ATC140331: Report of the Portfolio Committee on Trade and Industry on its activities undertaken during the 4th Parliament (May 2009 – March 2014), adopted on 12 March 2014

Trade and Industry

(The following report replaces the Report of the Portfolio Committee on Trade and Industry which was published on page 1698 in ATC No 33 dated 20 March 2014)

Report of the Portfolio Committee on Trade and Industry on its activities undertaken during the 4th Parliament (May 2009 – March 2014), adopted on 12 March 2014

Executive summary

1. Committee’s focus areas during the 4 th Parliament

1.1 Industrial Policy

The revised Industrial Policy Action Plan (IPAP2) was an organised effort to stem deindustrialisation and the decline of the manufacturing sector. It was a shift towards the growth of a developmental economy designed to accelerate employment creation.

The Portfolio Committee on Trade and Industry became aware of the developments within the steel and iron ore industry and the potential impact it may have on various related value chains including those sectors mentioned above. As the IPAP2 is in its implementation phase, the committee – as part of its oversight responsibility – provided a forum for the major industry players to discuss the issues at stake. A major concern for the committee was the potential impact it would have on downstream industries and the key objectives of IPAP2 – the expansion of the manufacturing base and job creation, as well as job security. Monopolistic pricing of key inputs remains an obstacle in the manufacturing sector and therefore a potential obstacle to Government in achieving its developmental agenda.

A developmental steel price that would underpin the IPAP2 objectives becomes critical. An Inter-Departmental Task Team on Iron Ore and Steel was established to design set of inter-related policy instruments policy instruments to give effect to government efforts to secure a developmental iron ore and steel price in support of downstream, value-adding industries of the manufacturing sector. Cabinet has agreed to a range of instruments designed to secure developmental iron ore and steel prices.

During its continued oversight over the implementation of IPAP, it came to the committee’s attention that high administered prices could potentially derail the implementation of IPAP. In response, the committee held a colloquium with relevant stakeholders related to electricity charges and port tariffs to find a solution. As a result of this engagement, Transnet announced that it would review its port tariff structure to support industrialisation and the export of value-added goods.

1.2 International and Regional Trade Relations

South Africa developed its first formal draft trade policy and strategy document, “A South African Trade Policy and Strategy Framework”, in 2010. Its trade policy was contextualised within the government’s broader economic development vision and to achieve the imperatives of the National Industrial Policy Framework.

As part of a broader consultative approach of the Department of Trade and Industry (DTI), a request was received by the committee to express an opinion on the Trade Policy and Strategy Framework to ensure that Parliament’s views could be incorporated into the final document. The committee welcomed this opportunity and process as it allowed it to study the “Discussion Document” and engage stakeholders openly on the future path of South Africa’s trade policy to ensure more equitable results.

Other activities included the committee’s participation at international trade fora, such as the 8 th and 9 th World Trade Organisation’s (WTO) Ministerial Meetings, the 5 th BRICS (Brazil, Russia, India, China and South Africa) Summit, and the International Astronautical Federation’s (IAF) Meeting for Parliamentarians. The committee’s participation at these fora has contributed to its understanding of trade and other related matters and allowed it to offer support to the Minister at these fora. It also provided committee members with a platform to engage with their international counterparts and to actively participate in the domestic and international debate. However, participation should be expanded to include oversight over other trade and investment-related matters, such as trade fairs or pavilions, through oversight visits abroad. This would ensure that the committee is able to oversee the effective use of the financial resources allocated to these activities and to understand the investment mechanisms being leveraged.

1.3 Legislation processed

The Speaker made 12 referrals to the committee in relation to 11 bills, nine executive bills and 2 private member’s bills. The 12 th referral was due to the fact that the Intellectual Property Laws Amendment Bill was referred back to the National Assembly by the President of the Republic of South Africa in terms of section 79(1) of the Constitution, as he had reservations about the constitutionality of the Bill. These reservations related to the non-referral of the Bill to the National House of Traditional Leaders and that the Bill should have been dealt with in terms of section 76 of the Constitution. The committee considered and processed these 11 pieces of legislation during the 4 th Parliament. Eight bills were adopted by the committee with significant amendments. Two of these pieces of legislation were redrafted by the committee, namely the Intellectual Property Laws Amendment Bill and the two Co-operatives Amendment Bills which were combined into one bill.

The Broad-Based Black Economic Empowerment and the National Credit Amendment Bills attempt to accelerate the transformation of the South African economy. The committee effectively scrutinised these pieces of legislation to ensure that this is achieved.

The Special Economic Zones Bill aimed to improve on the industrial development zones (IDZ) programme introduced in 2000. The Bill was motivated by the need to urgently address challenges within the broader framework of accelerating industrial development, economic growth and job creation. The Bill allows for the designation of different types of special economic zones.

1.4 Gambling Review Commission (GRC) Report

During the committee’s consideration of the Interactive Gambling Regulations, it became aware of the potential challenges within the gambling industry due to technological advances. This led to it embarking on public hearings on the following:

· the socio-economic impact of legalised gambling,

· the impact of misleading advertising,

· the regulation of cross-border gambling,

· the current regulatory environment, and

· interactive gambling.

The committee expressed a view that the socio-economic impacts of legalised gambling were inadequately represented and appeared to be biased in favour of the gambling industry. Therefore, it was critical for the committee to have more detailed socio-economic information in this regard to make appropriate recommendations in regard of the future development of gambling legislation.

The Department of Trade and Industry (DTI) announced that it was establishing a Gambling Review Commission to investigate the socio-economic impacts of legalised gambling as well as the status of the gambling industry and new forms of gambling.

The committee received the GRC’s Report and established a subcommittee to consider the report and make recommendations to it. The subcommittee tabled its report for the committee’s consideration on 7 March 2012. The DTI in response to the committee report tabled the Lotteries Amendment Bill which addresses some issues raised. Further legislative initiatives with respect to the gambling industry are expected to be tabled in the 5 th Parliament.

1.5 Budgetary oversight

The committee has been tabling Budget Review and Recommendation Reports (BRRR) in terms of the Money Bill Procedures and Related Matters Amendment Act since 2010. The process of developing a BRRR involves overseeing the DTI’s financial and non-financial performance over an 18 month period. The committee engaged in regular quarterly financial and non financial performance meetings with the DTI, as well as a selection of its entities, over and above the required oversight of the budget and strategic plans and annual plans.

2. Key areas for future work

· Effectiveness of IPAP/industrialisation efforts and incentives.

· Oversight over ongoing trade relations, implementation of existing agreements and the promotion and protection of investment.

· Oversight over the establishment of new entities and the role-out of expanded mandates.

· Consumer protection and the implementation of the consumer protection and National Credit Act.

· Update on the committee’s GRC recommendations.

· Strengthening of the BRRR process.

3. Key challenges emerging

· There is an over-reliance on the reporting by the DTI and entities’ to determine their performance and level of service delivery. Public participation, especially in terms of areas of regulation and broadening participation, should be leveraged to strengthen the oversight process.

· Historically, the DTI’s entities have had a record of good governance and financial management. However; recently, a number of entities, especially newly-established entities, have started to show challenges with respect to maintaining good governance and financial management systems. This may be due to insufficient monitoring by the DTI.

· Inaccessibility of information, such as international agreements, policies and strategies, in the public domain is a serious concern.

· A challenge that remains is that the committee is not always sufficiently informed about (1) existing international obligations and developments at international institutions, e.g. the World Intellectual Property Organisation, (2) policy developments and (3) task teams within South Africa that affect the work of the DTI. This has resulted in situations where seemingly incoherent or conflicting policies have been adopted.

· The committee tends to receive late correspondence with regard to important conferences being hosted by the DTI or its entities. These conferences provide a wealth of insight into areas that the committee oversees and are invaluable to attend.

· Implementation of the Industrial Policy Action Plan has been hampered by constraints arising from uncoordinated approaches among departments that have led to a rise in the cost of doing business.

· The National Consumer Commission had received a qualified audit report for the 2012/13 financial year due to lack of documentation of certain procurement activities, which were allegedly stolen from its office. This is expected to remain a challenge during future audits for a number of years.

· There has been a lack of cohesion in the implementation of national gambling policy among national and provincial gambling authorities, which has not been resolved within these five years. Furthermore, transformation within the horse-racing industry has been slow with grooms being one of the few stakeholders in the industry not being officially recognised.

· There have been incidents where critical concepts have been insufficiently defined by the DTI or it was unclear what the intended structure and roles of implementing agencies were within new legislation. This has led to unnecessary confusion among Members and the DTI when deliberating on legislation and time delays.

· There is usually insufficient time available to interrogate the impact of international agreements and engage with other affected stakeholders before the committee recommends the agreement for ratification.

· Implementation of the Agreement between the Government of the Republic of South Africa and the Government of the Republic of Cuba on Economic Assistance has been hindered mainly due to the economic embargo on Cuba.

