INSETA, TETA, THETA, PAETA & SETASA Sector Education &Training Authority Annual Reports: briefings

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Employment and Labour

18 October 2005
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Meeting report

LABOUR PORTFOLIO COMMITTEE
19 October 2005
INSETA, TETA, THETA, PAETA AND SETASA SECTOR EDUCATION AND TRAINING AUTHORITY ANNUAL REPORTS: BRIEFINGS

Chairperson:

Ms O Kasienyane (ANC)

Documents handed out:

INSETA 2004/05 Annual Report PowerPoint Presentation
INSETA 2004/05 Annual Report [see
www.inseta.org.za]
TETA 2004/05 Annual Report PowerPoint Presentation
TETA 2004/05 Annual Report
THETA 2004/05 Annual Report PowerPoint Presentation
THETA 2004/05 Annual Report:
Part1 & Part2
PAETA 2004/05 Annual Report PowerPoint Presentation
PAETA 2004/05 Annual Report
SETASA 2004/05 Annual Report PowerPoint Presentation
SETASA 2004/05 Annual Report [ see
www.setasa.co.za]

SUMMARY
The Insurance Sector Education and Training Authority (INSETA) provided an overview of the insurance sector, outlining its scare and critical skills, and the progress made towards achieving the National Skills Development Strategy (NSDS) targets of which most had been met. Its income from the Skills Development Levy was compared to its expenditure and it was noted that INSETA had received an unqualified report from the Auditor-General. One of the challenges it faced was ensuring that black men were retained in the insurance industry. In the ensuing discussion, Members asked about training programmes for black women; why it was difficult to track learnership graduates; was there a training programme for unemployed university graduates; why black men were leaving the insurance industry; programmes to educate communities about insurance policies; and whether there were delays in accrediting service providers.

The Tourism, Hospitality and Sport Education and Training Authority (THETA) outlined its achievements and the progress it had made in meeting the majority of its NSDS targets. THETA had fallen short of the target for learnerships for unemployed people as well as the target for the number of workers that needed to have NQF Level 1 qualifications. THETA had a total income of R 171 million and had spent R 158 million in 2004/05 - most of which had been spent on grants and projects. However, THETA had received a qualified report from the Auditor-General due to irregular expenditure and it had overspent its administration budget. The discussion centred on the following topics: progress in training people for the 2010 World Cup; if restructuring had affected its service delivery; its use of the Department’s labour centres for marketing purposes; skills development training for rural women; enrolment of young people in the coaching science and fitness leadership courses; training learners to become self-employed.

The Transport Education and Training Authority (TETA) delegation outlined the profile of the transport sector and its scare and critical skills. TETA had achieved most of the NSDS targets. TETA had received an income of R 252 540 000 in 2004/05 and had spent R 181 822 000. The majority of this had been spent on projects, mandatory grants, and discretionary grants. TETA had received an unqualified audit report from the Auditor-General. Challenges included meeting the skills demand that would be associated with the Gautrain Project and the 2010 World Cup and the challenge of HIV/AIDS in the transport sector. Questions included TETA's plans to establish regional offices; progress in transforming the transport sector; business management training programmes for taxi owners; implementing professional driving qualifications for taxi drivers; programmes to teach school learners and unemployed people how to drive; and whether disabled people were being employed in the maritime sub-sector.

The Primary Agricultural Education and Training Authority’s (PAETA) and the Secondary Agricultural Education and Training Authority’s (SETASA) had merged to form AgriSETA in July 2005. The AgriSETA delegation noted that PAETA had been responsible for skills development in the primary agricultural sector and it had met most NDSD targets, except for the number of workers that should have had NQF Level 1 qualifications. The delegation explained that it was impossible to meet this target as workers in the sector tended to have low education levels. In presenting PAETA ‘s 2004/05 financial statements, it was noted that it had an unqualified audit report from the Auditor-General.

AgriSETA provided an overview of the secondary agricultural sector and highlighted the progress that SETASA had made towards meeting most of the NSDS targets. SETASA had also received an unqualified audit report. The challenges that the AgriSETA was facing during 2005/06 were outlined. Members noted various challenges around transformation in the agricultural sector. They felt that AgriSETA needed to link skills development training with the land reform process. Members also asked why there was a decline in the number of permanent workers in the primary agricultural sector; what type of support AgriSETA offered small-scale farmers; and whether black youths were participating in commercial farming training programmes.

