Alexkor Limited Amendment Bill: briefing by the Department of Public Enterprises; Postal Services Amendment Bill: briefing by t

Meeting report

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The aim of this report is to summarise the main events at the meeting and identify the key role players. This report is not a verbatim transcript of proceedings.

LABOUR SELECT AND PUBLIC ENTERPRISE
4 October 2001
BRIEFING BY THE DEPARTMENT OF PUBLIC ENTERPRISES ON THE ALEXKOR LIMITED AMENDMENT BILL AND BRIEFING BY THE DEPARTMENT OF COMMUNICATIONS ON THE POSTAL SERVICES AMENDMENT BILL

Chairperson: Mr S. Fenyane

Documents handed out:
Alexkor Limited Amendment Bill [B 29-2001]
Presentation on the Alexkor Amendment Bill, 4 October 2001 (Department of Public Enterprises)
Postal Services Amendment Bill [B 63B-2001]
Presentation on the Postal Services Amendment Bill, 2001 (Department of Communications)

SUMMARY
The Committee heard presentations on the Alexkor Limited Amendment Bill and the Postal Services Amendment Bill. The presentations were followed by discussion and questions, and the meeting adjourned on the premise that deliberations would be continued in one week's time.

MINUTES
Briefing by the Department of Public Enterprises on the Alexkor Limited Amendment Bill [B 29B 2001]
The Chairperson introduced the presenters from the Department of Public Enterprises (DPE) to brief the Committee on the "shortest bill in history," the Alexkor Limited Amendment Bill. The presenters were DPE Chief Director Andile Nkuhulu and Director Denzel Matjila.

Mr Nkuhulu began by reminding the Committee that the amended Bill had already passed through the National Assembly and been adopted by both parties. He proceeded with an abbreviated history of the proposed amendment. The DPE determined in the mid-1990s that it was not a long-term function of the South African Government to continue to pour funds into the struggling Alexkor mines. In 1998, the Government began a restructuring program for Alexkor-held mines in Namaqualand. The Government attached to the idea of turning the mines over to private sector owners who could provide the finances and management to transform the company into a profit-making entity. Private sector actors, rather than the government, could provide the necessary investment that would rejuvenate both the company and the mine-dependent communities in the area. Accordingly, the Government identified two key objectives of its involvement in Alexkor Limited: (1) to improve Government knowledge of both the mining company and the socio-economics of the local communities, and (2) to recruit a company that would buy Alexkor assets.

Mr Nkuhulu informed the Committee that, for the three years since these objectives were laid out by DPE, Alexkor continued to suffer detrimental losses. He explained that the restructuring that DPE was proposing was an amendment to Section 4 of the Alexkor Bill. He then introduced Mr Denzel Matjila, Director of DPE, to proceed.

Mr Matjila briefly stated that the two-sentence amendment to the Alexkor Bill served to give the Minister greater flexibility. He explained that the department was proposing to improve the jurisdiction of the Minister over the restructuring of Alexkor Limited.

The Chairperson posed two questions to the Select Committee. He asked if there were any proposed amendments to the proposed amendment, and what the rationale behind the original wording of Section 4 might have been.

Mr Nkuhulu responded no to the first question. In response to the second question, he explained that the original legislation regulating Alexkor had been put in place to address poor white employment in Namaqualand. The government had, in other words, taken a "protectionist approach" to white employment. The proposed amendment would update the Bill, in order to ensure that legislation did not prescribe steps taken by business management. Alexkor Limited, he concluded, needed the assistance of the private sector.

The Chair asked the Committee to pose clarifying questions.

It was asked, if the mine went under, did that mean that the entire community would suffer?

Mr Nkulhulu responded by saying that the consequences of closing the mine were too dire to contemplate.

It was asked how many people the mine employed

Mr Matjila answered that employment was 857 last year, 666 this year.

Mr Nkulhulu raised the point again that there was a direct correlation between mine employment and the status of the community.

The Chair concluded the discussion by saying that the Committee would finalise deliberations on Wednesday, 10 October 2001, and he excused the presenters.

Briefing by the Department of Communications on the Postal Services Amendment Bill [B 663 2001]
The Chair introduced Ms P. Ntombela-Nzimande, Deputy Director-General of the Department of Communications, to speak on the Postal Services Amendment Bill, 2001.

Ms Ntombela-Nzimande began by apologizing on behalf of the Director-General for not being able to attend the meeting. She said that the Department had discovered, since the implementation of the Postal Services Act 1998, that the Act required certain amendments. First, the department would like to compensate for some unclear job responsibility guidelines within the sector by creating a Postal Regulator. Second, the Department would like to make legal provisions for mail insurance. Finally, the Department intended to make the amending process easier by catering the language of the Bill to future amending.

Ms Ntombela-Nzimande continued by running through the clauses of the bill being amended. Clause 1, amending Section 1, changed the definition of Regulator from that of the Directorate. Clause 2, amending Section 3, rearranged language to clarify the name, "Postal Regulator." Clause 3, an amendment to Section 4, amended the job description of the Postal Regulator in order to create a clear separation between roles in policy and regulation. Ms Ntombela-Nzimande explained that the new Regulator would consist of three individuals: one chairperson appointed by the Minister for a five-year period and two officers of the Department of Communications also designated by the Minister.

Ms Ntombela-Nzimande explained that the amendments to Sections 5 and 17 were to change incorrect cross-references. Clause 6 inserted section 30A into the body of the bill in order to empower the South African Post Office (SAPO) to provide insurance of mail and other postal articles. Ms Ntombela-Nzimande expanded on this amendment by saying that South Africa needed to be able to comply with the same standards for mail delivery as other countries, and that, in line with other postal administrations, the maximum amount that one could insure for would be R2000. Clause 7, an amendment to Section 35, made provisions for more than one office to be able to handle undeliverable articles that must be returned. Ms Ntombela-Nzimande explained that Clauses 8-11 cleared up ambiguities of language.

Ms Ntombela-Nzimande concluded her presentation by mentioning that Clause 12 laid out a transitional provision because of the amended composition of the Regulator. The provision empowered the Minister to appropriately appoint a substitute to the position for the period between the term of the incumbent and the new appointee.

In response to the question of how independent the Regulator would be, Ms Ntombela-Nzimande said that the Committee must keep in mind that the Department controlled the allocation of all finances, and therefore it would be impossible for the Regulator to exercise excessive autonomy.

The question was posed whether the new positions would be full-time.

Ms Ntombela-Nzimande answered that the Regulator would be full-time, but the Department had not decided on other positions.

The final question posed by the Committee concerned what had happened in the last few years to motivate the creation of the Postal Regulator.

Ms Ntombela-Nzimande explained that, before 1998, SAPO was regulated by the 1958 legislation. The introduction of the 1998 Act attempted to align South African postal delivery with global standards. This Act had been enacted gradually, and, as it came into effect, the Postal Service had been able to identify its ambiguities and shortcomings.

The Chair announced that the Committee would reconvene on Wednesday, 10 October 2001, and adjourned the meeting.

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