4. Recommendations

The committee in the 5 th Parliament should consider:

· Intensifying public participation especially in terms of the thematic areas of regulation and broadening participation to assess the accessibility of the DTI and its entities and the quality of services delivered, as well as the effectiveness of protection offered to consumers and distressed businesses.

· Allocating a portion of its budget to enable members and/or staff to attend important conferences that would enhance the committee’s oversight role.

· Requesting the DTI and its entities to submit written quarterly performance reports.

· Commissioning independent research on the effectiveness of IPAP and the DTI’s incentive programmes.

· Requesting the Minister to provide a status report on the implementation of the recommendations of the Inter-departmental Task Team on Iron Ore and Steel.

· Encouraging the consolidation of the boards of technical infrastructure institutions into a single board to ensure coordination between these institutions.

· Developing a process for active participation during the negotiating phase of key trade agreements.

· Requesting that the committee be allowed to exercise it oversight more effectively in relation to trade-related matters, such as trade fairs or pavilions, through oversight visits abroad,

· Requesting the Minister to table a report on the facilitation process between the grooms and other horse-racing stakeholders to address issues of transformation.

1. Introduction

1.1 Functions of committee

Parliamentary committees are mandated to:

· Oversee the financial and non-financial performance of government departments and their entities to ensure that national objectives are met.

· Process and pass legislation.

· Facilitate public participation in Parliament relating to issues of oversight and legislation.

1.2 Committee Strategic Plan

At the beginning of its tenure, the committee developed a Strategic Plan for 2009/10 – 2013/14. It agreed on a vision and mission for the period under review. The committee’s vision was to be an effective and efficient committee that initiates and processes legislation and exercises monitoring and oversight with an emphasis on the effective implementation of industrial policy to drive trade policy imperatives, thereby creating an enabling environment for economic development, equity and the consolidation of a non-racial, non-sexist, prosperous, democratic developmental state for job creation.

The committee’s mission was to:

§ Ensure that the real economy grows through oversight over the development and implementation of trade policy within the context of the industrial policy arena.

§ Ensure equity through economic empowerment and transformation.

§ Contribute to good governance.

§ Advance domestic, continental and international trade links.

§ Promote regional integration.

§ Ensure broader public participation.

§ Co-ordinate and co-operate with other related parliamentary committees.

This culminated into six strategic objectives covering the functions of the committee, which are as follows:

· The r efinement of the legislation process;

· Improving oversight over the institutions falling under its portfolio area as well as on the implementation of its legislation;

· Dealing with International and Regional Trade Relations;

· Improving the knowledge and skills of its members to deal with the complex, technically demanding matters placed before the committee;

· Dealing with matters of public interest; and

· F acilitating co-operative governance.

The details of the mechanisms to achieve each of these strategic objectives are outlined in the committee’s Strategic Plan.

1.3 Method of work of the committee

In order to achieve its objectives, the committee developed annual plans. The annual plans outlined the specific oversight programmes determined by the committee for that year. Due to its heavy workload, the committee agreed that it would select a number of entities to consider during the strategic plan and annual report processes.

Furthermore, the committee opted to establish temporary multi-party “sub-committees” to work through controversial and/or technical bills or topics more intensively and to propose recommendations to the broader committee. This assisted by ensuring that these issues were processed in the most efficient and effective manner. Where necessary, the committee also procured the services of experts and/or advisors to assist with the processing of technical legislation.

The fourth Parliament of the Republic of South Africa took a decision that at least two portfolio committee meetings should be held at venues outside of the parliamentary precinct annually. This is to enhance public participation and to fulfil one of its strategic objectives of taking “Parliament to the People”. In line with this decision, the committee held public meetings in Atlantis (Western Cape), Umtata (Eastern Cape), Sedibeng (Gauteng), Kathu (Northern Cape), Nelspruit (Mpumalanga), and Durban (KwaZulu-Natal) over its tenure.

In terms of budgetary oversight, the new Money Bills Amendment Procedure and Related Matters Act (No. 9 of 2009) sets out the process for Parliament to make recommendations to the Minister of Finance to amend the budget of a national department. In October of each year, portfolio committees must compile Budgetary Review and Recommendation Reports (BRRR) that assess a department’s service delivery performance given available resources, evaluate the effective and efficient use and forward allocation of resources, and may make recommendations on the forward use of resources.

1.4 Department/s and Entities falling within the committee’s portfolio

The Portfolio Committee on Trade and Industry oversees the work of the Department of Trade and Industry and its entities. This section provides an overview of the core mandates of the Department and its entities, as well as entities that will be established due to recent legislative amendments and/or new legislation that has been passed during this Parliament.

It should be noted that at the beginning of the term, an additional seven entities reported to the Department. Six of these were transferred to the Economic Development Department during the 2009/10 financial year. These were the: (i) Competition Commission, (ii) Competition Tribunal, (iii) Industrial Development Corporation (IDC), (iv) International Trade Administration Commission (ITAC), (v) Khula Enterprise Finance Ltd and (vi) South African Micro-Finance Apex Fund (SAMAF). However, due to the crucial role that these played in enabling certain departmental functions, the Minister and the Department has maintained close working relations with these entities. The Estate Agency Affairs Board was the seventh entity to be transferred from the DTI. It was transferred to the Department of Human Settlements during the 2012/13 financial year.

1.4.1 Department of Trade and Industry

The Department’s core mandate is to:

· Provide leadership to the South African economy through its understanding of the economy, and its knowledge of economic opportunities and potential.

· Act as a catalyst for the transformation and development of the economy and to respond to the challenges and opportunities of economic citizens, in order to support the government’s economic goals of growth, employment and equity.

· Respond to the challenges and opportunities in the economy and society.

· Provide a predictable, competitive, equitable and socially responsible environment for investment, enterprise and trade.

It has pursued this mandate through five themes aligned to its five strategic objectives, namely:

· Industrial Development : Facilitate transformation of the economy to promote industrial development, investment, competitiveness and employment creation.

· Trade, investment and exports : Build mutually beneficial regional and global relations to advance South Africa’s trade, industrial policy and economic development objectives.

· Broadening participation : Facilitate broad-based economic participation through targeted interventions to achieve more inclusive growth.

· Regulation : Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner.

· Administration and co-ordination : Promote a professional, ethical, dynamic, competitive and customer-focused working environment that ensures effective and efficient service delivery.

1.4.2 Entities

Name of Entity

Role of Entity

Companies and Intellectual Property Commission (CIPC), a merger between the former Company and Intellectual Property Registration Office and the Office of Company and Intellectual Property Enforcement

Registers businesses, intellectual property rights and other juristic persons such as cooperatives, maintains related registries and develops information for disclosure to stakeholders, promotes compliance and enforces the Companies Act, particularly in areas such as receiving and initiating complaints regarding alleged contraventions and investigating relevant complaints and financial reporting standards. In addition, it promotes education and awareness regarding company and intellectual property laws and related matters.

Companies and Intellectual Property Tribunal (CIPT)

Adjudicates in relation to any application that may be made to it, and makes any order as provided for in the Companies Act in respect of such an application. In addition, the Tribunal may serve as a forum for voluntary alternative dispute resolution.

Export Credit Insurance Corporation of South Africa (ECIC)

Facilitates and encourages South African export trade by underwriting bank loans and investments outside the country in order to enable foreign buyers to purchase capital goods and services from the Republic.

National Consumer Commission (NCC)

Investigates complaints and refers them to courts or the National Consumer Tribunal for prosecution; issues compliance notices and conducts awareness and education compliance campaigns in relation to consumer matters.

National Consumer Tribunal (NCT)

Adjudicates on applications under the National Credit Act by consumers, credit providers, debt counsellors and the National Credit Regulator, as well as on matters relating to allegations of prohibited conduct referred by the National Credit Regulator. In addition, the Tribunal adjudicates on cases referred to it by the NCC under the Consumer Protection Act (No. 68 of 2008).

National Credit Regulator (NCR)

Regulates the South African credit industry. Its functions include education, research, policy development, registration of industry participants, investigation of complaints, and ensuring enforcement of the National Credit Act.

National Empowerment Fund (NEF)

Enables, develops, promotes and implements innovative investment and transformation solutions to advance sustainable black economic participation. It is therefore a catalyst of Broad-based Black Economic Empowerment in South Africa.

National Gambling Board (NGB)

Is responsible for upholding the integrity, viability and sustainability of the gambling industry by promoting uniform national norms and standards for provincial authorities.

National Lotteries Board (NLB)

Regulates the National Lottery and all other lotteries in South Africa and administers the National Lotteries Distribution Trust Fund.

National Metrology Institute of South Africa (NMISA)

Maintains primary scientific standards of physical quantities, certifies reference materials and performs referee analysis in cases of measurement disputes to ensure accurate measurement in South Africa. It also provides internationally recognised measurement standards and measurement services, which provide for the local use of measurement and derived units of the International System of Units (SI).

