SA Abattoir Corporation Act Repeal Bill: briefing

Meeting report

AGRICULTURE PORTFOLIO COMMITTEE
14 June 2005
SA ABATTOIR CORPORATION ACT REPEAL BILL: BRIEFING

Chairperson

South African Abattoir Corporation Act Repeal Bill [B21-2005]
Department presentation on SA Abattoir Corporation Act Repeal Bill

SUMMARY
The Department of Agriculture briefed the Committee on the SA Abattoir Corporation Act Repeal Bill. The purpose of the Bill was the abolishment of the Corporation and provision for the incorporation of the SA Abattoir Corporation into a Public Company. Members concerns surrounded the liquidation of Abakor, and the need to help emerging farmers to market their produce amid deregulation of the meat industry. They wanted to know which Parliamentary committee had been exercising oversight over the parastatal. They asked reasons why the Committee had not been not furnished with financial statements of the liquidated Abakor.

MINUTES

Department briefing
Mr Lufumo Makhoshi (Department Legal Officer) explained that Abakor had been established as a public company in terms of the South African Abattoir Corporation Act of 1992, to provide slaughtering and processing services and to market offal. Having operated in a protected environment, Abakor's financial viability had been drastically affected by the commercialisation and deregulation of the meat industry. The company was liquidated on 30 October 2000.

The South African Abattoir Corporation Act had come into effect on 10 July 1992. Its purpose was to abolish the Abattoir Commission and provide for the incorporation of the South African Abattoir Corporation as a public company and the disposal of company shares held by the State. Pursuant to the Act, the South African Abattoir Corporation (Abakor) was registered and incorporated into a public company. All the assets, liabilities, rights and obligations of the Corporation, had passed on to Abakor, with the State as the only shareholder. The directors of Abakor could only alter the share capital with the approval of the Ministers of Agriculture and Finance.

Abakor had not managed to pay its debts to a number of creditors, including the Meat Board (which later became known as the Meat Industry Trust). This had resulted in liquidation proceedings in the High Court. The final liquidation and distribution account was confirmed on 11 December 2003. This was announced in Government Gazette No 25906 of 16 January 2004. The liquidation process had now been finalised. The South African Abattoir Corporation Act had become obsolete as a result of Abakor being liquidated. Therefore the Act needed be repealed.

Discussion
Dr E Schoeman (ANC) enquired reason why the financial records of the Abattoir Corporation had not been forwarded to the Committee. He wanted to know the amount owed to the Meat Board

Mr Makhoshi replied that the amount was R50 million. Since the liquidation process was already finished, he had felt there was no need to furnish the Committee with those details. The financial statements would be forwarded to the Committee in due course.

Ms B Ntuli (ANC) wanted clarity on the Transvaal Division - was it still called by the same name? Mr Makhoshi replied that the Transvaal division was now called the Northern Province division.

The Chairperson asked which Committee was exercising oversight for abattoirs because all public entities had to account to Committees.

Mr Ngema asked the original purpose of the entity. He enquired whether the abattoir could no longer serve its purpose.

Dr Schoeman felt that legal experts couldn't answer such financial questions. He asked whether the State had been responsible for the liquidation of Abakor.

Mr Makhoshi replied that the purpose of liquidating the entity was to incorporate the utility into a public company. It had been liquidated because it was financially insolvent. The Meat Safety Act was meant to regulate abattoirs.

Mr A Nel said that the meat industry had been regulated by the previous government, and then the democratic government had deregulated the industry. After deregulation, the abattoir had been indebted.

Mr Ramphele suggested that the Committee discuss ways of helping emerging farmers to market their produce, as deregulation would have a negative impact on them.

Mr D Dlali proposed the repeal of the Act. Mr Ditshetelo and Mr Nel seconded the motion, and the Bill was unanimously adopted.

The Chairperson then announced that the debate on food price monitoring had been postponed until a later date. The draft report on the Committee’s Gauteng visit would be dealt with in the week of 22 June.

Mr J Boltina, Committee Secretary, briefed Members on preparations for the farewell diner for the former Committee Chairperson on 14 June 2005.

The meeting was adjourned.