MINUTES

INSETA’s 2004/05 Annual Report: briefing
Mr M Abel (INSETA Chief Executive Officer) began by providing an overview of the insurance sector. The insurance sector was comprised of a number of sub-sectors, which included the reinsurance sub-sector; the short-term insurance sub-sector; the health care benefits sub-sector; the life insurance sub-sector; the pension fund sub-sector; and the collective investments sub-sector. The majority of companies in the insurance sector were small and medium sized enterprises (SMMEs). It was noted that white males still dominated top level management positions in the sector. Mr M Abel then outlined the scare and critical skills that were required by the insurance sector. Following this, he outlined INSETA’s organisational structure. INSETA had a number of regional offices, which were located in the Eastern Cape, the Western Cape, KwaZulu-Natal, Gauteng, and the Free State.

Mr Abel discussed the progress that INSETA had made towards meeting the NSDS targets, which were:
- To ensure that 70% of insurance sector workers had NQF Level 1 qualifications. It was noted that 70% of all employees already had at least NQF Level 1 qualifications. As a result, the INSETA had decided to undertake skills development amongst the small number of labourers that were employed in the insurance sector. INSETA had ensured that 512 labourers had received training, and that 285 had received Adult Basic Education and Training (ABET).
- To ensure that 15 % of employees in the insurance sector had embarked upon structured learning programmes. INSETA had bettered this target by ensuring that 25 829 insurance sector employees had embarked on structured learning programmes.
- To guarantee that at least 20 companies were committed to the Investor in People (IIP) Standard. INSETA had surpassed this target by ensuring that 62 companies had committed to the IIP Standard.
- To provide skills development grants to at least 75 % of large enterprises in the insurance sector. INSETA had bettered this target and 99% of large companies in the sector were receiving skills development grants.
- To provide skills development grants to 40% of the medium sized companies in the sector. Again, the INSETA had surpassed this target.
- To support 20% of small enterprises with skills development initiatives. There were 3 807 small enterprises in the insurance sector. Of these, 164 small companies had submitted Workplace Skills Plans (WSPs).
- To ensure that unemployed people were registered in learnerships. INSETA had registered 2 127 unemployed people in learnership. Of these, 524 had been placed in employment positions on completion of their learnerships.

Mr Abel discussed INSETA’s 2004/05 financial statements. He noted that INSETA had received a total income of R 153 524 000 in 2004/05: 80% of this income had been derived from the Skills Development Levy (SDL). In total, INSETA had spent R 134 737 000 in 2004/05. Most of this had been spent on grants and projects. INSETA had R 98 856 000 in cash or cash equivalents. However, INSETA’s current liabilities totalled R 62 705 000. He noted that INSETA had received an unqualified audit report from the Auditor-General. Mr Abel then outlined some of the challenges that INSETA would be facing during 2005/06. These included ensuring that graduates were placed in internships; upgrading educational qualifications; and ensuring that black men were retained in the insurance industry.

Discussion
The Chairperson asked whether INSETA offered a training programme for black women in the insurance sector. Ms L Moss (ANC) added that the skewed gender profile of the insurance sector needed to be addressed. Women needed to be trained to take up management positions. Mr Abel acknowledged that most management positions in the insurance sector were still occupied by white men. INSETA had, however, taken steps to address this. For example, it had a training programme for black women. This programme was aimed at providing women with the skills that were required for management positions. INSETA had also met with various insurance companies to address the gender imbalances in top-level management.

The Chairperson and Mr M Mzondeki (ANC) noted that there was a need for transformation in the insurance sector.

Mr O Mogale (ANC) noted that INSETA did not have offices in Mpumalanga, the North West, the Limpopo, and the Northern Cape provinces. He enquired how INSETA marketed itself in these provinces. Was the Department of Labour assisting INSETA to market itself in these provinces? Mr Abel responded that INSETA worked closely with the Department of Labour around marketing. Indeed, INSETA was marketing itself through the Department’s labour centres. However, INSETA had limited resources, which meant that it was a challenge to reach all the areas in South Africa. Nonetheless, INSETA did have an outreach project, which was responsible for educating rural school learners about the insurance sector. This included providing training to selected teachers at these schools, so that they could be involved in providing learners with ongoing education about the insurance sector.

The Chairperson asked for a list of the rural schools that INSETA had visited. Mr Abel answered that he would forward a list to the Committee.

Mr Mogale asked why it was difficult for INSETA to trace the people that had graduated from learnership programmes. Only 524 leanership graduates, out of 2 127 learnership graduates, had been placed in permanent employment positions. He asked whether the rest of these learnership graduates were unemployed. Mr Abel explained that companies were obliged to train people in learnerships; however, they were not obliged to employ them once the learnerships were complete. INSETA could not force companies to employ these learnership graduates. However, INSETA could suggest that learnership graduates should be given preference if vacancies became available at these companies. As a result, it was important to trace the learnership graduates. To the best of its ability, INSETA was tracking leanership graduates. However, it needed to improve its tracking system. As a result, it was examining a proposal to track people though the unemployment registry

Mr Mzondeki asked what initiatives INSETA had undertaken to train unemployed university graduates. Mr Abel replied that INSETA was examining the possibility of implementing a university graduate leanership programme. Graduates could be trained to fill middle management positions in the insurance sector. This could perhaps address the problem of transformation in the insurance sector.