National Regulator for Compulsory Specifications (NRCS)

Administers (i) the National Regulator for Compulsory Specifications (No. 5 of 2008), (ii) the Trade Metrology (No. 77 of 1973) and (iii) the National Building Regulations and Building Standards (No. 103 of 1977) Acts, as well as other regulations that fall under other departments as far as they relate to compulsory standards to protect human health, safety and the environment and ensure fair trade, in accordance with government policies and guidelines.

Small Enterprise Development Agency (SEDA)

Supports small business development in South Africa, particularly in rural areas. Its mandate is designing and implementing a standard national delivery network that must uniformly apply throughout the country.

South African Bureau of Standards (SABS)

Promotes and maintains standards and quality assurance in connection with commodities and the rendering of services.

South African National Accreditation System (SANAS)

Formally recognises the competency of laboratories, certification bodies, inspection bodies, proficiency testing scheme providers and good laboratory practice (GLP) test facilities to carry out specific tasks.

The following new entities will be established based on recent legislative amendments:

Name of entity

Role(s) of entity

Date for establishment

Broad-based Black Economic Empowerment (BBBEE) Commission

The BBBEE Commission will be responsible for:

· Overseeing, supervising and promoting adherence with this Act.

· Strengthening and fostering collaboration between the public and private sector in order to promote and safeguard the objectives of BBBEE.

· Receiving complaints relating to BBBEE.

· Investigating, either of its own initiative or in response to complaints received, any matter concerning BBBEE.

· Promoting advocacy, access to opportunities and educational programmes and initiatives of BBBEE.

· Maintaining a registry of major BBBEE transactions, above a threshold determined by the Minister.

· Receiving and analysing such reports as may be prescribed concerning BBBEE compliance from organs of state, public entities and private sector enterprises.

· Promoting good governance and accountability by creating an effective and efficient environment for the promotion and implementation of BBBEE.

· Increasing knowledge of the nature and dynamics and promote public awareness of matters relating to BBBEE.

September 2014

Co-operatives Development Agency

The Co-operatives Development Agency’s objectives are to:

· Support, promote and assist with the development of co-operatives.

· Provide financial and non-financial assistance to co-operatives.

· Provide business support services, including pre-registration support, registration, business plan development, mentorship and after-care to co-operatives, as well as access to market services to co-operatives.

· Provide education and training to co-operatives.

· Provide access to information regarding all products, programmes and services available to co-operatives.

· Research any matter affecting the effective, efficient and sustainable functioning of co-operatives and the co-operatives organised sector.

· Refer information on co-operatives that the Agency has supported to the Tribunal in the event that such support was not successful.

· Carry out the independent review reports on behalf of the qualifying primary co-operatives and ensure such co-operatives submit these reports to the registrar.

· Develop and maintain data on co-operatives in partnership with the registrar, relevant national and provincial departments, municipalities and other role players.

September 2014

Co-operatives Tribunal

Their main responsibilities will be to:

· Adjudicate in respect of any application made in terms of the Act relating to challenges faced by co-operatives in relation to decisions by the registrar regarding matters such as registration and de-registration of co-operatives.

· Assist in respect of conflict or dispute resolution matters referred to it.

· Assist in respect of the process, reference, and processing of the requested dissolution, winding-up or liquidation of a cooperative.

· Assist with the enforcement of and compliance with the provisions of this Act.

· Assist the Registrar of cooperatives to maintain and update the cooperative database and registration database.

· Provide technical support in respect of any matter pertaining to a co-operative that has been transferred to it by the Agency regarding to dispute and conflict resolution.

· Have regard to international developments in the field of co-operative law

· Refer matters pertaining to a cooperative that has been transferred to it by Agency for Judicial management in accordance to the Act.

September 2014

National Council for Indigenous Knowledge

The National Council will report directly to the Minister. It will be responsible to:

· Advise the Minister on any matter concerning indigenous cultural expressions or knowledge;

· Advise the registrars of patents, copyright, trade marks, and designs on any matter relating to the registration of indigenous cultural expressions or knowledge.

· Advise the Minister on matters relating to traditional performances.

· Advise on the integrity of a database of intellectual property in relation to indigenous cultural expressions or knowledge.

· Refer any dispute received to an appropriate adjudication institution.

· Recommend to the Minister appropriate measures to ensure the effective implementation of the Act in relation to all matters pertaining to indigenous cultural expressions or knowledge relating to performers’ rights, copyright, trade marks, designs and patents.

December 2014

National Trust for Indigenous Knowledge

The National Trust will be responsible to:

· Promote and preserve indigenous cultural expressions and knowledge, including (i) the commercialisation and exploitation of indigenous cultural expressions or knowledge for the purpose of generating income; (ii) facilitating the development of indigenous communities with respect to training on and awareness of their intellectual property and associated rights; and (iii) assisting indigenous communities in the application of this Act and other legislation dealing with indigenous cultural expressions or knowledge.

· Establish a Fund to be known as the National Trust Fund for Indigenous Knowledge.

· Administer the Fund and may invest monies received from the commercialisation of indigenous cultural expressions or knowledge or otherwise, pending the distribution thereof.

December 2014

National Lotteries Commission

The National Lotteries Board will form the basis for the establishment of the National Lotteries Commission. The Commission’s functions will also include:

· Conducting research on worthy good causes that may be funded without lodging an application and inviting applications for grants from worthy good causes.

· Promoting public knowledge and awareness regarding lotteries and the process for applications for grants.

· Managing the staff, and its financial, administrative and clerical functions.

· Exercising any other function as delegated or directed by the Minister or the board.

September 2014

Special Economic Zones (SEZ) Advisory Board

The SEZ Advisory Board will be responsible to:

· Advise the Minister on policy and strategy in order to promote, develop, operate and manage Special Economic Zones.

· Monitor the implementation of the SEZs policy and strategy and report to the Minister on an annual basis on the implementation of such policy and strategy.

· Consider an application for designation as a SEZ and recommend to the Minister whether or not to approve the application and grant a SEZ licence to the applicant.

· Consider an application for an operator permit and recommend to the Minister whether or not to approve the application.

· Consider an application for the transfer of an operator permit and recommend to the Minister whether or not to approve such application with or without any condition.

· Liaise with licensees and operators on the implementation of the SEZ strategic plans.

· Report in the prescribed manner to the Minister on progress relating to the development of SEZs.

· Recommend to the Minister whether or not to approve the decision by an operator to locate a new investor in the SEZ.

· Advise the Minister on initiatives to market SEZs.

· Assess and review the success of SEZs in promoting economic growth and exports.

· Conduct investigations on any matter arising out of the application of this Act.

December 2014 (will be confirmed upon promulgation)

1.5 Purpose of the report

The purpose of this report is to provide an account of the committee’s work during the 4 th Parliament and to inform the members of the 5 th Parliament of key outstanding issues pertaining to the oversight and legislative programme of the Department of Trade and Industry and its entities.

This report provides an overview of the activities the committee undertook during the 4 th Parliament, the outcome of key activities, as well as any challenges that emerged during the period under review and issues that should be considered for follow up during the 5 th Parliament. It summarises the key issues for follow-up and concludes with recommendations to strengthen operational and procedural processes to enhance the committee’s oversight and legislative roles in future.

2. Key statistics

The table below provides a statistical overview of the committee’s activities. This includes the number of meetings held, legislation and international agreements processed and the number of oversight trips and study tours undertaken by the committee, as well as any statutory appointments the committee made, during the 4 th Parliament. These are discussed in further detail in the sections below.

Activity

2009/10

2010/11

2011/12

2012/13

2013/14

Total

Meetings held

48

54

51

56

74

283

Referrals in terms of legislation

None

2

1

4

5

12

Oversight trips undertaken

1

1

1

None

None

3

Study tours undertaken

None

1

1

None

None

2

International agreements processed

2

2

None

2

1

7

Statutory appointments made

1

None

None

None

None

1

Attendance of International conferences

1

1

2

1

1

6

The table below provides an overview of the core outcomes of the committee’s activities in achieving its strategic objectives.

Strategic objectives

Outcomes

Refinement of legislation submitted for processing

· All legislation referred to the committee for the period under review was significantly amended. Two pieces of legislation, the Companies Amendment Bill and the Intellectual Property Laws Amendment Bill were redrafted by the committee.

· The Broad-Based Black Economic Empowerment and the National Credit Amendment Bills attempt to accelerate the transformation of the South African economy. The committee effectively scrutinised these pieces of legislation to ensure that this is achieved.

· Public participation was enhanced through the effective use of print, radio and social media that elicited significant submissions on legislation therefore enhancing the legislative process.

· The period under review saw a significant increase in the number of submissions received on legislation with the committee providing sufficient opportunities for public involvement.

· Although the committee did not initiate any legislation, two of its Members submitted Private Member’s Bills for consideration.

The committee significantly refined legislation, enhanced public participation in the legislative process, and was the first committee to consider Private Member’s Bills.

