were now going into their constituency period, and their last day would be from 24 June until 1 August. He assumed that during this break, these issues would be sorted out.

Mr T Brauteseth (DA, KZN) said that the issues with the sound were in the House. Mr Londt was referring to the meeting rooms in the Marks Building. He implored the Chairperson to advise the Chief Whips that the Marks Building was ready. Even if there were issues with microphones, the rooms were small enough that the Members would be able to hear each other speak.

The Chairperson said that when it came to the Committee rooms, it would be on a first-come-first-served basis because there were fewer functioning meeting rooms now. They would follow up on this issue.

Mr Dangor said that the issue of broadcasting in the Marks Building had also been raised before. The broadcasting facilities were not up to scratch, which also needed to be looked at. These technical issues needed to be sorted out as soon as possible. They were supposed to receive a report at the end of the week about resolving all technical issues. They would be able to decide on a physical return then.

Consumer and Corporate Regulation Programme: DTIC briefing

Mr Shabeer Khan, Acting Director-General, Department of Trade, Industry and Competition (DTIC), said that their presentation would cover the work of the Consumer and Corporate Regulation Division. This division played an important role in the development of a number of policies and legislation. The key objective was to provide a business regulatory environment that was fair, competitive and allowed for efficient markets.

Dr Shandokane Masotja, Deputy Director General (DDG): Consumer and Corporate Regulation Division, gave the presentation.

Some of the main objectives of Programme Five were:

-To increase access to economic opportunities for small businesses and previously disadvantaged citizens;

-To develop efficient regulation to reduce the regulatory burden on business and to increase confidence and certainty in South African business regulation;

-To create a business regulatory environment that provides competitive, fair and efficient markets.

Important policies and legislation under the Consumer and Corporate Regulation Division included the Companies Act 2008, the Liquor Act 2003, the Lotteries Act 1997 and the National Gambling Act 2004.

The Companies Amendment Bill, and the Companies Amendment Bill on Corporate Governance for worker participation in boards, would be submitted for the consideration of Cabinet and introduced to Parliament in the 2022/23 financial year.

The Liquor Amendment Bill had been finalised for public comment after Cabinet approval in 2016. After the start of the pandemic, the DTIC realised that the Bill in its current state was not efficient. It is currently being reviewed and an intergovernmental approach had been adopted.

The National Gambling Amendment Bill was introduced to Parliament in 2018. One of the key amendments was to provide for the establishment of the National Gambling Regulator. The Bill was not voted favourably by the majority of the provinces, and it is currently in the mediation process in Parliament.

(Please see presentation for more details).


Mr Londt said that the Department portrayed a “very rosy picture.” The National Gambling Amendment Bill had been presented to the Committee, and there were reservations about it across party lines. The Bill had been sent back. The Department was “arrogant” in presenting the Members with the exact same Bill in the presentation. It was a positive thing that parties had done what was best for the provinces by rejecting that Bill, and it boded well for the future of the NCOP. It was concerning that there was no introspection portrayed about this Bill. Valid comments and criticisms from Members had been ignored and not implemented, which was why it ended up in mediation. There was a “complete and utter arrogance and disregard” for what the Members had said. It was the same for the National Lottery Commission (NLC). The problems with the Commission, and what the Department was doing to address that, had not been mentioned. It did not help to lack honesty about the challenges and how they were being addressed.

Mr M Mmoiemang (ANC, Northern Cape) asked about the 2019 issues of the National Lottery Commission (NLC). The Department had said they were going to conduct an impact assessment on implementing the Lotteries Act to ensure that the NLC was functioning according to government requirements, keeping in mind the issues that the media had raised about this Commission. What was the progress with this?

He agreed with Mr Londt about the National Gambling Amendment Bill, but they needed to be mindful that it was at the mediation stage.

In 2018, there were issues around the implementation of the amendment to the Liquor Act. They needed to finalise the amendment process for the Act to ensure that the National Liquor Authority could be more efficient. How far along was this process? The amendment to the 2008 Companies Act was designed to align the Act with international corporate trends. Had an assessment been done with regards to this? What was the progress in this process?

A key challenge was driving communities' capacity building on the regulatory governance framework. This would include corporate governance training that targeted women and people in rural communities. What was the progress on this? How was the Department going to balance protecting consumers and making business simpler and more efficient? In light of the Consumer and Corporate Regulation Programme, what was the Department’s take on the current issued investment strategy by the Presidency?

