ATC130530: Report of the Select Committee on Labour and Public Enterprises on its Strategic Planning Workshop, dated 15 May 2013
NCOP Public Enterprises and Communication
Report of the Select Committee on Labour
and Public Enterprises on its Strategic Planning Workshop, dated 15 May 2013
1.
Background
The President of the Republic of South
Africa, Mr Jacob Zuma, in his State-of-the-Nation Address early this year, made
the point that the National Development Plan (NDP) contains all the necessary
guidelines for South Africa that will lead to realising the countrys service
delivery objectives. He went on to say that the NDP proposes interventions that
can put the economy on a better footing, serving as a national guideline for
all government departments in their efforts to provide services to the people
as well as in tackling poverty, unemployment and inequality.
The Presidents statement compelled
government departments to align their Strategic Plans and Annual Performance
Plans (
APPs
) with the National Development Plan.
Parliament on the other hand had to strengthen its oversight mechanisms over
the executive to ensure, among other things, that the vision contained in the
National Development Plan is achieved.
2.
Introduction
The Select Committee on Labour and Public
Enterprises, as the legislative arm of government entrusted with the oversight
responsibilities of the Departments of Labour, of Communications and of Public
Enterprises, convened its strategic planning workshop on 6 March 2013 at the
Pepper Club Hotel in
The purpose of the workshop was to (1)
understand how departments have aligned their key policy objectives, both short
and long term with those of the Presidents State-of-the-Nation Address and
those of the National Development Plan; (2) identify challenges faced by
departments and any legislative gaps responsible for the slow delivery of
services to the people; and (3) develop priorities for the oversight programme
of the Committee as Parliament approaches the end of the fourth term. The
Committee was briefed by the Department of Labour and the Department of Public
Enterprises on 6 March 2013. The Department of Communications briefed the Committee
on 24 April 2013.
3.
Presentation by the Department of Labour
3.1
Alignment with the NDP and the State-of-the-Nation Address
The Director-General (DG) gave a brief
overview of the departments vision, key focus areas and strategic plan. In the
presentation the DG identified some of the challenges facing the department and
how the department plans to address them. The departments presentation was
structured into four parts, as follows:
§
Alignment of the departments key
objectives with the key priorities of the State-of-the-Nation Address;
§
Planned legislation by the department to be
tabled in the 2013/14 financial year;
§
The departments Operational Plan as part
of the departments overall Strategic Plan;
§
Challenges facing public entities and their
mandates.
In aligning the departments key objectives
with those of the State-of-the-Nation Address, the department plans to focus on
A Responsive Labour Market aspect of the address. These issues are focus
areas with which the department is already dealing, according to the DG. The
list below contains some of the key actions the department plans to focus on
with respect to the short-term goals outlined in the State-of-the-Nation
Address:
§
Develop proposals for an acceptable minimum
standard of living and proposals on how to achieve this over time;
§
Give a subsidy to the placement sector to
identify, prepare and place
matric
graduates into
jobs;
§
Adopt an approach to handling probationary
periods that reflect the intention of probation;
§
Simplify dismissal procedures for
non-performance or misconduct, especially for smaller firms;
§
Strengthen dispute resolution mechanisms in
the labour market with a view to reducing tension and violence.
With regard to
addressing focus areas contained in the National Development Plan, Department
of Labour Plan will pay attention to the following areas:
§
Creating decent work;
§
Social protection;
§
Revised Broad Based Black Economic
Empowerment Codes of Good Practice
§
Youth employment incentives;
§
Assistance to
Marikana
victims;
§
Social stability;
§
Peace and stability in the agriculture
sector;
§
Strengthening collective bargaining;
§
An integrated response to TB and HIV
infection in the workplace.
The Department of Labour has created a
number of initiatives within the framework of the Decent Work Country Programme
(DWCP) to reduce the high rate of unemployment in the country. The department
is currently discussing the DWCP profile and the document will be published
before the end of the 2013/14 financial year. The department is also part of
the stakeholders expected to conclude an Accord in relation to the following:
improved training and work experience for young people; National Youth Service
programme; employment set-asides for young people in key sectors; youth
co-operatives and youth-owned small businesses to promote youth involvement in
the economy.
3.2 Legislation to be tabled in Parliament
The department is
planning to bring before Parliament the following legislative amendments:
§
Amendment of the Unemployment Insurance Act
(No. 63 of 2001);
§
Promulgation of the Employment Services Act
(No. 38 of 2012);
§
Amendment of the Compensation for
Occupational Injuries and Diseases Act (No. 130 of 1993);
§
Amendment of the Occupational Health and
Safety Act (No. 85 of 1993);
§
Amendment of the Basic Conditions of
Employment Act (No. of 1997);
§
Amendment of the Employment Equity Act (No.
55 of 1998);
§
Amendment of the Labour Relations Act (No.
66 of 1995).
Since the list is long, the department is
planning to fast-track at least four amendment bills to be processed in
Parliament before the end of the fourth Parliament term. These are; the Labour
Relations Act, Employment Equity Act and Conditions of Employment Act.
