Questions & Replies: Trade & Industry

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2010-12-10

THIS FILE CONTAINS 25 REPLIES.

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Question 2553

Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

Whether he intends restricting the reference to "black people" for the purpose of the Broad-Based Black Economic Empowerment Act, Act 53 of 2003, to only .(a) South African citizens and/or (b) South African citizens belonging to certain groups that were living in the country before a certain date; if not, why not; if so, what are the relevant details? NW3184E

Response:

(1) The definition of Black people is clearly encapsulated in the Broad Based Black Economic Empowerment Act 53 of 2003 and is further encapsulated in the Codes of Good Practice. "Black people" is a generic term which means Africans, Coloureds and Indians and as defined in the Act includes only natural persons who are citizens of the Republic of South Africa by birth or descendent or are citizens of the Republic of South Africa by naturalization:

• Occurring before the commencement date of the Constitution of the Republic of South Africa of 1993, or

• Occurring after the commencement date of the Constitution of the Republic of South Africa of 1993 but who without the apartheid policy would have qualified for naturalization before then".

Question 2449

Mr. AP van der Westhuizen (DA) to ask the Minister of Trade and Industry:

(1)(a) What have caused the delay in setting up the Broad-Based Black Economic Empowerment (B-BBEE) Advisory Council as provided for in the Broad-Based Black Economic Empowerment Act, Act 53 of 2003 and (b) on what dates have the advisory council and its subcommittees meet since its inception;

(2) Whether there are any members of the advisory council that have been unable to attend any of its meetings or those of its sub-committees; if so, what are the relevant details in this regard;

(3) Whether the advisory council adopted any reports or motions to date in terms of section 5 of the Act; if not, why not; if so, what are the relevant details

(4) What has been the total amount in expenses that have been incurred as at the latest specified date (a) by and/or (b) for the advisory council and its subcommittees? NW3017E

Response:

(1) The process to rollout the B-BBEE policy and legal framework has been in phases, with the gazetting of the Codes of Good Practice, after the promulgation of the B-BBEE Act, Act 53 of 2003, and recently the establishment of verification, and monitoring and evaluation structures. As soon as I assumed office, the dti immediately facilitated the process of appointing the Advisory Council with the Presidency. The B­BBEE Act makes provision for the establishment of the Advisory Council by the President, in this regard, due process had to be followed through rigorous consultations with key stakeholders. The appointment of the Advisory Council was completed in December 2009.

(2) The inauguration meeting of the Presidential Advisory Council took place on 4 February 2010. All members attended, except for one member who was abroad.

The induction session of the Presidential Advisory Council took place on 6 April 2010. Only two members did not attend due to other business commitments.

The 3rd meeting took place on 20 May 2010. In this meeting, all members of the Council attended.

With regards to the attendance in the sub committee meetings, only two members submitted apologies due to other commitments.

There were nine (9) sittings of the sub committees since May 2010. This demonstrated commitment from all members, and the inputs and contributions were valuable.

(3) Subsequent to the Presidential Advisory Council meeting of 20 May 2010, the dti facilitated the establishment of the sub committees, the appointment of the chairpersons of the sub committees, development of the Terms of Reference and action plans. The sub committees have been focusing on the assessment of the B-BBEE environment, unpacking the institutional mechanisms, and exploring the legislative impact. Currently, these sub committees are consolidating their reports in order to table them at the up-coming Presidential Advisory Council meeting scheduled for October 2010.

(4) As of today, the total expenditure of the Presidential Advisory Council is estimated at R200000.00. This is inclusive of traveling, catering, accommodation and shuttle services.

Question 2444.

Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

(a) In each financial year since the inception of the co-operatives incentive scheme (CIS), (i) how many co-operatives have been assisted by CIS and (ii) what is the total amount of grants issued under CIS and (b) what is the average number of members of those co-operatives that have been assisted through CIS? NW3012E

Response

Financial year

No cooperatives

assisted/

approved

Total value of

incentives

approved

Total

members

Average

number of

members

2007/08

5

R 890 000

40

8

2008/09

68

R 14 359 000

688

10

2009/10

196

R 43 000 000

2530

13

2010/11

88

R13 000 000

1468

16

TOTALS

357

R 71 249 000

4726

13

QUESTION NO 2443

Mr. A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

Whether the Companies and Intellectual Property Registration Office (Cipro) has placed any advertisements over the past three years to inform companies of their obligation to submit annual returns in respect of their registered companies; if not. why not; if so, (a) in which publications were these advertisements placed, (b) on what dates were they advertised and (c) what was the cost of these advertisements? NW3011 E