Improvement of its oversight over the institutions falling under its Portfolio area

· For the period under review the committee developed mechanisms to enhance its oversight over entities falling under its portfolio. Public engagements and oversight visits were undertaken in the execution of its oversight responsibilities.

· The committee took an informed decision that it would annually determine the entities under review to ensure more detailed oversight.

· The committee received regular quarterly reports on the financial and non-financial performance of the DTI as well as the entities under review. In the 5 th Parliament, the committee should receive quarterly financial and non-financial performance reports for all entities in writing regardless of whether these are under review for a particular financial year.

· Through these regular engagements, the committee was able to effectively monitor the trends in relation to the budget and service delivery of entities and were, in the cases of the NCC, CIPC and NRCS, able to immediately engage them to raise the committee’s concerns.

· The committee also effectively monitored the implementation of the Industrial Policy Action Plan (IPAP) through annual reports and engagements. Three sets of public hearings were also scheduled in relation to IPAP which resulted in the tabling of three IPAP-related reports.

· During its oversight over the implementation of IPAP, it came to the committee’s attention that high administered prices could potentially derail the implementation of IPAP. In response, the committee held a colloquium with relevant stakeholders related to electricity charges and port tariffs to find a solution. As a result of this engagement, Transnet announced that it would review its port tariff structure to support industrialisation and the export of value-added goods.

· The development of an oversight mechanism with other relevant committees in Parliament to ensure complementarities and coordination remains a challenge. This is highly significant in the context of IPAP, which relies on a co-ordinated approach among government departments and public institutions for it to be successful.

· The effective oversight over the implementation of legislation is also a challenge. The committee in the 5 th Parliament should develop a mechanism to oversee the implementation of legislation and its impact on society.

Dealing with International and Regional Trade Relations

· Currently no framework/mechanism exists for Parliament to express a view on trade negotiations.

· The committee’s study tour to the WTO effectively establishing the basis for its oversight over trade and created an opportunity to effectively engage other international institutions.

· Through its oversight, the committee received regular briefings on the status of and developments within on-going trade negotiations. This provided a platform for the committee to consolidate its view on these negotiations.

· The committee’s participation at international trade fora, such as the 8 th and 9 th WTO Ministerial Meetings, the 5 th BRICS Summit, COP17 and the IAF Meeting for Parliamentarians, has contributed to its understanding of trade and other related matters and allowed it to offer support to the Minister at these fora. It also provided committee members with a platform to engage with their international counterparts and to actively participate in the domestic and international debate.

· The committee effectively dealt with all agreements and conventions that were tabled for ratification.

Improvement of the knowledge and skills of its members to deal with the complex, technically demanding matters placed before the committee

· The committee initially received training on international trade. This was then supplemented by workshops and/or seminars on trade related matters. In addition, the committee’s study tour played a pivotal role in entrenching this learning to understand aspects of international trade relations.

· The committee also spent a substantial time engaging with the WIPO and the ICTSD on intellectual property and indigenous knowledge and/or traditional cultural expressions to empower it to deal with the Intellectual Property laws Amendment Bill which was of highly technical and complex nature.

· As was required, the committee engaged various experts to provide technical support in relation to legislation and used study tours and/or oversight visits to enhance their understanding.

Dealing with matters of public interest

· During the 4 th Parliament, the committee provided a platform for members of the public to discuss matters of public interest, such as:

o The socio-economic impacts of gambling.

o The status of transformation within the horseracing industry.

o The rise in unsecured lending and its impact on the poor.

o Product labelling.

o The impact of the steel and administered prices on industry.

o Small business development.

· The committee still needs to develop clear criteria for identifying issues of public interest and on how to effectively incorporate matters arising for follow-up into its oversight plan to ensure that there is transparency and accountability in terms of addressing critical issues.

Discharging of statutory functions

· During the period under review, the committee discharged their statutory functions with the recommendations of the appointment of the Chairperson of the National Lotteries Board and its Board members.

· The committee was solely responsible for the interview of candidates and after the completion of the process made the necessary recommendations to the Minister.

3. Briefings/Public hearings other than on legislation and on BRRR requirements

Informed by the DTI’s key priorities, namely industrial development, trade relations and broadening economic participation, the committee had extensive briefings and/or public hearings over the five year period. These are briefly discussed below.

· Industrial development

The Industrial Policy Action Plan (IPAP2) is the flagship programme of the DTI, which was tabled on 18 February 2010 in Parliament. This was the result of a collective approach among Ministers in the Economic Cluster and included consultation with business, labour, state entities, and academia. The IPAP2 is considered a rolling action plan, which is tabled annually and covers a three year period.

In 2010, the committee held extensive public hearings and invited the relevant stakeholders to comment on IPAP2. The rationale behind this decision was for the committee to critically engage with stakeholders on IPAP2 and to develop a definitive position. The committee report was adopted on 1 June 2010.

The committee has received regular updates on the implementation of IPAP2 since August 2010. Each year, the committee focussed on different IPAP-related issues, beginning with the cost of steel as an essential input to industrialisation then infrastructure broadly. In 2012, the committee focussed on the constraints posed by high and rising electricity tariffs, port charges and other administered prices on the manufacturing sector and IPAP2, as well as the critical need for beneficiation. This included a consideration of current measures that had not been implemented and measures that may require legislative action. One of the core outcomes of this engagement was that Transnet committed to review their port tariff structure to support beneficiation efforts.

· Trade, investment and exports

In 2009, the committee was requested to provide input into the draft trade policy document, “A South African Trade Policy and Strategy Framework: Discussion Document” (Trade Policy Framework). The committee invited several stakeholders including non-governmental organisations and academic institutions to express their general views on the Trade Policy Framework. The committee report was adopted on 12 May 2010 with the report being tabled to the National Assembly for consideration.

In pursuing its oversight role over trade related matters, the committee has engaged in a number of workshops, public hearings and briefings from 2009 to the present. This included regular updates on the DTI’s progress on on-going trade negotiations, as part of the annual budget/strategic plan and budget review and recommendation processes, as well as subject-specific activities such as (i) the Trade Seminar on barriers to trade, South African trade policy and international trade agreements (25-26 August 2009), (ii) the w orkshop on Intra-African Trade (16 May 2012) and (iii) the Workshop on South Africa’s Trade Agreements and Relations (1 August 2013). A key highlight was the participation of the members of the committee at the 8 th and 9 th World Trade Organisation’s (WTO) Ministerial Conferences.

The DTI had reviewed the status of the Bilateral Investment Treaties (BITs) which resulted in the policy position to not renew its existing BITs and to develop a framework for the promotion and protection of investment. The committee is expecting a Bill to be tabled in the 5 th Parliament formalising this position.

· Broadening participation

Although this was a priority area for the committee, the focus was on processing legislation in terms of the BBBEE and Co-operatives Amendment Bills. (See section 4.)

· Regulation

The committee focused on the Gambling Review Commission Report. The committee engaged in the following activities:

· Public hearings.

· A workshop on online gambling with key governmental and private institutions.

· A site visit to Gauteng to acquaint itself with the various forms of legalised gambling activities in South Africa and to identify some of the challenges the gambling industry was facing, particularly in terms of the existing legislation.

· A site visit to the offices of the National Responsible Gambling Programme (NRGP) in Kenilworth and the clinical assessment and research component surrounding addictions (including gambling addictions) at the University of Cape Town’s Department of Psychiatry and Mental Health.

· A site visit to Kenilworth Racecourse focused on gaining a better understanding of the horse-racing industry, as well as how the totalisator functioned and betting with bookmakers occurred in this regard.

The committee made recommendations to the Minister in a report adopted on 7 March 2012. These recommendations are still under review by the Minister.

In addition, the committee held several meetings with the South African Grooms Association. The Minister has undertaken to facilitate discussions among all stakeholders within the horseracing industry to address the issues of transformation within the industry.

3.1 Challenges emerging

The following key challenges emerged:

· There is an over-reliance on the reporting by the DTI and entities’ to determine their performance and level of service delivery. Public participation, especially in terms of areas of regulation and broadening participation, should be leveraged to strengthen the oversight process.

· Historically, the DTI’s entities have had a record of good governance and financial management. However; recently, a number of entities, especially newly-established entities, have started to show challenges with respect to maintaining good governance and financial management systems. This may be due to insufficient monitoring by the DTI.

· Inaccessibility of information such as international agreements, policies and strategy in the public domain is a serious concern.

· A challenge that remains is that the committee is not always sufficiently informed about (1) existing international obligations and developments at international institutions, e.g. the World Intellectual Property Organisation, (2) policy developments and (3) task teams within South Africa that affect the work of the DTI. This has resulted in situations where seemingly incoherent or conflicting policies have been adopted.

· The committee tends to receive late correspondence with regard to important conferences being hosted by the DTI or its entities. These conferences provide a wealth of insight into areas that the committee oversees and are invaluable to attend.

· Implementation of the Industrial Policy Action Plan has been hampered by constraints arising from uncoordinated approaches among departments that have led to a rise in the cost of doing business.