Mr Mzondeki asked why so many black men were leaving the insurance industry. Mr Abel replied that black men were leaving the insurance industry for a number of reasons. Some black men were being placed under the mentorship of people that were perhaps not interested in transformation. They would then leave due to dissatisfaction. Some of the black men, who had left the industry, believed that their ex-employers only gave them menial assignments. Added to this, some black men left because companies, in other sectors, offered them more money. Competent black professionals were highly sought after, which made poaching a problem. Indeed, many black professionals were moving from company to company. The problem with such a situation was that these black professionals did not spend enough time at any one company to acquire comprehensive work skills. This in turn meant that they did not acquire management skills.

Mr Mzondeki enquired whether INSETA had programmes to educate communities about insurance policies. Many people took out insurance policies without understanding the clauses and conditions that were attached to them. Mr Abel responded that insurance companies had their own consumer education initiatives. However, these did not reach all of the sectors of society. In fact, some insurance brokers were not even fully trained. In order to address this issue, INSETA had met with a number of insurance companies around the need to educate low-income communities about insurance. INSETA was also providing training to insurance brokers so that they could provide their clients with the correct advice. In addition, INSETA was providing training to the trustees of retirement funds.

Mr Mzondeki noted that a number of Sector Education Training Authorities (SETAs) had experienced delays and problems with accrediting service providers. He enquired whether INSETA was experiencing a similar problem. Mr Abel replied that INSETA had not experienced any delays in accrediting service providers. Nonetheless, INSETA was careful about the service providers that it accredited. One needed to ensure that only quality service providers were accredited. Service providers needed to be interested in developing their learners. In addition, they had to be able to provide learners with theoretical and practical training. Mr Abel added that INSETA ensured that the providers it accredited had the capacity to deliver skills training.

Mr Mogale asked the delegation to provide a demographic breakdown of the service providers that INSETA had accredited over the past five years. Mr Abel replied that, due to historical reasons, most of its accredited service providers were white. Nonetheless, INSETA was assisting black service providers to become accredited.

Mr Mogale asked for a list of INSETA’s accredited service providers, which included their contact details. Mr Abel responded that he would forward a list of accredited service providers to the Committee. Nonetheless, there was a list of the accredited service providers on INSETA’s website.

Ms L Moss (ANC) observed that INSETA has stated that small companies made up 76 % of all companies in the insurance sector. She asked what the definition of a small company was. She noted that some larger companies would register smaller companies. These smaller companies would then receive benefits that were intended for genuine SMMEs. Mr Abel responded that the companies that had been recorded as small companies in the presentation were genuinely small organisations. He added that small organisations represented the future of the insurance sector. Indeed, small businesses represented one form of empowerment for black people. He added that there were many white owned small businesses, which were willing to become involved with black partners. Various organisations offered funding for such partnerships. This also represented a challenge for INSETA. INSETA needed to ensure that black people were provided with the skills that would allow them to take up these opportunities.

THETA’s 2004/05 Annual Report: briefing
Mr M Tsotetsi (THETA Chief Executive Officer) began by providing an overview of the sectors that THETA covered. These included the hospitality sector; the tourism sector; the sports, recreation and fitness sector; the conservation sector; and the gaming and lotteries sector. He noted that there was a total of 41 985 companies and 602 700 employees in these sectors. He then outlined the scare and critical skills that were required in these sectors.

Mr Tsotetsi highlighted some of THETA’s achievements. THETA had provided 12 991 certificates to people that had completed its accredited courses. Through its INTAC Project, THETA had provided training to 1 977 employed learners, 2 282 unemployed learners, 610 community leaders, and 136 start-up businesses. In addition, it had provided 6 142 unemployed learners and 2 901 employed learners with skills training through its TLP Project. THETA had also undertaken the South African Tourism Institute (SATI) Project. Through this Project, training in tourism was provided for 1 423 teachers and 1 009 SMMEs.

Mr Tsotetsi outlined the progress that THETA had made towards meeting the NSDS targets. He noted that THETA had bettered most of the NSDS targets, which included ensuring that 703 756 workers were on structured learning programmes; that 24 companies had committed to the IIP Standard; that 134 large companies were receiving grants; that 3 074 small companies were receiving support; and that 131 medium sized companies were receiving grants. However, THETA had fallen short of some of the NSDS targets. For example, it had not met the target for learnerships for unemployed people, and it had not met the target for the number of workers that needed to have NQF Level 1 qualifications.

