Postal Services Amendment Bill: briefing

Meeting report

COMMUNICATIONS PORTFOLIO COMMITTEE
18 September 2001
POSTAL SERVICES AMENDMENT BILL: BRIEFING

 

Postal Services Amendment Bill [B63-2001]
Department of Communications briefing on the Bill

Chairperson: Mr N Kekana

SUMMARY
The Committee did not foresee any controversy relating to the Postal Services Amendment Bill. It was noted that the role of the South African Postal Services in the disbursement of social grants had changed. The South African Postal Services could not meet all the tendering requirements. The Committee plans to pursue this issue. Also discussed were the investigations into corruption and fraud that are currently taking place at the South African Postal Services.

MINUTES
The Chairperson noted that the Committee secretary had received an unbecoming and disrespectful response from the Acting Head of Legal Services at the South African Postal Services, Mr Johan Naude, when she had informed him about the Committee's intention to deal with the Bill. The Chair appealed to the Chief Executive Officer (CEO) of the South African Postal Services, Mr Mandla Manyatshe, to look into the matter, as he was present at the meeting.
Mr Kekana pointed out that the Committee would be able to pass the Bill without the co-operation of the South African Postal Services but they were informed as a matter of courtesy.

Postal Services Amendment Bill
The Director General (DG), Mr Andile Ngcaba, and Deputy Director General (DDG), Ms Phumelele Ntombela-Nzimande briefed the Committee on the amendments as set out in the Bill.
(See Powerpoint presentation).

Discussion
The Chair commented that the Bill appeared to be non-controversial and he did not foresee any delays in the Committee finalising it.

He informed the Committee that Mr Manyatshe had been receiving death threats as a result of his efforts to eradicate corruption and fraud in the South African Postal Services.

Mr Ngcaba suggested that if the Committee was interested to learn more about the ongoing investigations into corruption, it could be discussed in a closed session with the Committee.

Ms S Vos (IFP) asked the following questions:
(i) Clause 3 proposes that the Minister appoint the persons to serve on the Regulator. She asked why there was no public process in the appointment of these individuals.
(ii) With reference to Clause 6, what is the current position on insurance at Postal Services.
(iii) Why was the prison sentence for fraud limited to two years in Clause 8?
(iv) Did courier companies have any problems with the provisions in Clause 9 relating to restrictions on the size and weight of packages.
(v) What is the role of the South African Postal Services with regard to social grants?

(i) Mr Ngcaba pointed out that they had followed international practice. He stated that the feeling was mutual amongst stakeholders that they would not be prejudiced if the Regulator was appointed in this manner. It is the norm in the sector.
(ii) The idea behind including provisions on insurance in the Bill is to give certainty to persons who insure their goods. In times of dispute it makes matters much clearer.
(iii) It was agreed that if the Committee wanted the prison sentences to be longer, this issue could be reconsidered.
(iv) The DG stated that they have not heard any objections from courier companies on the provisions. The sizes and weights of packages are well defined in the clause. Courier companies welcome the Bill as it clarifies many matters.
(v) Discussion is ongoing with the relevant department on the issue. The ideal situation would be for the South African Postal Services to handle the disbursement of social security grants. Mr Ngcaba stated that the South African Postal Services has submitted tenders in this regard but the problem is that the contract period is only for 3-4 years. The cost of setting up an infrastructure for the delivery of such a monumental service would not be justifiable for the period that contracts are allocated. Mr Manyatshe added that one of the requirements of being allocated the tender is that the tenderer must be willing to pay two months pension up front and only thereafter be reimbursed for it. The cost would amount to R604 million which the South African Postal Services could not afford.

Mr M Waters (DP) asked if the South African Postal Services have a valid licence to operate. If so, on what date was it issued? He pointed out that it was supposed to be issued by 1 April 2000. Had the South African Postal Services previously operated without a licence?

Mr Ngcaba confirmed that the South African Postal Services does have a valid licence. It has been gazetted and is also available on the Department's website. He offered to furnish Mr Waters with a copy. He did however concede that the licence had not been issued by 1 April 2000. Due to the complexity of the process, the licence could only be issued by July 2001. Prior to this date, the South African Postal Services had been operating without a licence.

The Committee agreed to the Chair's suggestion that it meet with its NCOP counterparts for discussions on the role that South African Postal Services is to play in the disbursement of pensions and social grants.

The Chair asked the Committee for its views on the suggestion by the DG that the Committee be briefed in camera on the current investigations into the South African Postal Services.

All parties with the exception of the DP agreed to a briefing in camera.

The Chair stated that due to a lack of consensus, it would be best to have an open briefing. However many sensitive issues could therefore not be dealt with.

Dr Cwele (ANC) asked the DP if they would not reconsider their position.

Mr Waters (DP) responded that proposals to improve the South African Postal Services could still be made in an open session.

The Chair asked the DG and the CEO to give the Committee an indication of some of the problems that have been discovered at the South African Postal Services.

Current Investigations in the South African Postal Services
Mr Ngcaba stated that in the past government subsidies had been used to finance post offices in predominantly white areas. This meant that post offices in black areas were not on par with their white counterparts and in many rural black areas postal services were non-existent. The top structures of the postal services has seen many faces in the last couple of years - as corruption and fraud seemed to infect even those who were supposed to transform the South African Postal Services. These and many more were some of the problems that the CEO, Mr Manyatshe, had to contend with.

Mr Manyatshe elaborated that corruption and fraud was embedded even deeper within the organisation than what he had initially thought. The financial crisis at the South African Postal Services can be attributed to the vast amounts of contracts that they have committed themselves to. In the past top management had entered into contracts worth millions - whilst having vested interests in them. The CEO is currently reviewing all major contracts to check on their legitimacy. Mr Manyatshe is trying to change the culture of acceptance of poor practices that had prevailed in the past. The restructuring of the South African Postal Services is not without its disadvantages. Whenever a post office is closed down due to downsizing, a Postnet office opens up in its place. A further problem was that a great deal of managerial staff has taken employment elsewhere. This has caused a depletion of experience and knowledge within South African Postal Services. To address the problem limits have been placed on the granting of severance packages and when persons leave, they are required to sign a restraint of trade agreement.

The DG noted that some of the issues highlighted in the media are very selective at the expense of larger issues being overlooked.

The Chair was impressed by the candidness of the presenters and stated that he looked forward to engaging with them in the near future.

The meeting was adjourned.