· The National Consumer Commission had received a qualified audit report for the 2012/13 financial year due to lack of documentation of certain procurement activities, which were allegedly stolen from its office. This is expected to remain a challenge during future audits for a number of years.

· There has been a lack of cohesion in the implementation of national gambling policy among national and provincial gambling authorities, which has not been resolved after more than five years. Furthermore, transformation within the horse-racing industry has been slow with grooms being one of the few stakeholders in the industry not being officially recognised.

· The number of boards for technical infrastructure institutions was considered to be inefficient and not cost-effective, as well as not encouraging a cohesive technical infrastructure framework.

3.2 Issues for follow-up

The 5 th Parliament should consider the following thematic issues:

3.2.1 Industrial development

· Assessing the effectiveness of the implementation of the Industrial Policy Action Plan. This should include ascertaining the view of stakeholders in terms of the usefulness of interventions in strengthening the targeted industries. Furthermore, Parliament should ensure that there is a minimisation of constraints in terms of the cost of doing business.

· Assessing the effectiveness of incentives in meeting their set objectives.

· Deliberating on the first National Industrial Participation Programme report tabled in December 2013. A second report is expected to be tabled. This report should cover the performance of projects under the non-defence portion of this Programme.

· Overseeing how South Africa’s technical infrastructure institutions (i.e. NMISA, NRCS, SABS and SANAS) are gearing up to support new initiatives outlined within government policy and legislation; and whether there is adequate capital investments being made to ensure that state of the art technology is being used, especially in core areas of support. In addition, reviewing the use of a single board to ensure a more cohesive technical infrastructure framework.

3.2.2 Trade, investment and exports

· Overseeing ongoing trade negotiations including receiving stakeholder input on schedules for the Southern African Development Community (SADC) Trade in Services Protocol, the Tri-partite Free Trade Agreement, the WTO Doha Development Agenda, the India-SACU (Southern African Customs Union) Preferential Trade Agreement, the SADC-EU (European Union) Economic Partnership Agreement.

· Overseeing regional integration efforts and implementation of agreements at SACU and SADC levels.

· Overseeing the use of trade mechanisms to support industrial development such as the use of existing dispute mechanisms, anti-dumping measures, countervailing duties and import tariffs. These should take the impact on consumers into consideration.

· Overseeing the implementation of export incentives and the impact of the National Exporter Development Programme.

· Following-up on the status of the Export Credit Insurance Corporation’s request regarding additional funding to support the Interest Mark-up Scheme for exporters.

· Engaging on the economic diplomacy role of trade missions and South African embassies.

· Engaging on the work of the Committee on the Non-proliferation of Weapons of Mass Destruction.

· Reviewing the impact of the shift in the trade regime from liberalisation to a more developmental approach underpinning industrial policy on the South African economy.

3.2.3 Broadening participation

· Broad-based black economic empowerment : Overseeing the implementation of the new Codes of Good Practice and the progress on the NEF’s request for its recapitalisation.

· Small, medium and micro enterprises (SMMEs) : Overseeing the implementation of incubators to support the development of SMMEs and the work of the Small Enterprise Development Agency.

· Co-operatives : Encouraging the development and mainstreaming of co-operatives within the formal economy.

· Vulnerable groups : Overseeing the implementation of the Youth Enterprise Development Strategy. Monitoring the progress of the development of the National Strategic Framework on Gender and Women Economic Empowerment and the Informal Sector Strategy.

3.2.4 Regulation

· Consumer protection : Overseeing the functioning of Memorandums of Understanding (MOUs) with other consumer protection institutions, especially provincial offices, in terms of referrals by the National Consumer Commission (NCC). Monitoring the NCC's enforcement capacity in terms of appropriate human and financial resources to effectively deal with complaints, investigations and litigation. Continue monitoring progress in terms of regulations on product labelling for food containing genetically modified organisms; and the resolution of complaints regarding incorrect meat labelling.

· Credit regulation : Overseeing the status of implementation of consumers’ access to credit, recourse for unfair or unscrupulous behaviour and the effectiveness of the debt review process.

· Gambling : Monitoring the status of the implementation of the committee’s GRC recommendations especially in terms of interactive/online gambling. Requesting a status report from the Minister on the outcome of the facilitation between grooms, the National Horse-Racing Association and other horse-racing stakeholders.

· Intellectual Property : Monitoring the development of the National Policy on Intellectual Property and the effectiveness of anti-piracy or prohibition of counterfeit goods initiatives.

· Companies : Overseeing progress on the implementation of the Swedish Model for the Company and Intellectual Property Commission’s call centre and modernisation of its information technology systems. Overseeing the establishment and operation of the Companies Tribunal. Overseeing the effectiveness of the business rescue process.

3.2.5 Administration

· Ensuring that entities are more closely monitored or become more accountable to the Minister in terms of their governance structures and financial performance. This should include quarterly or even monthly reporting on these matters to the DTI.

· Overseeing that the DTI and its entities implement action plans timeously to address audit findings.

· Encouraging the DTI to develop its staff particularly in areas of economic diplomacy and trade negotiations to ensure the continuity of these efforts.

4. Legislation

The following pieces of legislation were referred to the committee and processed during the 4 th Parliament:

Year

Name of Legislation

Tagging

Objectives

Status of Bill

2009/10

None

2010/11

Companies Amendment Bill

[B40-2010]

s76

To amend the Companies Act, 2008, so as to effect certain legal-technical and grammatical amendments in order to ensure the proper application and administration of the principal Act subsequent to its commencement; to correct certain errors resulting in inconsistency and ambiguity in the principal Act; to establish a proper foundation for certain necessary regulations; to continue the mechanisms established under section 335 of the Companies Act, 1973, which allow for the transfer of registration of foreign companies to the jurisdiction of the Republic; to further provide for companies trading under insolvent circumstances; to extend the grounds for disqualification as a director; to provide for the terms of office of members of the Companies Tribunal; and to provide for matters connected therewith.

Adopted by the committee on 10 March 2011

Intellectual Property Laws Amendment Bill

[B 8B – 2010]

s75

Amends the:

· Performers’ Protection Act, 1967, so as to amend certain definitions and insert new definitions; to provide for the recognition and protection of traditional performances having an indigenous origin and a traditional character; to provide for the payment of royalties in respect of such performances; and to provide for recording traditional performances;

· Copyright Act, 1978, so as to amend certain definitions and insert new definitions; to provide for the recognition and protection of copyright works of a traditional character; to provide for the establishment of a National Council in respect of traditional intellectual property; to provide for a national database for recording traditional intellectual property; and to provide for the establishment of a national trust and a trust fund in respect of traditional intellectual property;

· Trade Marks Act, 1993, so as to amend certain definitions and insert new definitions; to provide for further protection of geographical indications; to provide for the recognition of terms and expressions of indigenous origin and for the registration of such terms and expressions as trade marks; and to provide for recording traditional terms and expressions; and

· Designs Act, 1993, so as to amend certain definitions and insert new definitions; to provide for the recognition and registration of traditional designs of indigenous origin; to create for this purpose a further part of the designs register; and to provide for recording traditional designs.

Redrafted Bill adopted by the committee on 19 October 2011

2011/12

Intellectual Property Laws Amendment Bill

[B 8B – 2010] Referred back by the President

S76

The content of the Bill remained the same; however, the Bill was retagged by the JTM as a section 76 Bill.

Adopted by the committee on 2 May 2013

2012/13

Co-operatives Amendment Bill

[B 17 – 2012]

Co-operatives Second Amendment Bill

[B 18 – 2012]

s76

On 25 May 2012, the Minister of Trade and Industry introduced the Co-operatives Amendment Bill [B17-2012] (National Assembly – proposed sec 75) and the Co-operatives Second Amendment Bill (National Assembly – proposed sec 76). The Bills were referred to the JTM for classification in terms of Joint Rule 160. According to the ATC dated 15 June 2012, the JTM in terms of Joint Rule 160(6) classified the Bills as section 75 Bills. Since both Bills were classified as section 75 Bills by the JTM and since both deal with the same subject matter, i.e. amending the Co-operatives Act, No 14 of 2005, the Committee agreed to consolidate the provisions of the Co-operatives Amendment Bill and the Co-operatives Second Amendment Bill into one Bill.

The purpose of the combined Bill was to amend the Co-operatives Act, 2005, so as to provide for the substitution and addition of certain definitions; to provide for associate membership of co-operatives; to provide for categories of primary co-operatives; to provide for the national apex co-operative; to provide for the annual submission of information to the registrar; to amend the accounting practices and requirements for co-operatives by providing for audit and independent review of co-operatives; to provide for the payment of fees by co-operatives for the amalgamation, division, conversion or transfer of co-operatives; to provide for the voluntary winding-up of co-operatives by special resolution; to provide for the registrar to apply for a declaratory order in respect of the liquidation process; to provide for the Co-operative Tribunal to order the winding-up of a co-operative; to substitute the Advisory Board with the Advisory Council; to provide for the establishment, functions and powers of the Co-operatives Development Agency; to provide for the funding and financial management of the Agency; to provide for oversight and executive authority of the Agency; to provide for the establishment, composition and functions of the Co-operatives Tribunal; to ensure compliance with the principles of intergovernmental relations; to provide for intergovernmental relations within the co-operatives sector; and to provide for the substitution of the long title and the Preamble; and to provide for matters connected therewith.

