National Small Enterprise Amendment Bill: Legal Services Input & Public Participation Report

Meeting report

Report of the Portfolio Committee On Small Business Development Public Hearings on the National Small Enterprise Amendment Bill [B16 – 2023] In all Provinces From 26 October to 23 November 2023, as well as in Parliament On 28 November 2023

Mr Sibusiso Gumede, Committee Content Advisor, presented a 20-page long report on public participation during the Committee's meetings to obtain countrywide feedback on the Small Enterprise Amendment Bill, which had been introduced by the Minister and approved by Cabinet in June 2023.

He said the purpose of this Bill would be:

• To amend the National Small Enterprise Act, 1996, to amend, delete, insert and substitute certain definitions;
• to provide for the report of the Advisory Body;
• to provide for the establishment of the Small Enterprise Development Finance Agency;
• to provide for the functions of the Agency;
• to ensure the provision of financial and non-financial support services to small enterprises;
• to promote the development of sustainable and responsible cooperative banking;
• to provide for the establishment of the Office of the Small Enterprise Ombud Service;
• to enable an equitable trading environment for small enterprises through the provision of affordable and effective access to justice;
• to empower the Minister to declare certain practices in relation to small enterprises to be prohibited as unfair trading practices;
• to provide for the transitional arrangements necessitated by the establishment of the Agency;
• to effect consequential or necessary amendments to the Cooperative Banks Act, 2007, and to the Cooperatives Act, 2005; and
• to provide for matters connected therewith.

A majority of the public that participated were in favour of the approval of the Bill. Issues raised were the demand for stricter penalties for non-compliance with National Treasury regulations, such as the 30-day payment system by departments to service providers. Failure to comply with this would have to result in any interest payable to service providers being recovered from the salaries of director generals (DGs) and heads of departments (HODs). Another issue was the business restriction of red tape – suggestions to ease up on business administration were made.

(See report https://pmg.org.za/tabled-committee-report/5613/ )

Discussion

The Chairperson thanked Mr Gumede for the presentation, and said she was glad that a bill was finally in place to regulate business practices and hold entities accountable. She raised concern over the lack of human and financial resources in Parliament.

Mr J de Villiers (DA) said that he needed more time to peruse the report, and reserved any opposition to it. He asked to be excused from the meeting.

Mr F Jacobs (ANC) said the report accurately reflected the Committee’s work on the road for the past three to four weeks, and commended the report for covering substantive issues.

He asked that clauses whereby consensus was reached be overlooked so that the clause-by-clause debate would focus only on the issues that still needed to be deliberated on. Several issues needed deliberation, such as:

• Provincial composition.
• Inputs from cooperatives.
• Determination of unfair trading practices.

Approval of this Bill was owed to emerging entrepreneurs, and improvement by government would not be fast-paced, but slow and steady and every change would be appreciated.

Mr Jacobs was satisfied with the report, as it had been accurately presented and displayed the public participation of over 5 000 people countrywide.

Mr H Kruger (DA) encountered network issues, and thus delivered his comments via written input. His recommendation was that red tape be reduced to ease business practice.

Mr Jacobs moved for the adoption of the report, and was seconded by Mr E Myeni (ANC).

Constitutional and Legal Services Office presentation

Ms Telana Halley-Starkey, Parliamentary Legal Advisor, said the Constitutional and Legal Services Office (CLSO) had considered the written and oral submissions on the Bill received by the Committee, as well as the Department of Small Business Development’s (DSBD's) responses to the submissions, as presented to the Committee on 29 November.

The purpose of this presentation was to address only the legal and constitutional issues raised in these submissions. Policy issues had been left to the Executive, who had adequately addressed them in the previous Committee meeting.

Constitutional and interpretation issues raised in the Bill pertained to the following general comments:

• Public participation was lacking -- there had been a short commenting period and not enough time to prepare for the hearings.
• The Bill was not referred to the National Economic Development and Labour Council (NEDLAC).

The issues identified in clauses of the Bill were highlighted and discussed, and legal responses were provided for clarification. The interpretation issues stemmed mostly from vagueness and incoherence in the wording of the Bill, which made way for constitutional malpractice by businesses.

(See attached document)

Discussion

Mr Jacobs disputed the CLSO’s general comment about the limited period leading to a lack of public participation. In his opinion, public participation had been a success, despite being done over a short period of time. He commended the legal responses and updated definitions. He asked if there was a recommendation to deal with issues around good governance. He asked for clarity regarding the boards’ annual assessment plans and the regulations, and why nothing had been said regarding provincial and regional representation.

Ms Halley-Starkey said outlining context and intention when giving definitions was important. She asked the Department’s drafters to provide clarity, but they were absent despite receiving notice of the meeting. She clarified that the provincial and regional representation was the duty of the Department. The Committee was also at liberty to amend the aspect of legislation that addressed annual assessments from the boards.

Mr Jacobs stated that he had previously recommended that the Department always be present in Committee meetings, to avoid such situations whereby they were required to give immediate responses, but were absent.

The Chairperson agreed with Mr Jacobs.

The Chairperson was happy with the amended Bill’s specifications and outlining everyone’s duty. The CLSO’s legal responses were appreciated.

In closing, she asked that Committee Members familiarise themselves with the clauses discussed, as the debate that evening would be based on them.

The meeting was adjourned.