Response:

CIPRO has advised that they have placed the following attached advertisement over the past three years:

QUESTION NO: 2442

Mr N D du Toit (DA) to ask the Minister of Trade and Industry:

Whether he intends adjusting the wheat tariff to make provision for the gap between (a) production costs and (b) import price parity for the next planting season; if not, why not; if so (i) when is it anticipated that this will be done, (ii) what are the reasons for the delay in the announcement and (iii) what are the further relevant details?

NW3010E

REPLY

A revised variable tariff formula for wheat was implemented on 30 April 2010, after an investigation by the International Trade Administration Commission of South Africa (ITAC).

Among others, the following important criteria were considered:

a) Structural changes in the global demand and supply of wheat;

b) The cost and price differentials between domestically produced wheat and that produced in the major wheat producing countries;

c) The effect of agricultural subsidies in developed countries;

d) Profitability of wheat farming and investment returns;

e) Potential for job creation and increased investment, also in downstream agro-processing industries:

f) Primary and intermediate input cost structures;

g) Trade data;

h) Full value chain effects of increased tariffs;

i) Lack of self-sufficiency and widening trade deficit in wheat:

j) The South African Futures Exchange (SAFEX) pricing regime:

k) The competitive position of wheat farmers within the wheat value chain; their relative pricing power and high cost of certain inputs especially energy and fertilizer (these aspects require an approach on several fronts, not on tariff setting alone);

l) Impact of grain prices on consumers, in particular the poor, of an important staple food; and

m) Transport costs.

The variable tariff formula operates as a medium term price support system and triggers adjustments to the applied tariff based on the difference between prevailing world wheat prices and the domestic reference price. The formula addresses the price volatility in agricultural commodity sectors, rendering protection to an industry when international prices are low and allowing for reduced or zero protection when international prices are high, as is currently the case.

A review of the formula will be considered upon a request from interested parties and dictated by changed global and domestic circumstances.

Question 2419.

Mr S J F Marais (DA) to ask the Minister of Trade and Industry:

Whether (a) his department or (b) any of its entities has signed any contractual agreements with n certain company (name furnished) or any of its affiliates (i) in the (aa) 2006-07. (bb) 2007-08. (cc) 2008-09 and (dd) 2009-10 financial years and (ii) during tile period 1 April 2010 LIP to the latest specified date for which information is available: if so, (aaa) what is the nature of each contract. (bbb) what is the monetary value of each contract. (eee) wllat is tile (aaaa) start and (bbbb) end date of each contract. (ddd) what are the details of 1118 process that was followecl for the signing of each contract. (eee) who else tendered for each contract that was awarded and (Iff) what amount did each tenderer quote in each case? t!W298HE

Response:

The Department and its entities have not signed any contractual agreements with General Nyanda Security Advisory (GNS) company or its affiliates (i) in respect of the (aa) 2006-07. (bb) 2007-08. (cc) 2008-09 (dd) 2009-10 and (ii) 201O/11 financial years.

QUESTION NO 2371

Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

(1) How many (a) companies and (b) close corporations were Finally de registered by the Companies and Intellectual Property Registration Office (Cipro) on 16 July 2010 due to non-compliance with annual returns

(2) what criteria were used to decide which, companies and close corporations were to be deregistered by Cipro.

(3) whether any of the companies and /orclose corporations were informed of the (a) intention to deregister them and /or(b) their final deregistration status. if not why not, if so, how were they informed,

(4) whether any exceptions were made in terms of the criteria regarding the final deregistration of certain {a} companies and/or (b) close corporations If so (i) how many companies were exempted from the deregistration process and (ii\ why

(5) (a) when will the next batch of companies and/or close corporations be deregistered and

(b) what criteria will apply at this future date') NW2940E

Response:

(1) (a)-{b) According to Cipro, 236143 companies and 528731 close corporations respectively were finally deregistered on '16 July 2010, due to non-compliance with annual returns

(2) According to Cipro the criteria used relates to all companies and close corporations that were not compliant with the annual returns requirement since its introduction and up until May 2010. The technical specification is that any company or close corporation that has an annual return outstanding for more than 8 months (two month lodgment period and 6 month penalty period) after the anniversary month