3.3 Strategic Plan Operational Plan of
the Department of Labour
The Department of Labour will focus mainly
on Outcome 4: Decent employment through inclusive economic growth, and two
other outcomes: Outcome 11. Create a better
§
Implementation of Decent Work Country Programme
(DWCP);
§
Rebuilding Public Employment Services;
§
Strengthening of the Department of Labours
inspectorate division;
§
Strengthening social security
including reintegration of workers into the labour market and restructuring the
Sheltered Employment Factories;
§
Give
value to social dialogue in the formulation of sound and responsive legislation
and policies to attain labour market flexibility for competitiveness of
enterprises which is balanced with the promotion of decent employment;
§
Strengthen the institutional
capacity of the Department to improve service delivery and access to services
provided by the department.
4. Key challenges facing the
Department of Labour
§
information
Technology systems are not utilised and services are provided manually;
§
Ensuring that amendments to BBBEE-codes do not
contradict Labour Relations Act or Employment Equity targets;
§
To many farmers
are applying for exemption from the minimum wage determination for the farming
industry;
§
Farmers are
applying for work permits to employ foreign labourers (who actually have less
qualifications than those trained in the country);
§
Occupational Health and Safety Act that still
have to be considered by Cabinet;
§
The
development
and implementation of the Fraud and risk strategy for the department;
§
Ensuring
compliance with Employment Equity legislation in the labour market through the
inspectorate division;
§
New sectors such
as Call Centres will have to comply with minimum wage determination the
department will have to address matters like this one where new sectors emerge;
§
The emergence of
new unions and their recognition changing the labour market landscape;
§
Employment of
people with disabilities, a challenge in meeting the targets by employers;
§
A different meeting to unpack the concept of
decent work.
5. Presentation by the Department of
Public Enterprises
The
Director-General of the Department of Public Enterprises gave a panoptic view
of the departments strategic plan, and how the department in its operational
plan has aligned its projects to give meaning to the National Development Plan.
The presentation was structured into five parts; namely the policy framework,
strategic plan priorities for 2013/14, resourcing of the department,
legislation programme and challenges.
5.1 Policy framework
The departments
vision is aimed at driving investment, productivity and transformation in the
DPEs
state-owned companies, their customers and suppliers
to unlock growth, drive industrialisation, create jobs and develop skills.
According to the Director General (DG), the vision shares the same objectives
of the National Development Plan (NDP). He made an example of the Departments
build programme (the construction of both
Medupi
and
Kusile
power stations, as well as
Transnets
infrastructure build programme), pointing out that they will help put the
economy on job creating growth as envisaged by the National Development Plan.
5.2 Alignment
The establishment
of the Presidential Information Co-ordinating Committee (PICC) is fundamental
for improved coordination in the design and delivery of infrastructure
projects. This also means that the alignment of all governments projects into
an overarching developmental strategy that speak to the National Development
Plans Vision 2030.
The Department is
working towards developing a transformation strategy that will guide State
owned companies (SOC) on: (1) integration of small enterprises/BBBEE into
SOCs
value chain of suppliers; (2) expansion of the
SOCs
skills development programmes to support the development
of critical skills; as well as (3) driving youth empowerment programmes within
SOCs
.
With regard to
the role of
SOCs
in supporting the implementation of
government programmes, the department will focus on the following:
§
Development of
long-term strategies to ensure that
SOCs
remain
sustainable and are able to support governments objectives and;
§
To ensure that
their balance sheets enable them to effectively execute their mandates.
The department
has finalised the process of establishing the Project Management Office (PMO)
in an effort to improve capacity to oversee State-owned companies build
programme.
5.3 Priorities for the Department of
Public Enterprises
§
The Department
will intensify its focus on the successful implementation of the infrastructure
programme as led by both Eskom and Transnet. Key priorities also include;
§
Strengthening
capacity of the Department to oversee the infrastructure build programme
§
Facilitate
creation of a supportive policy environment for State-owned companies to
increase investment into the economy;
§
Promote increased
localisation of procurement spend through the Competitive Supplier Development
programme (CSDP);
§
Explore ways to
support State-owned companies that are facing financial challenges.
6. Resourcing the Department of
Public Enterprises
The mandate of the Department has expanded
over the past few years in line with the role played by State owned companies
in supporting governments infrastructure roll-out plan. In line with the above
developments, the Departments staff complement has increased from 168 in 2009
to 210 in the 2012/13 financial year. The department is exploring ways to
retain skilled personnel beyond increases in remuneration packages.
6.1
Challenges facing State-owned companies
6.1.1
The Department of Public Enterprises
The Department is faced with the challenge
of retaining skilled staff
who
are sometimes poached
by State-owned companies the department oversees.
6.1.2
Alexkor
Identification and
funding of new mining ventures for the future sustainability of
Alexkor
as a sustainable business entity.
6.1.3
Broadband
Infraco
Broadbands
funding
requirements to enable the company to execute its mandate of making broadband
services accessible to
underserviced
and
underdeveloped areas.
