Technology Innovation Agency Bill [B49-2007]: Department's Response to Public Submissions

Science and Technology

30 January 2008
Chairperson: Mr G Oliphant (ANC)
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Meeting Summary

The Department of Science and Technology briefed the Committee on the rationale of the proposed Technology Innovation Agency and the new amendments to the TIA Bill, which had now been prepared by the Department in response to public submissions in writing and those made during the public hearing. In addition, the State Law Adviser informed the Committee about the proposed transitional provisions.

Members scrutinised the migration of assets and employees from the South African Inventions Development Corporation, and its disestablishment. Furthermore, the Committee probed issues regarding the Investment policy, possible conflicts of interest that could arise from membership of boards, and the role of Parliament in the dissolution of the Agency board

Meeting report

Opening Remarks by Chairperson
The Chairperson commended the stakeholders for their contribution and for showing an interest in the development of this legislation. He noted that the Committee had received four additional written submissions, which fundamentally reproduced the concerns of earlier written and oral submissions. Finally, he anticipated that the Bill would be finalised by 12 February and invited the Department to join the Committee on that date.

Department of Science and Technology (DST) Responses to public submissions
Dr Phil Mjwara, Director General: DST, commented that local innovators faced many challenges. These included the lack of access to venture capital, poor management of intellectual property rights, and poor business development skills. The Technology Innovation Agency (TIA) was intended to develop as a public institution, together with private sector partners, that would improve the country’s capacity in translating local research and development into commercial products and services. In addition, it was anticipated that TIA would increase the number of players in the early stage of innovation and help to stimulate the technology base in South Africa.

Mr Mjwara  noted that the comments from the stakeholders fell into six broad categories. He clarified in detail (see attached presentation) how the Department tackled each issue.

Mr James Spies, Manager: Legal Services, DST, discussed the Department’s proposed amendments to the TIA Bill. The changes were in response to the stakeholder comments, which emerged both from the written submissions and public hearings on the Bill. The recommended amendments were confined to certain sections, pertaining to the definitions, object of the Agency, powers and duties of the Agency, Board of Agency and Transitional Arrangements.

Ms Bongiwe Lufundo, State Law Adviser, Office of the Chief State Law Adviser, proposed transitional provisions regarding the disestablishment of South African Inventions Development Corporation (SAIDCOR) and the transfer of its employees, assets and liabilities to the new Agency (see attached presentation).

Mr S Farrow (DA) expressed concern that the Bill did not “specifically” define the role that the Agency would play in relation to private equity companies. He also voiced disquiet about the lack of clarity regarding the exit strategy in the Bill.

Speaking rhetorically, the Chairperson wondered whether it was common practice to put the rationale in a Bill. Subsequently, he appealed to Members to ensure that the legislation was properly captured.

Dr Mjwara confirmed that the Investment Policy, which was under construction, would address the exit and handover strategy and the extent of the Agency’s interaction with private companies.

The Chairperson asked when this policy would be finalised.
Dr Mjwara replied that it could be ready in the next two weeks.

Mr J Blanche (DA) asserted that the definition had to be clear so that the next generation of legislators would understand the true intention of the Bill.

Mr S Dithebe (ANC) posed two questions. Firstly, he enquired whether the Treasury agreed that the Agency could be formulated under a hybrid Schedule 3B/3A model. Secondly, he noted that the employees of SAIDCOR would migrate to the Council for Scientific and Industrial Research and sought to understand the rationale behind this.

Dr Mjwara indicated that he had consulted with his counterpart at Treasury on this matter and was still awaiting a detailed response in regard to the Scheduling of the entity. He recognised that this response was necessary and promised to obtain it before the Department’s next sitting with the Committee.

In response to the latter question, Ms Lufundo clarified that all the employees of SAIDCOR, who were currently being seconded to the Corporation by CSIR, would be transferred back to the CSIR.

Mr Dithebe was happy with most of the proposed amendments, and in particular, those relating to sections 4 and 5. He observed that the Bill did not provide for the Committee’s involvement in the dissolution of the Board and sought to correct this.

Mr Spies declared that the Committee was involved in the appointment of the Board and he was not certain what sort of input the Committee wanted to make concerning its dissolution. He added that he would seek legal advice on this matter.

Mr A Ainslie (ANC) enquired whether there was room for negotiations on equity and membership of board.

Dr Mjwara said that there would indeed be the possibility of such negotiations.

Mr Ainslie probed whether the reference to “company” in section 19 (1)(d) of the transitional provision referred to Technifin.

Ms Lufundo confirmed that it did.

Mr Ainslie sounded a word of caution about the Agency inheriting the obligations and liabilities of SAIDCOR.

Mr Farrow believed that it would be inappropriate for the CEO of the Agency to become an ex-officio member of all the different company boards, and proposed that this position be occupied by the Director General of Science and Technology or anybody designated by him.

Mr Blanche concurred with his colleague that a conflict of interest could arise if a TIA board member served on the board of two or more companies.

Dr Mjwara countered the above assertion. He maintained that any conflict of interest could be avoided through the implementation of confidentiality and disclosure documents.

A member did not think it was necessary to disestablish the SAIDOR Board because it did not exist in practice.

Ms Lufundo stressed that this was a legal requirement.

Mr Dithebe sought to understand the reason behind transferring the assets of SAIDCOR to the Agency.

Ms Lufundo emphasised that this was only a guideline and not an imperative. She construed that this was a policy issue best left in the hands of the Committee.

The Chairperson thanked the Department and reiterated his determination that the Bill would be finalised on 12 February 2008.

The meeting was adjourned.


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