(31 (a) According to Cipro, the companies and close corporations were informed of Cipro's intention to deregister them as follows:

  • A notice (in deregistration letter) was sent by regular mail to each company and close corporation's registered address registered on Cipro's database, indicating that it is in deregistration and the reason(s) provided
  • The notice of deregistration was also posted on the website and published in the media
  • Marketing campaigns were conducted in various provinces to educate company and close corporation owners of their duty to comply with annual returns of the pending deregistration with annual returns and of the pending deregistration If they do not comply
  • Communication session were held with various Chambers Of Commerce
  • (b) According to Cipro the companies and/or close corporations were, informed of their final deregistration status as follow:

    · The names of deregistered companies were published on the Cipro website

    · Final deregistered letters ale being processed

    · A simplified restoration process was also published on the Cipro website and in the media

    (4) According to Cipro no exceptions were made for the criteria regarding the final deregistration of companies and/or close corporations

    (5) (a) According to Cipro the entities are deregistered at any time on request as indicated in the provisions of the Companies Act. for the next batch of Annual Returns, the de­registration process will start In September 2010

    (b) According to Cipro the same criteria will apply as indicated in the response to question 2 above, i e the prescribed periods as specified in the Companies and Close Corporations Acts respectively

    QUESTION NO: 2370

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    By what date will the e-initiative of the Companies and Intellectual Property Registration Office (Cipro) aimed at improving the administration and integrity of the companies register be implemented in full? NW2939E

    Response

    It is not possible to specify a date for full implementation as the Enterprise Content Management contract matter is a subject of a court action which the dti is vehemently opposing. Clarity on this matter will be communicated in due course .

    Question 2338

    Dr D T George (DA) to ask the Minister of Trade and Industry: (Inter-departmental transfer on 13 September 2010)

    (1) Whether the National Treasury has conducted an analysis of the impact of Government's interventions to promote black economic empowerment to determine if there have been any unintended consequences that impacted on the economy; if not, why not; if so, what (a) are the unintended consequences that have impacted on the economy and (b) are the further relevant details;

    (2) whether he has found that black economic empowerment had a positive impact on the economy; if not, what steps has he taken to alleviate its impact; if so, what steps has he taken to enhance its impact?NW2906E

    Response:

    (1) the dti together with the Presidency and the Presidential Black Business Working Group conducted a baseline study on B-BBEE in both public and private entities in 2007 and 2008. The main purpose of the study was to determine the level of compliance with regards to the implementation of BBBEE.

    (2) As per the above-mentioned baseline study, the elements of the BBBEE scorecard that reflected good progress were mainly on the Human Resource Development (Skills Development 43.8%, Employment Equity 36.7%). Enterprise Development (12.2%) and the Procurement elements (16, 7) % were the least performing elements of the scorecard.

    (3) The overall outcomes of the baseline study indicated that the economy was a level 8, the least compliance level on the BBBEE scorecard. More progress has been achieved since the last baseline study. the dti, in collaboration with the Presidential BBBEE Advisory Council is therefore conducting a follow-up study this year, which will reflect on the overall impact and progress on all elements of the scorecard of BBBEE in the entire economy.

    (4) Black economic empowerment has been an important contributor to economic activity, particularly in terms of mergers and acquisitions, over the past five years. In 2007 we saw 153 deals worth 96 billion, in 2008, 83 deals worth 60 billion and in 2009 BEE activity declined relatively due to generally depressed economic conditions. As the dti we are currently embarking on a follow up study to measure the impact of BEE on the other elements of the BBBEE Scorecard and across all sectors of the economy.

    (5) Fronting has become the main unintended consequence of BBBEE, and takes many forms, including "tenderpreneuring" and "import fronting". In its current form, the B-BBEE Act does not make any specific provision for the investigation, prosecution and enforcement of BBBEE fronting. The fronting challenge impacts negatively on measuring government procurement in B-BBEE, and also misrepresents the progress made towards the empowerment and transformation in South Africa economy. the dti is currently investigating appropriate measures to address the challenge, and we are hopefully that we will make pronouncement very soon.

    Question: 2245.