Mr Tsotetsi discussed THETA’s 2004/05 financial statements. He stated that THETA had a total income of R 171 million in 2004/05. Most of its income had been received from the SDL and NSF. THETA had spent a total of R 158 million in 2004/05. Of this total, R 79.9 million had been spent on grants and projects. He added that THETA had R 199 million in cash or cash equivalents. However, THETA had committed R 97 million of this to projects. He noted that, unfortunately, THETA had received a qualified report from the Auditor-General. This was due to irregular expenditure: THETA had exceeded the 10 % threshold of its budget for administration expenses. THETA had taken steps to address this, which included restructuring the organisation to reduce staff costs. THETA had also received matters of emphasis from the Auditor-General, which were due to the non-payment of discretionary grants.

Mr Tsotetsi highlighted some of the challenges that THETA would be facing during 2005/06. These included a loss of levy income from some of the SMMEs; the need to reduce administration expenses; the need to provide accreditation; problems around public sector levy collection; and the need to undertake effective marketing and communication.

Discussion
The Chairperson asked whether the THETA was making progress in training people for the 2010 World Cup. Mr Tsotetsi acknowledged that training people for the 2010 World was a huge challenge. Nonetheless, THETA would be involved in training people to ensure that the event was a success. Furthermore, THETA was providing some funding to the South African Football Association (SAFA) for the 2010 World Cup.

Mr Mzondeki noted that THETA had restructured its organisation in order to reduce its administration costs. Part of this strategy included not filling the vacant posts that it had. He asked whether this would have an impact on THETA’s service delivery. Mr Tsotetsi replied that THETA could not continue to exceed the 10% threshold for administration costs. As a result, it had redesigned its organisational structure. Added to this, it was monitoring its administration expenses on a monthly basis to ensure that it did not exceed its administration budget. Nonetheless, he believed that restructuring THETA would not negatively impact on its performance or service delivery. He added that one of the reasons why THETA had exceeded its 10% threshold for administration expenses was due to the non-payment of levies by the public sector. This non-payment meant that THETA had received less income than it should have. Indeed, the Department of Environmental Affairs and Tourism had only started to pay its levy in 2004/05.

Mr Mzondeki enquired why THETA had been unable to efficiently pay out discretionary grants. Mr Tsotetsi replied that certain companies had not claimed discretionary grants, which meant that THETA had not paid them out. The Auditor-General, however, was concerned about this situation.

Mr Mzondeki observed that whites owned 85% of the companies in the hospitality sector. There seemed to be a resistance to transformation in the sector. This issue needed to be addressed. Mr Tsotetsi acknowledged that 85% of businesses in the hospitality were white owned. Nonetheless, the Department of Environmental Affairs and Tourism had taken steps to address this. For example, it had implemented the black economic empowerment (BEE) scorecard, the BEE council, and the Sector Charter.

Mr Mzondeki commented that many of the people that had graduated from the INTAC project had not found employment. He asked how THETA was addressing this problem. Was it offering any assistance to these people to find employment? Mr T Matjobe (THETA Learnership Manager) responded that THETA would be implementing a system to track learnership graduates. Once this was in place, the details of the INTAC graduates, and other learnership graduates, would be placed on THETA’s website. Prospective employers could then access the website and view these details. Furthermore, THETA would be working with employers and trade unions to ensure that learnership graduates were given priority when vacancies needed to be filled. Companies that had not managed to place any of their past learnership graduates would also not be allocated new leanership intakes. This was aimed at ensuring that companies placed the people that they trained.

Ms Moss asked whether THETA was providing ABET to people in the sports and recreation sector. Indeed, it was important that workers in all the sectors received ABET. Mr Tsotetsi responded that some companies were reluctant to release their employees for ABET programmes. In order to address this, THETA was providing grants to employers that offered their employees ABET.

Ms Moss commented that THETA needed to market itself through the Department’s labour centres. Mr Tsotetsi acknowledged that THETA had a limited marketing strategy. This was due to the fact that THETA had limited resources and had to prioritise its expenditure. Nonetheless, THETA had used the labour centres to market itself.

Ms Moss stated that rural women needed to be offered skills development training. THETA should be involved in training rural women to operate, and open, Bed and Breakfasts. Mr Tsotetsi responded that THETA viewed Bed and Breakfasts, and the whole of the tourism industry, as an important growth industry. People needed to be trained to provide quality services to tourists.

Ms Moss noted that there was only one labour centre in the West Coast region. In fact, there was only one skills development officer for the whole of the West Coast. She asked whether more of the Department’s staff could be deployed to the West Coast.