The Acting Chairperson asked how accessible the National Credit Regulator was to the public. Was it through the provinces? Was there any intent to regulate the debt collectors' industry? It seemed that when these individuals and companies were dealing with the public, they did not abide by fair practices or existing laws. Was there any intent to regularise micro-lenders and the exorbitant interest rates they were charging?

DTIC's response

Dr Masotja said that the presentation had focused on the mandate of Programme 5. The developments in the presentation were not meant to paint a rosy picture and were included only to indicate the progress of the various projects and amendments. The fact that the Bill was in mediation was clear enough that there were concerns from the Committee. This was acknowledged. They could have highlighted this better, but that was not the presentation's focus. The intention was not to ignore the issues. The NLC had been presented as an entity of the Department, and its functions and role had been shared. The Department figured that any concerns about the NLC would be addressed in Members' questions.

The regulatory impact assessment had been conducted on the National Lotteries Act. The Department had an assessment that they were planning to take forward, which would help them develop new regulatory legislation that addressed some of the concerns raised in implementing the Act since it was amended in 2013. There had been issues identified in the distributing agencies and other enforcement issues. The Department would respond in writing to the question about media mechanisms. It was a wider Departmental process that went beyond her branch. The Consumer and Corporate Regulation Division had not come up with any media mechanisms, but it was something that they could look into.

The concerns around the National Gambling Amendment Bill had been noted, and it was still in the mediation process. It was true that challenges had been raised about it, such as the issue around the National Gambling Policy Council. If there was no quorum, those present in the meeting could decide. Some provinces were not happy with that approach, even though sometimes Members cancelled or were not available for meetings.

The extension of the national central monitoring system was also an issue. Members had argued that it should not only be at a national level and that the provinces also had a role to play. There was also an issue around having a new regulator instead of a board, and provinces did not agree with having one individual as a regulator. These issues affected the Bill, which was why it was in a mediation process.

Regarding the implementation of the Liquor Amendment Bill, it was supposed to be finalised and tabled, but it is currently under review by the Department. When they looked at the magnitude of the societal challenges of alcohol abuse and binge drinking, they felt a need for further engagement with the Bill to see how it could be strengthened. The Bill needed to have a strong impact and they wanted to ensure this by reviewing it.

The issue of the NLA and improving its deficiencies were noted. There was work being done to improve its automation. The draft amendment bill looked at methods to strengthen the National Liquor Policy Council. The National Gambling Policy Council had similar issues regarding the quorum and decision-making – when issues needed to be discussed, not all of the necessary decision-makers attended. It affected its effectiveness. Part of the amendment was to look at the governance of that.

The Companies Amendment Bill processes were underway. The plan was to have Cabinet and Parliament consider it. A regulatory impact assessment had been developed for the Companies Amendment Bill. It looked at certain provisions of the Act and tried to identify the challenges and policy options to inform the next legislative processes. A larger review of the Act was also anticipated.

Educational awareness was very important, especially in the provinces. The DTIC had been very active in the past. The entities and Department had gone into the rural communities and spread awareness about legislative issues and the work of the entities. This work will be continued going forward.

The DTIC would respond to the question of the investment strategy of the President in writing. They supported the Presidency's work, and they would look at how their legislation impacted investment.

The issue of debt collectors fell under the Department of Justice. The DTIC had had discussions around micro-lending and the legislation surrounding that.

Ms Nthupang Magolego, Senior Legal Adviser, National Credit Regulator (NCR), said that the National Credit Act had prescribed the maximum fees, including interest, which all creditors must charge consumers. Any micro-lender charging consumers very high interest rates were breaking the law. The NCR must continue to strengthen its enforcement activities to ensure that any micro-lenders who did so were punished and redress was given to consumers. The only NCR office was in Gauteng. They had tried to address the topic of accessibility by partnering with various provincial consumer protection bodies that had become the NCR’s provincial access offices.

Mr Khan said that the DTIC had a branch which dealt primarily with the investment mandate of the Department. That branch was InvestSA. That branch's key focus was improving the ease of doing business and the investment climate. That was predominantly how the Department supported the Presidential investment strategy and target. The branch worked with the World Bank and aimed to improve the regulatory processes, such as improving the time it took for a company to become registered.

Similarly, a lot of work was done with the provinces and municipalities around water permits and licences. This was continuous work between the Department and the number of stakeholders within the state. The Department did this to foster a business environment that attracted investment.

Concerning the National Lottery Commission, a key factor in the annual performance plan was improving governance and developing a capable state. They would be launching an anti-corruption unit and learning from the investigations done by the Special Investigating Unit (SIU).

The meeting was adjourned.

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