    Mr S J F Marais (DA) to ask the Minister of Trade and Industry:

    (1) Whether his Department and any of its entities has (a) purchased or (b) leased any buildings for administration (i) in the (aa) 2008-09 and (bb) 2009-10 and (ii) for the 2010-11 financial years; if not, why not; if so, in each case, (aaa) what is the cost of the building, (bbb) what is the size of the building, (ccc) why was it bought or leased, (ddd) what will be its use, (eee) who will occupy it and (fff) approximately how many persons will occupy the total space of each building;

    (2) whether his department and any of its entities intends purchasing or leasing any buildings for administration for the (a) 2011-12, (b) 2012-13 and (c) 2013-14 financial years; if not, why not; if so, in each case, (i) what is the cost of each building, (ii) what is the size of each building, (iii) why will it be bought or leased, (iv) for what will it be used, (v) who will occupy it and (vi) approximately how many persons will occupy the total space of each building? NW2753E

    Response:

    His Department

    (1) & (2) The Department is leasing its office buildings through a 25 year Public Private Partnership Agreement. The leased office space is 24 650 m2 in extent, at an annual unitary cost of approximately R159m escalated at CPI. The office space accommodates a maximum of 2100 staff members. The Department is sharing the buildings with the Economic Development Department and some entities of both Departments on the basis of a cost recovery arrangement.

    Regional offices in Cape Town, Port Elizabeth and Durban are leased through and paid for by the National Department of Public Works. The Office space is 1 398 m2 in extent and accommodates 22 staff members. The total annual lease payment for the 3 regional offices is R849480.

    QUESTION NO.: 2171 QUESTION FOR WRITTEN

    DATE OF PUBLICATION: 20 AUGUST 2010

    Mr P J Groenewald (FF Plus) to ask the Minister of Trade and Industry

    (1) What criteria has he applied in respect of the import tariff on wheat;

    (2) whether he has taken local circumstances for this industry in to account; if so, which aspects of these circumstances? NO2673E

    REPLY

    (1) In October 2009, Grain South Africa applied for an increase in the domestic Dollar-based reference price of wheat from US$157/ton to US$236/ton.

    In considering the application, it was found that low profitability and diminishing returns affect the long-term sustainability of wheat farming in South Africa and further investment in this field. In arriving at an appropriate level of tariff protection ITAC took into account both the low profitability of farmers and the impact of a rise in bread prices, due to the cost-raising impact of the duty on consumers, in particular the poor.

    In evaluating the application, using the criteria set out below, it was decided that an appropriate level for the domestic reference price would be R215 per ton.

    The following criteria were applied:

    a) Structural changes in the global demand and supply of wheat;

    b) The cost and price differentials between domestically produced wheat and that produced in the major wheat producing countries;

    c) The effect of agricultural subsidies in developed countries;

    d) Profitability of wheat farming and investment returns;

    e) Potential for job creation and increased investment, also in downstream agro-processing industries;

    f) Primary and intermediate input cost structures;

    g) Trade data; and

    h) Full Value chain effects of increased tariffs.

    (2) Aspects of local circumstances that were taken into account are the following:

    a) Rising input costs;

    b) Major differences that exist in the competitive position of the different wheat producing regions;

    c) Lack of self-sufficiency and widening trade deficit in wheat;

    d) The South African Futures Exchange (SAFEX) pricing regime;

    e) The competitive position of wheat farmers within the wheat value chain; their relative pricing power and high cost of certain inputs especially energy and fertilizer (these aspects require an approach on several fronts, not on tariff setting alone);

    f) Impact on consumers, in particular the poor, of an important staple food;

    g) Potential for job creation, given an abundance of unskilled labour;

    h) Transport costs.

    Question 2096

    Ms C M Kotsl (Cope) to ask the Minister of Trade and Industry'

    (l) Whether he has been informed that the high price of steel compared to the price of steel in China has negative effect on the ship building industry: if so what steps has he taken to (a) attain lower steel prices for the ship building industry and (b) provide assistance to ship building to remain in the industry; if not

    (2) Whether he will investigate the viability of the ship building; if not, why not, if so, when?

    RESPONSE

    1. The minister of Trade and Industry is fully informed of SA steel prices as compared to major countries, including China ongoing interactions are taking place between ArcelorMittal SA (AMSA) and the dti in order to make steel prices in SA internationally competitive

    The minister is aware of the effects of high costs steel inputs to the steel consuming industries. Enquires made with the ship building associations indicate, that no formal approach has been made by the ship building associations on the negative effect of low cost Chinese steel pricing on the domestic ship building industry. Similarly no request to provide assistance to ship building companies has been received.