Mr B Mkongi (ANC) enquired how many young people had been enrolled in the coaching science and fitness leadership courses. He also enquired about the content of these courses. Mr Tsotetsi responded that THETA had developed a qualification framework for coaching. However, THETA had faced a number of challenges. For example, there were no accredited training providers that could offer coaching courses. In order to address this, THETA had started to train service providers so that they could offer coaching courses. THETA had also met with SAFA to ensure that they offered NQF aligned coaching training. A similar situation existed in terms of the fitness leadership course.

Mr Mkongi asked in which areas the coaching and fitness leadership courses were offered. Mr Matjobe noted that 150 people were attending the fitness learnership programme in the Western Cape. There were also 64 learners on fitness leadership courses in KwaZulu-Natal, 30 learners on these courses in the North West, and two learners on these courses in Gauteng.

Mr Mkongi stated that there was a tendency to train people to be workers. THETA perhaps needed to train people to become self-employed. Mr Tsotetsi responded that THETA did provide programmes for learners that wished to become self-employed.

Mr Mkongi enquired about the profile of THETA’s training providers. Mr Tsotetsi acknowledged that most of THETA’s training providers were white. THETA was working towards addressing this issue. Nonetheless, THETA had only fully accredited seven service providers. This was because THETA had a high standard, and would not fully accredit organisations that did not meet that standard.

Mr Mogale observed that since 2001, THETA had received qualified reports from the Auditor-General. He asked whether this situation would continue indefinitely.

TETA’s 2004/05 Annual Report: briefing
Dr P Bothma (TETA Chief Executive Officer) began by providing an overview of the transport sector. The sector had a total of 11 988 employers and 258 957 employees. It was noted that most of the sub-sectors in the transport industry, except the taxi sub-sector, were dominated by whites. Mr Bothma discussed the TETA’s structure. TETA was comprised of eight chambers, each representing a sub-sector of the transport industry. These chambers were: the Aerospace Chamber; the Forwarding and Clearing Chamber; the Freight Handling Chamber; the Maritime Chamber; the Rail Chamber; the Road Freight Chamber; the Road Passenger Chamber; and the Taxi Chamber. Following this, Mr Bothma discussed the scarce and critical skills that were required in all the sub-sectors of the transport industry.

Mr Bothma outlined the progress that TETA had made towards achieving the NSDS targets, which were:
- To develop a culture of life-long learning. In terms of this, TETA had exceeded the NSDS target of ensuring that 154 550 of workers in the transport sector had at least a NQF Level 1 qualification. TETA had also surpassed the NSDS target of ensuring that 50 000 workers had embarked on structured learning programmes. Indeed, 363 126 transport sector workers had embarked on structured learning programmes.
- To foster skills development in the formal economy for productivity and employment growth. TETA had surpassed the NSDS targets for providing skills development grants to both large and medium sized companies. TETA had also exceeded the NSDS targets for worker learnerships.
- To stimulate and support skills development in small businesses. The NSDS had specified that TETA needed to provide skills development support to 2 000 small companies. TETA had bettered this target and was providing support to 3 309 small businesses.
- To promote skills development for employability and sustainable livelihoods through social development initiatives. In terms of this, the NSDS had stipulated that TETA needed to ensure that 3000 workers from the taxi and small boat fishing industries embarked on structured learning programmes. TETA had surpassed this target. In fact, 4 183 taxi industry workers and 16 488 small boat fishing industry workers had embarked upon structured learning programmes.
- To assist new entrants into employment. In terms of this, the NSDS had stipulated that the TETA needed to register 3 500 unemployed people in learnerships. TETA had exceeded this target, and had registered 6 568 unemployed people in learnerships. It had also ensured that 85% of these people were placed into employment on completion of their learnerships.

Mr Bothma also outlined some of TETA’s other achievements, which included undertaking its SMME Project, undertaking its NSF Project, and implementing the IIP Standard.

Mr Bothma discussed TETA’s 2004/05 financial statements. He noted that TETA had an income of R 252 540 000 in 2004/05. Most of this income had been received from the SDL. TETA had spent a total of R 181 822 000 during 2004/05. The majority of this had been spent on projects, mandatory grants, and discretionary grants. TETA had R 372 092 000 in cash or cash equivalents. Nonetheless, TETA had committed R 304 611 678 to various projects. Mr Bothma added that TETA had received an unqualified report from the Auditor-General.

Mr Bothma highlighted some of the challenges that TETA would face between 2005 and 2008. These included ensuring that it offered high quality service delivery to its stakeholders; providing support to SMMEs; providing skills to people in preparation for the 2010 World Cup; meeting the skills demands that would be associated with the Gautrain Project; and addressing issues around HIV/AIDS.