The combined, redrafted Bill [B 17B – 2012] was adopted by the committee on 9 November 2012

Broad-Based Black Economic Empowerment (BBBEE) Amendment Bill

[B 42 – 2012]

s75

To amend the Broad-Based Black Economic Empowerment Act, 2003, so as to insert certain definitions and to amend others; to clarify interpretation; to provide for the remuneration of Council members; to promote compliance by organs of state and public entities and to strengthen the evaluation and monitoring of compliance; to include the creation of incentive schemes to support black owned and managed enterprises in the strategy for broad-based black economic empowerment; to provide for the cancellation of a contract or authorisation; to establish the Broad-Based Black Economic Empowerment Commission to deal with compliance of broad-based black economic empowerment; to provide for offences and penalties; and to provide for matters connected therewith.

Adopted by the committee on 23 May 2013

National Credit Amendment Bill

[PMB 1 – 2012]

s76

To amend the National Credit Act, 2005, by clarifying the definition of consumer to exclude business-to-business transactions and persons who purchase for purposes other than personal consumption ; and to make provision for further relief for consumers by the suspension of interest accrual on debt for a period of up to five years from that consumer being placed under debt review; and to provide for matters connected therewith.

Rejected by the committee on 23 May 2013

2013/14

Special Economic Zones (SEZ) Bill

[B 3-2013]

s76

To provide for the designation, promotion, development, operation and management of Special Economic Zones; to provide for the establishment, appointment of members and functioning of the Special Economic Zones Advisory Board; to empower the Minister to establish the Special Economic Zones Fund; to regulate the application, issuing, suspension, withdrawal and transfer of Special Economic Zones operator permits; to provide for functions of the Special Economic Zones operator; to provide for transitional arrangements; and to provide for matters connected therewith.

Adopted by the committee on 31 July 2013

Protection of Traditional Knowledge Bill

[PMB 3 – 2013]

s76

To protect traditional knowledge as a new category of intellectual property; to provide how said intellectual property rights will be protected; to determine what is eligible for traditional knowledge intellectual property right protection and the conditions for the subsistence or termination of said protection; to provide for ownership of traditional knowledge intellectual property rights; to provide for the duration, nature and scope of traditional knowledge intellectual property rights; to provide for the enforcement of traditional knowledge rights; to regulate the licensing of traditional knowledge intellectual property rights; to provide for the establishment of a National Council in respect of traditional knowledge; to provide for the establishment of a national trust and trust fund in respect of traditional knowledge; and to provide for the regulation on the applicability of the Bill to foreign countries; to provide for the protecti0n of performer; and to provide for matter incidental thereto.

Rejected by the committee on 6 November 2013

Lotteries Amendment Bill

[B 21 – 2013]

s75

To amend the Lotteries Act, 1997, so as to amend certain definitions; to provide for the establishment of a National Lotteries Commission; to provide for the extension of the powers of the board; to provide for the licensing of an organ of state to conduct the National Lottery; to provide for a clear accountability process for the distributing agency; to provide for the professionalization of the distributing agency; to eliminate overlapping functions between the Minister and the board; to provide for the removal of the reconstruction and development programme as a category entitled to be allocated money of the fund; and to provide for matters connected therewith.

Adopted by the committee on 2 October 2013

Legal Metrology Amendment Bill

[B34 – 2013]

s75

To p r ovide for the administration and maintenance of legal met r ology technical r egulations in order to p r omote fair trade and to p r otect public health and safety and the envi r onment; and to p r ovide for matters connected the r ewith.

Adopted by the committee on 29 October 2013

National Credit Amendment Bill

[B47 – 2013]

s76

To amend the National Credit Act, 2005, so as to amend certain definitions; to provide for the alteration of the governance structure of the National Credit Regulator; to empower the Chief Executive Officer to delegate certain functions to other officials of the National Credit Regulator; to provide for the registration of payment distribution agents; to tighten measures relating to debt counsellors and the conduct of their practices as debt counsellors; to allow registrants to voluntarily cancel their registration; to empower the Minister to issue a notice for the removal of adverse consumer credit information; to provide for automatic removal of adverse consumer credit information; to empower the National Consumer Tribunal to declare a credit agreement reckless; to provide for the registration and accreditation of alternative dispute resolution Agents; and to provide for matters connected therewith.

Adopted by the committee on 21 February 2013

4.1 Challenges emerging

There have been incidents where critical concepts have been insufficiently defined by the DTI or it was unclear what the intended structure and roles of implementing agencies were within new legislation. This has led to unnecessary confusion among Members and the DTI when deliberating on legislation and resulted in avoidable time delays.

4.2 Issues for follow-up

The 5 th Parliament should consider:

· Calling for new regulations to be presented to Parliament for input before these are finalised especially in terms of the BBBEE Amendment Act, Co-operatives Amendment Act, National Credit Amendment Bill and SEZ Bill.

· Reviewing the implementation of new legislation within two to three years of these coming into effect, in particular the implementation of new lines of accountability for the distributing agencies of the National Lotteries Distribution Trust Fund.

· Ensuring that there are sufficient awareness efforts regarding new legislation, particularly those affecting vulnerable groups.

· Overseeing the status of entities established in terms of legislation passed in the 4 th Parliament, namely the BBBEE Commission, Co-operatives Development Agency and Co-operative Tribunal. In addition, the conversion of the National Lotteries Board into the National Lotteries Commission.

· Overseeing the status of Bodies reporting directly to the Minister namely the National Trust and Council for Indigenous Knowledge and the SEZ Advisory Board.

· Overseeing the transition of industrial development zones into special economic zones.

· Following-up on consultations by the Minister with the Minister of Social Development regarding the use of social grants as a form of income to determine the affordability of a credit agreement for a grant beneficiary.

· Encouraging the Minister to engage the Minister of Justice and Constitutional Development to review its legislation related to emolument attachment orders and debt collection to align these with the spirit of the National Credit Amendment Bill.

5. Oversight trips undertaken

The following oversight trips were undertaken:

Date

Area Visited

Objective

Recommendations

18 Sept 2009

Atlantis

To investigate the impact of the global economic slowdown on the local economic environment. The committee had identified Atlantis as a community that was experiencing economic hardships due to the current economic slowdown.

The DTI should follow-up with ITAC regarding Tedelex’s request for a tariff review on the unassembled electronic components for the manufacturing of television.

The DTI and its entities should provide feedback on progress to resolve the concerns raised by the community.

3-5 Aug 2010

Eastern Cape visiting Volkswagen South Africa (VWSA), Coega IDZ, SEDA, Mzamo Wethu Cooperative, and the Zenzele Weaving Cooperative

As part of its oversight function, the committee agreed to conduct an oversight visit to the Eastern Cape given the predominance of the automotive sector in the province. The committee visited the Volkswagen manufacturing plant, as well as an automotive component plant in the province. This sector has been stressed as one of the backbones for deepening the industrial base. Furthermore, the Coega Industrial Development Zone (IDZ) is one of the most IDZs in the country. The committee selected to visit Coega IDZ, as it is a hub for foreign direct investment and an opportunity to create sustainable jobs.

The committee also visited the Amathole Branch Office of the Small Enterprise Development Agency (SEDA) in East London, as SEDA plays a critical role in providing non-financial support to small enterprises and cooperatives. The development of small enterprises and cooperatives has been identified as critical for promoting employment creation and broadening participation.

The DTI together with the Economic Development Department should intensify support for SMMEs and cooperatives through development finance institutions as part of IPAP2 to successfully broaden participation of historically disadvantaged groups and productive investment in rural areas to grow the economy.

A concern that arose was that the community driven projects were not supported in a holistic but rather a piece-meal manner. Therefore, the DTI should address the issue of lateral linkages with entities falling under them in this regard and other Departments to avoid unsustainable outcomes.

The DTI in conjunction with National Treasury should consider tax incentives linked to IDZs to attract investors and promote the IPAP2 objectives.

18 - 21 Jul 2011

Gauteng (Sedibeng) and Northern Cape (Kathu)

The committee embarked on an oversight visit to the Gauteng and the Northern Cape Provinces visiting the CIPC, the NCC, ArcelorMittal South Africa (AMSA) and Kumba Iron Ore Limited (KIO), as well as the business hub established by KIO in Kathu.

The CIPC submits a report on how it intends to address the following:

· The capacity constraints within the call centre.

· Processing of registration.

· The vacancy rate at the CIPC.

· Problems associated with their IT systems, particularly the enterprise content management system.

· The CIPC provide a progress report on their 18 month turnaround strategy.