    If such requests are received the dti will investigate in order to find possible solutions within sphere of influence.

    2. Many studies related to the ship building industry have been done in the past and presently no study on the viability of the ship building is being undertaken by the dti. However should a motivated request be received from industry for such a study then it will be considered.

    Normal engagement are taking place between the industry and the dti on a regularly basis. Presently a financial gap analysis is under discussion.

    QUESTION 2095 FOR WRITTEN REPLY

    2095. Ms C M P Kotsi (Cope) to ask the Minister of Trade and Industry:

    Whether the Southern African Customs Union (SACU) has reached an agreement that was acceptable to all parties (details furnished); if not, what (a) were the issues in dispute and (b) implications will these issues have for the future of SACU; if so, what was the nature and extent of the agreement?NW2505E

    Response:

    The question appears to refer to the outcome of the recent Southern African Customs Union (SACU) Heads of State and Government (HoSG) Summit held in Pretoria, 16 July 2010. The Summit re-committed each Member - Botswana, Lesotho, Namibia, South Africa and Swaziland - to advancing the regional integration project in SACU.

    There was a clear recognition that to make this advance, several key areas of work need to be undertaken. Of these, four appear to be central: First, we will need to identify and develop specific interventions that can promote economic diversification and industrialisation across the Member States. Second, it is necessary to broaden and deepen joint work aimed at strengthening cross border infrastructure among the Members to facilitate trade and investment. Third, it was agreed that Members will need to further consider strengthening the revenue sharing arrangement in the customs union. Finally, it was agreed that SACU member states need to approach trade negotiations on the basis of common principles and positions that do not undermine the economic interests of any Member.

    Each of these areas is the subject of our work programme for the coming period. It is important to note that South Africa has assumed the Chair of SACU for the next year and it will be our responsibility to ensure that work on these does indeed advance. Heads of State and Government also agreed that they would continue to give attention to work of SACU and to reconvene in October 2010 to assess the progress made. SACU Members agree that progress in each of these areas is essential to address existing weaknesses in the Union and to strengthen the integration project.

    QUESTION N0 2094

    Ms C M P Kotsi (Cope) to ask the Minister of Trade and Industry:

    Whether he intends introducing amending legislation to regulate telemarketers with the aim of protecting consumers; if not, why not; if so, what are the relevant details? NW2504E

    Response:

    There are already existing legislations within the dti that deals with direct marketing including telemarketers and these are:

    · The National Credit Act (NCA) 34 of 2005 whose section 70 creates a range of obligations on Credit Bureaus for data accuracy, protection of confidentiality, retention periods, sources from which data may be collected and limitations on the purposes for which Credit Bureaus data may be utilised. Credit Bureaus are prevented from sharing confidential information to direct marketers including telemarketers; and

    · The Consumer Protection Act (CPA) 68 of 2008whose section 11 refers to right to restrict unwanted direct marketing to consumers. Section 11 (3) states that the National Consumer Commission may establish, or recognise as authoritative, a registry in which any person may register a pre-emptive block, either generally or for specific purposes, against any communication that is primarily for the purpose of direct marketing. Marketers must offer an "opt out", and it also deals with discriminatory practices which could affect the use of information by marketers.

    Further, the Department is in the process of developing regulations which will be published for public comment before the effective date. The Minister through the regulations will state when consumers may be contacted for purposes of telemarketing.

    Question 2276

    Mr S J F Marais (DA) to ask the Minister of Trade and Industry:

    Whether his department and/or any of its entities has purchased any 2010 Fifa World Cup Soccer tournament (a) clothing or (b) other specified paraphernalia; if not, what is the position in each case; if so, in each case, (i) what are (a a) the details and (bb) the total cost of the items purchased, (ii)(aa) how many items have been purchased and (bb) why, (iii)(aa) to whom has each of these items been allocated and (bb) why have these items been allocated to these persons and (iv)(aa) on what basis was the decision taken to purchase each of these items and (bb) on whose authority was the decision taken to make these purchases?NW2785E

    Response:

    His Department

    The Department did not incur any expenses in respect of clothing or paraphernalia for the 2010 Fifa World Cup Soccer tournament.