Discussion
Mr Mzondeki asked whether TETA had plans to establish regional offices in the various provinces. Mr Bothma answered that TETA was examining the possibility of sharing offices with other SETAs in the various provinces. This was a cost effective way of having a presence in the various provinces.

Mr Mzondeki enquired whether progress was being made towards transforming the transport industry. Mr Bothma responded that TETA was committed to ensuring that transformation took place in the transport industry. It was providing management training courses to black people.

Mr Mzondeki enquired whether TETA offered a business management programme for taxi owners. Mr Bothma replied that TETA did have a programme for taxi owners. TETA had ensured that approximately 1 200 taxi owners had completed an accredited business administration course. In addition, a customer care course was being offered to taxi owners.

Mr Mkongi asked how many learners had completed learnerships in the aerospace sub-sector. Added to this, he asked the delegation to provide a demographic breakdown of these learners. Mr Bothma responded that the number of people that had participated in aerospace learnerships could be found in TETA’s Annual Report. Indeed, the Annual Report also provided a demographic breakdown of those learners.

A Member enquired how many black pilots had been trained through TETA’s programmes. Mr Bothma responded that TETA had funded the training of 11 black pilots.

Mr Mkongi asked whether the R 38 million of the NSF funding had been disbursed. Mr Bothma replied that TETA had disbursed approximately 90% of the R 38 million. There were, however, one or two areas of certification that had not been finalised. TETA was working with the service providers to ensure that these areas were finalised.

Mr Mogale asked whether TETA had started training cadets. He also enquired where these cadets were based. Added to this, he asked what criteria TETA had used to select these cadets.

Mr Mogale enquired whether TETA had considered implementing a professional qualification for taxi drivers. Mr Bothma acknowledged that there was a need for a professional driver’s qualification for taxi drivers.

Ms Moss asked whether TETA could organise a programme to teach school learners how to drive. Mr Bothma acknowledged that school learners should be provided with driver training. In fact, there were already some schools that were offering driving practice programmes to their learners. The transformation of the K53 into a unit standard based qualification would assist this process.

Mr Mogale asked whether TETA had a programme to provide driver’s license training to unemployed people. When people had driver’s licenses their prospects for employment improved. It was, therefore, vital that unemployed persons were provided with an opportunity to receive driver’s licenses. Mr Bothma stated that TETA needed to examine its budget before it could embark on such a programme. Nonetheless, TETA would try to source funding for such an initiative.

Mr Mogale asked for details on the support that TETA provided to SMMEs. Mr Bothma replied that TETA had committed R 3 million to projects to assist SMMEs. Added to this, TETA had decided to commit a further R 10 million, over and above the R 3 million, to provide support for SMMEs.

Mr Mogale asked whether TETA had a relationship with the Umsubomvu Youth Fund. Mr Bothma replied that TETA needed to improve its relationship with the Umsubomvu Youth Fund.

Mr Mzondeki enquired whether TETA had an outreach project to inform school learners about possible careers in the transport sector. Mr Bothma responded that TETA had undertaken a project at Simon’s Town High School around the maritime sector. In fact, a maritime learnership was included in this school’s curriculum. This allowed the school learners to understand the career prospects that the maritime sector offered. Indeed, companies were recruiting the matriculants from Simon’s Town High School because they possessed the necessary skills that were required in the maritime sector. TETA was examining how it could implement similar projects around other sub-sectors of the transport industry. Added to this, TETA had a programme to skill people in maths and science so they could become pilots. TETA also offered bursaries to learners if they studied technical subjects.

Mr Mzondeki enquired whether there were any employment opportunities for disabled people in the maritime industry. Mr Bothma responded that disabled people were prevented from working on board ships in the maritime industry. Nonetheless, there were disabled people working as administrators, and support staff, in the maritime sub-sector.

The Chairperson noted that the Committee wanted TETA to return to Parliament, at a later stage, to inform Members about its preparations for the 2010 World Cup.

Background of the merger between PAETA and SETASA to form AgriSETA
Dr F Prinsloo (Department of Labour Executive Manager: SETA Performance Management) noted that PAETA and SETASA had merged in July 2005 to form AgriSETA. Nonetheless, the two organisations had been separate entities in 2004/05. Hence, the Committee would receive separate briefings on the 2004/05 Annual Reports of PAETA and SETASA.

PAETA’s 2004/05 Annual Report: briefing
Mr M Van Niekerk (AgriSETA Chief Executive Officer) began by noting that PAETA had been responsible for skills development in the primary agricultural sector. The primary agricultural sector was comprised of a number of sub-sectors, which included plant production, animal production, and mixed farming. Mr Van Niekerk noted that the primary agricultural sector comprised of 400 000 permanent employees, 300 000 seasonal employees, 400 000 small-scale farmers, and 45 000 commercial farmers. Following this, Mr Van Niekerk provided an overview of PAETA’s profile.