The NCC submits a report on how it intends to address the following:

· The late payment of suppliers by the DTI.

· Progress with respect to the finalisation of the NCC website.

· Progress on the development of operational plans in relation to the NCC

· The budgetary constraints that impacts on delivery.

· Progress on finding a suitable office location for the NCC.

The DTI submits a report on the resolution of the challenges related to the handover process with the establishment of the NCC.

The DTI submits a report on all their incentives programmes by the first week of October 2011 with specific reference to the following:

· The years/months since implementation.

· The number of projects approved nationally (by province).

· The value of projects approved.

· The total cost to the fiscus.

· The number of direct jobs created as a result of the incentive programmes.

· The cost per job.

6. Study tours undertaken

The following study tours were undertaken:

Date

Places Visited

Objective

Lessons Learned

Status of Report

19 – 23 Jul 2010

· World Trade Organisation (WTO)

· World Intellectual Property Association (WIPO)

· United Nations Conference on Trade and Development (UNCTAD)

· South Centre

· International Centre for Trade and Sustainable Development (ICTSD)

After deliberating on the Trade Policy in the first part of the year, the committee took a decision to go to Geneva for an intensive study visit to reach a broader understanding on trade related issues from a wide range of stakeholders including the WTO directorate.

The Director-General of the WTO, as well as his Deputy, welcomed the interaction with parliamentarians and acknowledged the value of engagements with lawmakers. Specifically applauding the committee for initiating the programmatic requirements of the study visit which would in future be used as a format by the WTO to expand the outreach programme with legislators and other institutions. Views were expressed that such engagements with lawmakers of WTO countries could enhance the workings of the WTO and that such engagements could contribute to the completion of the Doha Round of negotiations. The views of legislators and resolutions adopted by respective parliaments were essential in supporting a country’s position.

WIPO welcomed the engagement with the committee and indicated that they are eagerly awaiting the outcome of the current debate in South Africa on indigenous knowledge. WIPO would welcome the conclusion of our deliberations on the Intellectual Property Laws Amendment Bill as this legislation could be used as a benchmark for other countries considering amending their Intellectual Property laws.

In the committee’s discussion with UNCTAD, They were of the view that the Millennium Development Goals do not focus on the real development issues and that an alternative growth path should be pursued. To achieve this, policies developed in this regard should be supportive of the international architecture. This view was not prevailing in the committee in its deliberations on trade policy and IPAP2. The committee noted the contribution that UNCTAD could make if developing countries utilised the research capacity of the institution.

The committee’s engagement with the South Centre highlighted key challenges faced by developing countries in the Doha Round negotiations. Developing countries’ cooperation at key international fora would enhance the possibility of ensuring a developmental outcome at the Doha Round negotiations. This could only be achieved through the promotion of South-South cooperation that would enhance their bargaining power.

During the committee’s engagement with the ICTSD, it became apparent that key experts in the field of intellectual property were at the disposal of the committee. The committee’s visit to WIPO did not provide sufficient information on indigenous knowledge and after a strategic engagement with the Chairperson of the ICTSD it was agreed that a workshop would be arranged at minimum cost to Parliament. The workshop proved to further enhance the understanding on the Intellectual Property Laws Amendment Bill, but highlighted key challenges faced by the committee with respect to key principles.

The committee noted the extensive focus on the WTO processes which has broadened its understanding of the current debate in the Doha Round as well as the engagements with key stakeholders in the field of intellectual property that would contribute to the development of legislation.

The committee noted the presence/dominance of officials from various countries of the South at the multilateral organisations and the influence it had on determining the trade agenda. The committee is of the view that recruitment of South African officials to these multilateral institutions should be promoted and encouraged.

Arising out of the experience of the committee during the intensive study visit and the inclusion of the committee secretary, content advisor and researcher, the committee was of the view that there is a need for such study visits at the beginning of every fresh term with the inclusion of key support staff. Secondly, the study visit could be expanded to include a focused cross cluster of committees such as Economic Development, International Relations and Co-operation, and the related select committees.

A recognition that greater synergy should be developed between Inter-Parliamentary groupings and the committee where appropriate.

Report adopted by the committee on 17 November 2010

29 Jul – 2 Aug 2012

Kenya

To learn from the Kenyan experience with respect to co-operative development as a strategy for wealth creation and poverty reduction. To investigate the enabling environment for co-operatives through a legislative framework, co-operatives policy and strategy provided by the Kenyan Government

The co-operative movement incorporates all facets of Kenyan life, as people in high office, such as the President of Kenya, as well as ordinary people belong to at least one co-operative. The broad-based success of co-operatives in Kenya had much to do with a prevailing attitude that favours co-operation, mutual responsibility, and financial prudence to reach a common goal. This attitude towards co-operatives is commendable. However, this attitude is not as prevalent in South Africa, and will need to be cultivated over time. The motto “Harambee” meaning to all pull together, similar to our phrase, “Ubuntu”, should be the foundation for co-operative development in South Africa.

The Savings and Credit Co-operative (SACCO) Societies dominate the co-operatives movement and are established solely for savings, and the provision of loans and credit lines. Individuals cannot be members of two SACCOS but can belong to more than one co-operative.

Evident from its interaction was the strong savings culture of the Kenyans, which is sadly absent from the South African society. The absence of government support in terms of social pensions and housing for the poor provides the necessary incentive for individuals and households to save for the provision of housing, education and retirement.

Co-operatives are found in a number of sectors of the Kenyan economy which include housing, and agricultural products such as milk, tea and coffee.

The banking sector in Kenya is skewed towards providing access to finance to big business. The high interest rate of 22 percent forces Kenyans to seek alternative avenues to gain access to finance. The volatility with regard to interest rate development does not provide the necessary certainty required when making loans.

The clear thread that ran through nearly all of the presentations was that government should not provide financial support for the establishment of co-operatives. The role of the state should rather be to provide the enabling environment by establishing a sound regulatory environment, a functioning dispute resolution mechanism, and non-financial support programmes including education and training.

Limited discussions on worker and consumer co-operatives prevented extensive engagement on the matter which could have contributed to the committee’s understanding as it relates to regulations and governance structures.

An analysis of the appropriate legislation as it relates to the Kenyan co-operative movement is required to understand government’s initial and ongoing assistance to the co-operative movement.

The establishment of an effective Tribunal would facilitate the resolution of disputes faster and cheaper than courts.

Field officers must be in the municipalities to specifically train co-operatives and provide them with the necessary services.

Field officers must have the necessary expertise within the co-operative sector that would enable them to deal with matters as they arise.

The Government must look beyond providing direct financial support for co-operatives but rather support co-operatives through non-financial means to ensure the survival and growth of the co-operatives movement in South Africa.

The DTI should explore the possibility of establishing a closer relationship with its counterpart in Kenya, the Ministry of Co-operatives and Marketing, to ensure continued policy development with the co-operatives sector.

With regard to skills development, the DTI should establish a mutually beneficial exchange programme with the Co-operative University College of Kenya that would enhance the skills levels of persons working in the co-operative sector in South Africa.

The allocated funds should focus on education and training, and the development of managerial capacity, as well as administrative capacity and information technology systems.

Report adopted by the committee on 29 August 2012

7. International Agreements

The following international agreements were processed and reported on:

Name of International Agreement

Objective

Status of Report

Convention on International Liability for Damage Caused by Space Objects, tabled in terms of section 231(2) of the Constitution, 1996

To provide for effective international rules and procedures concerning liability for damage caused by space objects and to ensure, in particular, the prompt payment under the terms of this Convention of a full and equitable measure of compensation to victims of such damage by States and international intergovernmental organizations involved in the launching of space objects.

Adopted by the committee on 2 September 2009

Convention on Registration of Objects Launched into Outer Space, tabled in terms of section 231(2) of the Constitution, 1996.

To provide for launching States to maintain a National registry for its space objects and to provide such information for inclusion in a United Nations’ register. In addition, to report to the UN Secretary-General when a space object is launched into outer space .

Adopted by the committee on 2 September 2009

Preferential Trade Agreement (PTA) between the Southern African Customs Union (SACU) and the Common Market of the South (MERCUSOR)

To provide for tariff reductions on selected goods being traded between SACU and MERCOSUR member states, namely Argentina, Brazil, Paraguay and Uruguay.

Adopted by the committee on 1 March 2010

Agreement between the Governments of the Republic of South Africa and Republic of Zimbabwe for the Promotion and Reciprocal Protection of Investments

To provide for a bilateral investment treaty between South Africa and Zimbabwe to protect investors.

Adopted by the committee on 14 April 2010

Agreement between the Government of the Republic of South Africa and the Government of the Republic of Cuba on Economic Assistance

To stimulate bilateral trade relations between South Africa and Cuba. The package will be used to purchase goods and associated services in the South African market. In addition, it will assist Cuba with development of its agriculture as well as reconstruction of infrastructure destroyed by hurricanes in 2008.