    Department's entities

    Name of Agency

    Response

    National Gambling Board

    (NGB)

    NGB did not purchase any of the 2010 Fifa World

    Cup soccer tournament clothing or paraphernalia

    items.

    National Lotteries Board

    (NLB)

    The NLB has purchased 120 soccer jerseys and 4

    tickets @ R16 000,00.

    The soccer jerseys were bought to support Soccer

    Friday and jerseys were allocated to all staff

    members while tickets were allocated to some staff

    members to participate in the World Cup experience.

    This decision was taken by the Executive of the NLB.

    National Metrology Institute of South Africa (NMISA)

    The NMISA did not buy 2010 FIFA World Cup clothing or other items for its stakeholders. However, 200 NMISA branded items were purchased @ R28 000, 00. Forty of the items were allocated to clients and stakeholders as part of marketing campaign while 20 were sold at R150fT-shirt and the profit donated to a charity.

    South African Bureau of Standard (SABS)

    The SABS has purchased the following items:

    - 30 x Replica Bafana Bafana soccer jersey @ R15 788.

    - 20 x buntings. 18 x flags, 15 x displays @ total cost of R32 539. 00

    All soccer jerseys were allocated to bona fide SABS employees who won the competitions. The jerseys were purchased in a bid to create a soccer atmosphere in the work place and to support Football Fridays.

    All display items remain the property of SABS and were not given to anyone. The SABS executive Committee approved the purchase of all items mentioned above.

    South African National Accreditation Standards (SANAS)

    SANAS has not purchased any clothing or paraphernalia as per a SANAS management decision.

    Estate Agency Affairs Board (EAAB)

    The EAAB did not purchase any items in respect of the 2010 Fifa World Cup Soccer tournament

    National Credit Regulator (NCR)

    The NCR purchased 101 Bafana Bafana T-shirt @ R60 595. 00.

    The T-shirts were purchased to promote patriotism and team spirit within NCR and were allocated to staff members only. The decision was taken by the HR committee to support the "Soccer Friday" initiative.

    National Consumer Tribunal (NCT)

    The NCT did not purchase any clothing or other specific paraphernalia during the 2010 FIFA world Cup or during the financial year ended 31 March 2010.

    National Empowerment Fund (NEF)

    The NEF supported the involvement of its staff in the Soccer Friday campaign as a lead up to the launch of the World Cup and promoted the wearing of SA national team supporters jerseys on Fridays by NEF staff.

    In order to assist staff who were unable to afford purchasing a SA national team jersey, the NEF agreed to sponsor jerseys for staff below an identified job grade. A total of 35 jerseys were acquired for this purpose at a total cost of R 19 000.00 as disclosed in note 25 to the NEF 2010 Annual Report. The final undertaking of this initiative was sanctioned by the Executive of the NEF.

    Companies and intellectual Property Registration Office (CIPRO)

    CIPRO did not purchase any clothing during the FIFA World Cup Soccer tournament.

    Paraphernalia purchased included: 100 soccer balls, 14 vases, 32 big flags and 900 small flags @ R35 989, 80. The items were purchased to support South Africa hosting the event and to uplift the morale of CIPRO staff. The items were not allocated to a particular person, but belong to the organization. The acting CEO of CIPRO approved the purchase of the items

    National Regulatory for Compulsory Specifications (NRCS)

    The NRCS has purchased 350 branded NRCS scarves for the FIFA World Cup @ R35 666.61.

    The scarves were allocated to NRCS staff. The scarves were bought to support the SA Team during the FIFA World Cup. The purchase was authorized by the Chief Executive Officer (CEO) of the NRCS.

    Export Credit Insurance Corporation of South Africa (ECIC)

    The ECIC purchased South African Team T-shirt (replica) and the following people benefited (i) Directors: 10 T-shirts @ R6 000,00 and (ii) Staff: 44 T-shirts @ R9 000,00

    The T-shirts were bought to support football Friday. The Executive Management took the decision.

    Small Enterprise Development Agency (SEDA)

    Seda has purchased 100 jerseys, 35 scarves and 35 jackets @ R8O 025, 00. Promotional items, 12 banners, 12 Vuvuzelas, 12 Mugs, 20 Flags @ R12 O00, 00.

