National Small Business Amendment Bill: adoption

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
10 November 2004
NATIONAL SMALL BUSINESS AMENDMENT BILL: ADOPTION

Chairperson:

COSATU submission on the National Small Business Amendment Bill 2004
National Small Business Amendment Bill [B23-2004]
Committee Amendments to National Small Business Amendment Bill [B23A – 2004]

SUMMARY
The Committee considered COSATU’s proposed amendments to the National Small Business Amendment Bill. After much discussion, the Committee decided to propose its own amendments to the clauses that were eventually accepted. The Department took the Committee through the Bill clause by clause, highlighting those amendments that had already been agreed to. The Bill was adopted as amended.

MINUTES
The Chairperson proposed that the Committee consider the proposed amendments submitted by the COSATU the day before. The amendments proposed were as follows:

Clause 10(1) (c) (vi) - Functions of the Agency
"facilitate , develop, co-ordinate and foster partnerships across all spheres of government, [and] the private sector and other stakeholders that include trade unions and co-operatives, NGOs and CBOs, that may assist the Agency to achieve its objectives;

Mr M Stephen (UDM) said that Professor B Turok (ANC) had expressed reservations about the sub-clause. He felt that it would make sense to adopt the proposed amendment by COSATU.

Dr E Nkem-Abonta (DA) noted that it was not necessary to place a positive duty on the CEO of the Agency to consult each of the organisations listed by the proposed amendment. It would be more practical for the CEO to conclude agreements with the listed organisations. He felt that the list was too specific as well.

The Chairperson proposed replacing the underlined insertion by COSATU with, "and all relevant stakeholders", so as to not exclude anyone.

Mr J Strydom (Department of Justice) in his capacity as advisor to the Department assented to the Chairperson’s proposal. A male representative from the Department said that the Chairperson’s proposal would make it obligatory for the Agency to foster relationships with stakeholders. The Committee agreed.

The sub-clause would now read:
"facilitate, develop, co-ordinate and foster partnerships across all spheres of government, the private sector and all relevant stakeholders that may assist the Agency to achieve its objectives."

Clause 9A (b) - Objectives of the Agency
"promote a service delivery network that increases the contribution of small enterprises to the South African economy, and promote job creation and the alleviation of poverty and inequality."

Mr Stephen once again proposed the acceptance of the COSATU proposal.

A female representative from the Department said that job creation was acceptable but she was sceptical about the inclusion of a provision making specific mention of poverty alleviation. Her male counterpart noted that the sub-clause set out a qualification for the agency to meet its objectives.

Mr L Labuschagne (DA) felt that the provision should remain as it was in the Bill.

Ms F Mahomed (ANC) asked why the Department felt the inclusion of a provision calling for job creation, but not poverty alleviation was acceptable.

The female Department representative pointed out that the core objectives of the Department were job creation, growth and equality. The point was that the Department did not want to necessarily extend the list of objectives.

Dr Nkem-Abonta said that job creation was a by-product of opening up a business. He felt it not to be an objective of any business.

Mr J Maake agreed with Mr Labuschagne that the provision should remain as it was in the Bill. He repeated that it was merely a qualification for the Agency.

A female Member of the ANC noted that she was in favour of the COSATU proposal assuming that job creation was its aim.

Mr S Rasmeni (ANC) agreed with the female Member and said that job creation would lead to the alleviation of poverty in any event.

Ms Mahomed said that the inclusion of a provision on job creation would be acceptable.

Dr Nkem–Abonta stated that job creation in itself was not good enough. He felt that SA needed to adopt a culture of entrepreneurship.

The Chairperson felt that the Committee’s discussion was going around in circles. He said that since there was agreement that job creation would alleviate poverty, he proposed that the core objective of the Department, such as job creation, growth and equality be inserted into the sub-clause. It would thus replace the underlined insertion proposed by COSATU.

The female Department representative noted that the issue of equality was dealt with in another Act. She however said that the inclusion of job creation and growth would be relevant.

Mr Rasmeni disagreed and said that the Act dealt with issues of equality. He pointed out that supporting small business would encompass a certain measure of equity.

The Chairperson reiterated his proposal and asked Mr Strydom if the proposal was acceptable. Mr Strydom gave his nod of approval. The Committee agreed to the proposed amendment. The sub-clause would now read: "promote a service delivery network that increases the contribution of small enterprises to the South African economy, and promote job creation, growth and equality."

Mr Strydom proceeded to take the Committee through the Bill clause by clause noting the amendments that had already been agreed upon. Clauses 13(C) and 16(B) prompted a fair amount of discussion.

Clause 13(C) – Termination of appointment of members of Board.
Mr Strydom explained that the amendment had freed up the hands of the Minister. Prior to the amendment the Minister could only on the recommendation of the Board terminate the appointment of a member. With the amendment the Minister may in consultation with the Board terminate the appointment of a member.

Mr Dr Nkem-Abonta asked if it was wise to place so much power in the hands of the Minister. He said that the power of the Board would be watered down by the amendment. Dr Nkem-Abonta said that the original provision still allowed the Minister the discretion to turn down the recommendation of the Board. He thus felt that there was no need for an amendment.

Mr Strydom said that in its original form the provision did not allow the Minister to terminate an appointment made by itself without the recommendation of the Board.

Dr M Sefularo (ANC) noted that boards in SA tended to get carried away with their powers. Self preservation was often placed above all else. He felt it correct that the Minister was to have the final say. He proposed that the amendment be accepted. Ms Mahomed supported the proposal. Mr Stephen agreed that the amendment did not place too much power in the hands of the Minister. The Chairperson felt the proposed amendment to be acceptable and it was agreed.

Clause 16 (B) – Limitation of liability
Mr Strydom said that it was highly unlikely that the clause would survive the test of its constitutionality against Section 34 of the Constitution. Indemnity clauses of the sort were remnants from pieces of legislation dating back to the apartheid era. He proposed that the clause be deleted. The Committee agreed.

The Chairperson placed the Bill before the Committee and it was adopted as amended.

The meeting was adjourned.