Adopted by the committee on 9 May 2012

Agreement on the Amendment of Annex IV and VI of the Trade, Development and Cooperation Agreement between the Republic of South Africa, on the one part, and the European Community and its Member States, on the other part, regarding certain agricultural products (referred to as the “Cheese Agreement”), tabled in terms of section 231(2) of the Constitution, 1996.

Amendments to Annexes of the Trade, Development and Cooperation Agreement (TDCA) regarding certain agricultural products. These include (1) an amendment to the “gross weight” of canned fruit, and (2) amending the listing of some cheeses from the protected list to the reserved list.

Adopted by the committee on 29 January 2013

SADC Protocol on Trade in Services

The main objectives are to:

· liberalise intra-regional trade in services on the basis of equity, balance and mutual benefit with the objective of achieving the elimination of substantially all discrimination between State Parties and a liberal trading framework for trade in services with a view to creating a single market for trade in services;

· to promote sustainable economic growth and development in the region, thereby raising the standard and quality of life of the people of Southern Africa;

· enhance economic development, diversification, local, regional and foreign investment in the services economies of the Region; and

· pursue services trade liberalisation, while fully preserving the right to regulate and to introduce new regulations; and enhance the capacity and competitiveness of the services sectors of SADC countries.

Adopted by the committee on 23 August 2013

7.1 Challenges emerging

The following challenges emerged during the processing of international agreements:

· There was usually insufficient time available to interrogate the impact of international agreements and engage with other affected stakeholders before the committee recommended approval of the agreement for ratification.

· Implementation of the Agreement between the Government of the Republic of South Africa and the Government of the Republic of Cuba on Economic Assistance has been hindered mainly due to the economic embargo on Cuba.

7.2 Issues for follow-up

The 5 th Parliament should consider:

· Overseeing the impact or implementation of existing trade agreements, particularly the Agreement between the Government of the Republic of South Africa and the Government of the Republic of Cuba on Economic Assistance , the Zimbabwean bilateral investment treaty, and the Trade and Development Co-operation Agreement

The Trade Facilitation Agreement which was agreed to at the 9 th WTO Ministerial Conference should be tabled in Parliament for ratification. The new committee should consider the commitments made in terms of the three categories; whether this will align with the other SACU member states; and oversee its co-ordinated implementation.

8. Statutory obligations

In terms of section 3(3) of the Lotteries Act, 1997, the committee is required to make recommendations to the Minister regarding the appointment of Chairperson of the National Lotteries Board. At the request of the Minister, the committee also proceeded to make recommendations for the appointment of other members of the Board. The committee report was adopted on 6 November 2009. Subsequently, the committee was requested by the Minister to make a further recommendation to fill a vacancy created by the passing of a board member. There may be a need to review this subsection in the Lotteries Act to provide clarity to the committee on its responsibility with respect to the appointment of the chairperson and/or board members.

The committee has been tabling Budget Review and Recommendation Reports since 2010 in terms of the Money Bill Procedures and Related Matters Amendment Act. In fulfilling this requirement, the committee considered the Budget Vote for Trade and Industry which included allocations for certain entities, the strategic plans, and annual reports, as well as quarterly financial and non financial performance reports, of the department and selected entities. The committee decided to focus on the NCC and the CIPC on an ongoing basis as both were newly established. The major challenge has been that the deadline for compliance is not achievable, as the financial and non-financial information for the full 18 period is not available yet. As the Parliamentary Budget Office is not fully functional, the committee is not in a position to make a well-informed recommendation for amendments to the budget.

8.1 Issue for follow-up:

The committee should consider whether adequate financial resources have been made available for the establishment of new entities and the expanded mandates of existing entities, as set out in new legislation . The committee should request that the DTI submits quarterly reports on its performance as well as that of its entities.

9. Attendance of international conferences

Members of the committee participated at the following international conferences:

Date

Conference

Purpose

11-16 Oct 2009

60 th International Astronautical Congress (IAC), Korea

To attend the Meeting for Parliamentarians and the opening ceremony. The International Astronautical Federation (IAF) introduced a major segment for Parliamentarians to brief them on the contribution of space science and technology to issues of sustainable development.

26-28 Sept 2010

61st IAC, Czech Republic

To attend the Meeting for Parliamentarians and the opening ceremony. The IAF offers Members of Parliaments a well-defined and organised platform for a dialogue with the traditional space community (governmental representatives, agencies, industry, engineers and scientists) on a global scale. The theme of the second Meeting for Members of Parliament was “ Space Systems in support of the management of natural disasters ”.

29 Jul 2011

Southern African Customs Union’s (SACU) Regional Conference

The Conference was organized with the aim of bringing together government, academics, the private sector and the public to discuss regional integration in relation to the development of the SACU regional policies. The Conference covered:

· Regional integration of SACU.

· Regional industrial development policy.

· The SACU revenue sharing arrangement.

· Cross-border infrastructure.

2-4 Oct 2011

62 nd IAC, South Africa

To attend the Meeting for Parliamentarians and the opening ceremony. The IAF introduced a major segment for Parliamentarians to brief them on the contribution of space science and technology to issues of sustainable development. The focus topic of the third Meeting for Members of Parliament was “The use of space technology for managing food, water and energy resources”.

15-17 Dec 2011

8 th WTO Ministerial Conference, Switzerland

To join the South African delegation to the Ministerial Conference, engage with its parliamentary counterparts and to oversee the progress made in relation to the Doha Round negotiations and to understand the implications of decisions made at this forum, so as to ensure a developmental outcome for trade negotiations.

30 Sept – 2 Oct 2012

63 rd IAC, Italy

To attend the Meeting for Parliamentarians and the opening ceremony. The IAF introduced a major segment for Parliamentarians to brief them on the contribution of space science and technology to issues of sustainable development. The focus topic of the fourth meeting will be “ Satellite-based Applications – Tools for Policy Implementation and Verification ”.

26-27 Mar 2013

5 th BRICS Summit , South Africa

To attend the Business Forum and Exhibition hosted by the DTI at the BRICS Summit. The Business Forum and Exhibition provided the platform for the business community from the BRICS countries to share common ideals and challenges facing newly industrialised countries. Attendance facilitated the establishment of relationships with international bodies and engagement with the relevant parliamentary counterparts on matters that relate to trade relations and the ratification of international agreements and conventions .

26-27 Oct 2013

BRICS Co-operative Meeting, South Africa

To attend and participate in the 3 rd BRICS Co-operative meeting. The meeting was hosted by the South African National Apex Cooperative (SANACO) in partnership with the DTI under the theme: Partnerships for Development, Integration and Industrialisation through Cooperatives . The aim of the meeting is to facilitate bilateral and multilateral cooperation amongst co-operative enterprises in BRICS countries. The meeting will provide an opportunity for cooperatives to exchange ideas, experiences and information on enhancing cooperatives development, possible collaboration and joint ventures amongst cooperatives in the BRICS countries and Southern Africa.

3-7 Dec 2013

9 th WTO Ministerial Conference, Bali, Indonesia

To join the South African delegation to the Ministerial Conference, engage with its parliamentary counterparts and to oversee the progress made in relation to the Doha Round negotiations and to understand the implications of decisions made at this forum, so as to ensure a developmental outcome for trade negotiations.

9.1 Issue for follow-up:

The committee should consider continuing its involvement at the Meeting of Parliamentarians, which precedes the annual IAC.

10. Acknowledgements

The committee wishes to express its appreciation for the co-operation of the Minister and the DTI and other stakeholders in supporting the committee during the 4 th Parliament. The committee also wishes to thank its committee support staff in particular the the committee secretary, Mr A Hermans, content advisor, Ms M Herling, the researcher, Ms Z Madalane, and the committee assistant, Mr D Woodington, for their professional support and conscientious commitment to their work. The Chairperson thanks all Members of the committee for their active participation during the 4 th Parliament.

11. Recommendations

The committee in the 5 th Parliament should consider:

· Intensifying public participation especially in terms of the thematic areas of regulation and broadening participation, to assess the accessibility of the Department of Trade and Industry and its entities and the quality of services delivered, as well as the effectiveness of protection offered to consumers and distressed businesses.

· Allocating a portion of its budget to enable members and/or staff to attend important conferences that would enhance the committee’s oversight role.

· Requesting the Department of Trade and Industry and its entities to submit quarterly performance reports.

· Commissioning independent research on the effectiveness of the Industrial Policy Action Plan and the Department of Trade and Industry’s incentive programmes.

· Requesting the Minister to provide a status report on the implementation of the recommendations of the Inter-departmental Task Team on Iron Ore and Steel.

· Encouraging the consolidation of the boards of technical infrastructure institutions into a single board to ensure coordination between these institutions.

· Requesting that the committee be allowed to exercise its oversight more effectively in relation to trade-related matters, such as trade fairs or pavilions, through oversight visits abroad.

· Developing a process for active participation during the negotiating phase of key trade agreements.

· Requesting the Minister to table a status report on the facilitation between the grooms and other horse-racing stakeholders to address issues of transformation.

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