    The items above were allocated to the following individuals (i) Staff members through an internal competition (ii) Board members and Executives.

    The items were allocated to motivate staff, recognise the Board members and create and support the World Cup as well as observe Football Fridays.

    The decision was based on the National Call that as a host count we should all support the World Cup.

    QUESTION N0 2041

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    (1) What has been the total cost of consultants and other external service providers to the Companies and Intellectual Property Registration Office (Cipro) (a) in the (i) 2007-08, (ii) 2008-09 and (iii) 2009-10 financial years and (b) during the period 1 April 2010 up to the latest specified date for which information is available for (aa) accounting and (bb) computer-related services;

    (2) what percentage of Cipro's total wage budget for full-time staff on all levels is allocated for accounting and computer-related functions;

    (3) whether any of these services are of a continuous or repetitive nature; if so, on what basis is it deemed more beneficial to the organisation to make use of external service providers rather than full-time staff? NW2436E

    Response:

    (1)(a)(i)-(iii)(aa)-(bb)(b) According to Cipro the total costs on consultants and other external service providers for accounting and computer-related services are as follows:

    Year

    2007/08

    2008/09

    2009/10

    1 April 2010 to 31 July 2010

    aa) Accounting Services

    1. Consultant and External Service providers

    R2 572 660

    R863 714

    R1 243 468

    R239 734

    bb) Computer related services

    Consultant and External Service providers

    R30 653 085

    R31 547 975

    R21 028 548

    R2 181 226

    (2) According to Cipro the percentage of total wage budget allocation for full-time accounting and computer-related staff is as follows:

    Description

    Actual

    2009/2010

    Budget

    2010/2011

    % of Employee cost - Finance

    7.48 %

    6.11%

    % of Employee cost – ICT

    7.17%

    8.48%


    (3) According to Cipro the split for continuous and repetitive services is as follows:

    Year

    2007/08

    2008/09

    2009/10

    1 April 2010 to 31 July 2010

    aa) Accounting Services

    · Consultant and External Service providers

    o Annual accounting system support – Continuous

    o Ad hoc year end support

    o Consultant seconded as CFO – Not recurring

    o Annual accounting system support – Continuous

    o Ad hoc year end support

    o Annual accounting system support – Continuous

    o Ad hoc year end support

    o SCM structure and process re-engineering by external service provider – Not recurring

    o Annual accounting system support – Continuous

    o The need to appoint external service providers on an ad hoc basis relate mainly to Audit firms that assist the Finance Division with technical advice on compliance to the relevant accounting standards and these service are not required on a full time basis.

    o Assistance from an external service provider is required on a continuous basis to support the ACCPAC accounting system, as in-house expertise is not available.

    bb) Computer related services

    2007/08

    2008/09

    2009/10

    1 April 2010 to 31 July 2010

    · Consultant and External Service providers

    · The approved organisation structure did not provide for sufficient capacity to successfully operate an ICT division. The following roles were not reflecting in the approved structure and these are critical for the running on the ICT division hence services were required.

    Consultants & External service providers were used for the following functions:

    o Applications

    o IT Security

    o Business Analysis

    o Network database admin

    · The approved organisation structure did not provide for sufficient capacity to successfully operate an ICT division.

    Consultants & External service providers were used for the following functions:

    o Applications

    o IT Security

    o Business Analysis

    o Network database admin

    · In order to stabilize, secure and modernize CIPRO systems external expertise had to be appointed.

    Consultants & Service providers were used for the following functions:

    o Applications

    o IT Security

    o Business Analysis

    o Network database admin

    · CIPRO in 2009/10 started to appoint permanent staff after the revised organisational structure was approved.

    · 30 of the approved 35 vacancies in terms of the new structure have been filled.

    · Project management consultants were appointed to assist the organisation with the implementation of various projects to stabilize, secure and modernize CIPRO systems, these consultants will be retained for the period of the specific project.

    QUESTION NO 1980

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    Whether, with reference to the management and information technology (IT) problems at the Companies and Intellectual Property Registration Office (Cipro) and the resultant complaints by clients, these problems are being monitored; if not, why not; if so, (a) how (i) are the problems monitored and (ii) often are they monitored, (b) what are the results of the monitoring over the past year, (c) when are improvements in the availability and speed of the Cipro website envisaged and (d) what impact does the problems have on the timeline for (i) the migration of Cipro to a commission and (ii) the implementation of the Companies Act, Act 71 of 2008?NW2375E

    Response:

    (a)(i) According to Cipro they are being monitoring through a complaints register. individual emails, calling clients and the escalation mechanism.