Mr Van Niekerk discussed how PAETA had fared in meeting the NSDS targets, which were:
- To ensure that 70% of workers in the primary agricultural sector had NQF Level 1 qualifications. PAETA had fallen short of this target. This was due to the fact that many primary agricultural workers had little formal education. It was, therefore, impossible for PAETA to meet this target.
- To ensure that 15 % of primary agricultural sector workers had participated in structured learning programmes. PAETA had surpassed this targets by ensuring that 130 415 workers had participated in structured learning programmes.
- To guarantee that 20 enterprises were committed to the IPP Standard. PAETA had ensured that 21 enterprises were committed to the IIP Standard.
- To provide skills development grants to 75% of large enterprises in the primary agricultural sector. PAETA had bettered this target, and was providing grants to 257 large enterprises.
- To provide skills development grants to 40% of medium sized enterprises in the primary agricultural sector. PAETA had surpassed this target by providing grants to 357 medium sized enterprises.
- To provide skills development support to 20% of small enterprises in the primary agricultural sector. Unfortunately, PAETA had fallen short of this target and only managed to provide support to 602 small enterprises.
- To ensure that young unemployed people entered into learnerships and apprenticeships. PAETA had ensured that 2 625 learnerships were registered for young unemployed people.

Mr Van Niekerk discussed PAETA’s 2004/05 financial statements. He noted that PAETA’s total income for the year was R 93 108 000. During 2004/05, PAETA had spent R 90 697 000. PAETA had R 113 006 000 in cash or cash equivalents. Nonetheless, it had committed R 85 222 000 to projects. Mr Van Niekerk added that PAETA had received an unqualified report from the Auditor-General.

Mr Van Niekerk outlined the challenges that AgriSETA would be facing in 2005/06. These included the need to extensively support the agricultural land reform process; the need to support the roll-out of ABET; to transform its facilities into centres of excellence; to undertake agricultural and agricultural processing research; and to create links between the primary and secondary agricultural sectors.

Discussion
The Chairperson commented that there were a number of challenges that existed around land reform. Mr Mkongi noted that some farmers were asking exorbitant prices for their farms, which was stalling the land reform process. How was this being addressed?

Mr Mkongi noted that municipalities throughout South Africa owned a lot of land, which was not being used. He asked whether PAETA/AgriSETA was working with the municipalities to identify this land. This land could be used for land redistribution or communities could be allowed to use this land for agricultural purposes. Mr Mzondeki noted that some people had been given permission to farm on municipal land. However, the municipalities often failed to provide services to these people. For example, small-scale farmers using municipal land often did not have access to water supplies. This, in turn, meant that these projects sometimes failed. Municipalities needed to assist these small-scale farmers by providing them with services. Mr Van Niekerk responded that PAETA had a good relationship with a number of municipalities. Indeed, some municipalities were involved in training small-scale farmers. In order for these projects to succeed, there needed to be joint ventures that involved all the stakeholders.

Mr N Godi commented that PAETA/AgriSETA’s mentorship programme needed to be linked to the land reform process. PAETA/AgriSETA needed to assist the land recipients with skills development. Mr Van Niekerk acknowledged that there was a need to link AgriSETA’s mentorship programme with land reform. Added to this, AgriSETA needed to train people in business skills, which included how to source supplies and how to market their produce.

Mr Mkongi noted that transformation seemed to be creating a certain amount of uncertainty amongst people in the primary agricultural sector. How was AgriSETA addressing this situation?

Mr Mkongi enquired why the number of permanent workers was declining in the primary agricultural sector. There seemed to be a move to employ seasonal workers rather than permanent workers. Mr Van Niekerk acknowledged that the number of permanent workers in the primary agricultural sector was declining. This was due to the fact that the profit margins of farmers were declining. Many farmers simply could not afford to employ people on a permanent basis. Farmers were facing competition from the import sector. As a result, they had to keep their costs to a minimum. It was cheaper to employ people on a seasonal basis.

Mr Mkongi asked whether PAETA/AgriSETA offered a training programme for black youth to become commercial farmers. Mr Van Niekerk noted that PAETA was focusing on providing NQF Levels 3/4/5 training for black people. This would ensure that these people entered into management positions in the primary agricultural sector. In addition, PAETA had provided ABET to black youths. Providing training to the black youth was important. Nonetheless, the agricultural sector consisted mainly of older people.