    (a)(ii) According to Cipro registers are maintained daily and emails are followed up every day.

    (b) According to Cipro it is difficult to quantify as complaints change according to issues clients may be experiencing. However. some changes in the systems were done to accommodate and handle issues raised.

    (c) According to Cipro. speed and availability were improved from April 2010 and additional capacity was implemented on the website to cater for increased volumes in the interim.

    (d)(i)-(ii) According to Cipro the current system is being evaluated to determine what needs to be done in preparation for the migration to the Commission and the implementation of the new Act.

    QUESTION NO 1900

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    (1) Whether, with reference to the two senior Companies and Intellectual Property Registration Office (Cipro) officials who were suspended as a result of findings of a forensic audit and as confirmed at the Standing Committee on Public Accounts meeting held on 18 May 2010, they have been criminally charged; if not. why not; if so, what are the relevant details;

    (2) Whether they had their suspension lifted; if not, what is the position in this regard; if so, what are the relevant details;

    (3) Whether, in light of the fact that only three of the seven officials of the Cipro Executive Team are currently in office, any steps have been taken to strengthen the Cipro Executive Team; if not, why not; ifso, what are the relevant details? NW2286E

    Response:

    (1) All criminal matters have been referred to the relevant criminal enforcement and other specialized agencies.

    (2) No suspensions have been lifted and the matter is proceeding in terms of an internal disciplinary procedures.

    (3) CIPRO is in transition to form part of the new Companies and Intellectual Property Commission and as such, proper transitional arrangements are being made. So far, we have assigned the Chief Information Officer (CIO) of the department of trade and industry to act in the position of the CIO at CIPRO to ensure that CIPRO systems are not compromised by the absence of the CIO. There is an acting Chief Executive Officer and the Director-General is monitoring strategies and operations closely.

    QUESTION NO 1899

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    (1) What were the costs of the (a) audit by the Auditor-General and (b) forensic investigation by a certain group (name furnished) regarding the procurement process for the enterprise content management tender by the Companies and Properties Registration Office (Cipro);

    (2) whether reports with the findings of the (a) audit and (b) forensic investigation have been received by his department; if not, why not; if so, when;

    (3) when were the invoices for the audit and the investigation settled;

    (4) which entity of his department paid for the services of the (a) Auditor-General and (b) forensic investigation by the said group?NW2285E

    Response:

    (1)(a)-(b) Costs for audit by the Auditor-General were R697 580.00 and for the forensic investigation were R998 814.00.

    (2)(a)-(b) The reports were formally presented on 20 April 2010 and 19 March 2010 respectively.

    (3) Cipro invoices were settled in July 2010 (different payments made from August 2009 to July 2010) and the department of trade and industry invoice was paid on 10 May 2010, with additional amount still to be paid for additional tasks that were necessary to complete the investigation.

    (4)(a)-(b) Cipro paid for the services of the Auditor-General and the department of trade and industry paid for the forensic investigation.

    QUESTION NO 1898

    Mr A P van der Westhuizen (DA) to ask the Minister of Trade and Industry:

    (1) Whether any action has been taken to recoup the almost R 100 million paid by the Companies and Properties Registration Office (Cipro) to a certain company (name furnished) before the contract was cancelled; if not, why not; if so, what are the relevant details;

    (2) whether any action has been taken to ensure that the very sensitive company information to which the abovementioned company had access will be protected and not shared with unauthorised parties: if not, why not; if so, what are the relevant details:

    (3) (a) when will the enterprise content management project be put out on tender again and (b) what steps have been taken to avoid a recurrence of the irregularities in the procurement process as pointed out by the Office of the Auditor-General? NW2284E

    Response:

    (1) The matter is handled through a legal process which Parliament will be briefed on in due course.

    (2) This matter is handled through a legal process and Parliament will be briefed on this in due course. However, it is important to note that terms of the contract entered into with the company has specific confidentiality provisions in regard to matters related to this project.

    (3) This matter is still subject to a court process and Parliament will be briefed on it in due course. The department of trade and industry is paying more attention to adherence to procurement procedures in all the areas of procurement to prevent irregularities .