Mr Mkongi commented that more people needed to be provided with processing and packaging skills. The processing and packaging sub-sector had the potential to create employment. He enquired whether PAETA/AgriSETA had a processing and packaging skills development programme. Mr Van Niekerk responded that the primary agricultural sector needed to be effectively linked with the processing and packaging sector. However, it was not viable for a small-scale farmer to develop a packaging or processing plant on their property. For this reason, it was vital that co-operatives were established. If small-scale farmers pooled their resources they could gain access to loans and credit. However, certain problems could also be created. For example, in the Lydenburg area 273 families formed a co-operative and purchased a commercial farm. More families then moved on to the farm. As a result, there were now approximately 1 000 families living on the farm. This meant that commercial farming, or even small-scale farming, was no longer viable on this farm. These people needed assistance. Indeed, when people formed co-operatives, they needed mentorship and skills training to ensure that a situation like Lydenburg did not recur.

Ms Moss commented that many of the agricultural colleges were underused. For example, there was an agricultural college in Clanwilliam that had good facilities; however, there were very few students. Furthermore, transformation had not taken place at this college, and the college was not marketing itself properly. She enquired how PAETA was addressing the problem of the underused agricultural colleges. Mr Van Niekerk responded that some of the agricultural colleges were functioning effectively. For example, the agricultural colleges in Stellenbosch and Groblersdal were performing well. Nonetheless, there were many other agricultural colleges that were underused. This needed to be rectified.

Ms Moss asked what type of support PAETA/AgriSETA provided to small-scale farmers. Mr Van Niekerk noted that PAETA/AgriSETA assisted new farmers with skills development programmes, mentorship programmes, learnerships and allowances. For example, AgriSETA was currently providing support and training, for cotton farming, to 50 black farmers per year.

The Chairperson asked why PAETA had failed to meet the NSDS target for the number of disabled people that needed to be placed in learnerships. Mr Van Niekerk responded that people needed to be physically fit to become farmers. It was difficult for disabled people to become farmers due to the physical demands of farming.

The Chairperson asked whether learnerships were having a positive impact on people’s lives. Mr Van Niekerk replied that it was a challenge to ensure that people received skills development. He added that skills development brought hope to individuals and improved their chances of becoming employed or self-employed.

SETASA’s 2004/05 Annual Report: briefing
Mr Van Niekerk provided an overview of the secondary agricultural sector. He noted that this sector was comprised of various sub-sectors, which included the grain sub-sector; the sugar sub-sector; the fruit sub-sector; the poultry sub-sector; the milling sub-sector; the red meat sub-sector; and the tobacco sub-sector. There were 1 861 enterprises and 108 270 employees in the secondary agricultural sector. Mr Van Niekerk then discussed the profile of SETASA.

Mr Van Niekerk outlined the progress that SETASA had made towards achieving the NSDS targets, which were:
- To ensure that 70% of workers in the secondary agricultural sector had NQF Level 1 qualifications. SETASA had been unable to achieve this target. Nonetheless, 18 148 workers in the sector did have NQF Level 1 qualifications.
- To ensure that 15 % of secondary sector agricultural sector workers had participated in structured learning programmes. SETASA had bettered this target by ensuring that 48 172 workers had participated in structured learning programmes.
- To guarantee that 20 enterprises were committed to the IIP Standard. SETASA had fallen short of this target. Only 11 enterprises in the secondary agricultural sector had committed to the IIP Standard.
- To provide skills development grants to 75% of large enterprises in secondary agricultural sector. SETASA had surpassed this target, and was providing grants to 121 large enterprises.
- To provide skills development grants to 40% of medium sized enterprises in the primary agricultural sector. SETASA was providing grants to 101 medium sized enterprises, which meant that it had surpassed its target.
- To provide skills development support to 20% of small enterprises in the secondary agricultural sector. Again, SETASA had bettered this target.
- To ensure that young unemployed people entered into learnerships and apprenticeships. SETASA had ensured that 2 625 learnerships had been registered for young unemployed people.

Mr Van Niekerk discussed SETASA’s 2004/05 financial statements. He noted that in 2004/05, SETASA had an income of R 86 582 000 and had spent R 89 007 000. He stated that SETASA had R 87 532 000 in cash or cash equivalents. It had, however, committed R 45 458 000 to projects. Mr Van Niekerk added that SETASA had received an unqualified report from the Auditor-General.

Discussion
Mr Mkongi asked whether SETASA’s liabilities had been linked to its 2004/05 budget deficit. Mr Van Niekerk responded that SETASA’s liabilities had been linked to its deficit.

The Chairperson asked what would happen to the budget roll-overs of PAETA and SETASA now that they had merged into AgriSETA. Mr Van Niekerk replied that AgriSETA was examining how these roll-overs could be allocated to projects and learnerships.

The meeting was adjourned.

 

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