6.1.4
Denel
Successful implementation of the companys
turnaround strategy for sustainability purposes, as well as fast-tracking the
finalisation of the Defence Review Strategy. The latter will enable the
department to determine
Denels
strategic role in arms
manufacturing.
6.1.5
Eskom
Funding challenges as a result of the
National Energy Regulator of South Africas (NERSA) decision to grant Eskom 8%
tariff increase instead of the 16% Eskom applied for. This includes
Eskoms
ability to maintain adequate energy supply to meet
demand by energy consumers. Furthermore, the restructuring of the electricity
industry as contemplated in the Independent System and Market Operators Bill
and the impact it may have on
Eskoms
balance sheet.
6.1.6
Safcol
Continuing land claims against
Safcols
plantations continue to delay the companys future
investments.
6.1.7
South African Airways
Rising fuel prices and the impact this has
on the companys profit margins
Recapitalisation of the airline to support
the acquisition of new aircraft
6.1.8
South African Express Airways
Delays in tabling the entitys annual
reports and the companys weak internal controls remain a challenge.
6.1.9
Transnet
Delays in the finalisation of the Rail
Policy Act that may affect the companys operations
7.
Legislative programmes and challenges
7.1 The
Shareholder Management Model
The Department of Public Enterprises is
planning to introduce what it calls, Governments Shareholder Management Bill
for State-owned companies, and the period at which this will be done is the
second semester of the fourth Parliament, and a letter has already been sent to
the President in respect of the intended Bill.
The legislation is aimed at defining
DPEs
mandate, entrenching Government shareholding and
ownership on State-owned companies reporting to it, and also to streamline the
relationship between DPE and its
SOCs
.
7.2
Repeal of the
Overvaal
Resort Act (No. 127 of 1993)
The department plans to engage the Companies
Intellectual Property Commission (CIPC) and the Office of the Master of the
High Court for appointment of the Liquidator for the liquidation of the
Overvaal
Resort.
The Department will also prioritise
engagement with the following pieces of legislation:
§
The National Rail Policy Act
§
Independent System and Market Operator
(ISMO)
This includes seeking funding allocations
for energy generation beyond 2017 as outlined in the Integrated Resource Plan
policy document.
8.
Presentation by the Department of Communications
The Department of Communications Strategic
Plan was presented by the Acting Director-General in the absence of the
Director-General who tendered her apology. The Acting DG browsed through the
Departments vision, mission and mandate, pointing out that the Departments
vision is to create ICT conditions that will make
§
Legislative programme
§
Broadcasting Digital Migration
§
Broadband
§
Community Radio Stations
§
ICT Rural Development
§
E-Skills
§
International Programme
§
ICT SMMEs Development
§
SOEs
oversight
§
Budget versus expenditure
The Acting DG gave a brief performance
overview of each of the issues listed above, explaining in detail the issues
that required clarity.
9. The
legislative programme
The Acting DG subdivided his legislative
programme presentation into four parts; ICT policy review, lending, borrowing
and investment policies, Electro-communication Amendment Bill and ICASA
Amendment Bill that were both at an introduction phase at Parliament.
The ICT Policy Review is a culmination of
the ICT Colloquium that was held on the 19
th
and 20
th
of
April 2012. The purpose of the colloquium was a pro-active consolidation of
expert views on ICT policy for the benefit of
The lending, borrowing and investment
policies of the department refer in particular to the corporatisation of the
Post-bank. And to date, policies on lending, borrowing and investment policies
by the Post-bank have been approved by Cabinet, and have been submitted to the
Speaker of Parliament for consideration by the legislature.
The Electronic
Ccommunications
Amendment Bill has been introduced to Parliament however the Acting DG
indicated to the committee that the department will have to brief the committee
of the amendments on a later date so as to enable the committee to participate
effectively in the processing of the amendment Bill. The same applies to the
Independent Communications Authority of South Africa (ICASA) Amendment Bill.
9.1
Broadcasting Digital Migration
The Acting DG pointed out that all the basics
for Digital Migration were in place, this include the local digital content
strategy, the issuing of the RFI for local Set Top Boxes (STB) manufacturing.
He however noted that the court case brought against the department regarding
the management of STB control mechanism was delaying the process. The other
challenge is funding as South African Broadcasting Corporation (SABC) cannot
implement the digital migration without sufficient funding.
9.2
Broadband
A broadband study was conducted and a
report on baseline data on broadband coverage, penetration, speed and cost has
been developed. Following that, a draft Broadband implementation plan has been
developed as part of SIP 15. The Acting DG also made mention of the fact that
about 54% of the identified schools were connected. These are however
connection points only as computers are to be provided by the Department of
Basic Education as per agreement between the two departments. The department
has however taken it upon itself to provide computers soon after installing
connectivity points once the funding it requires is provided.
9.3
Community Radio Stations
An impact Assessment report of Community
Radio stations support programme has been developed and the Terms of Reference
to appoint a service provider to roll-out the infrastructure to community radio
stations have also been developed. The project is part of promoting the African
languages on the one hand while building a content inventory for stations on
the other. About 40 rural based radio stations were ring-fenced and arranged
according to all official languages and taken on a mentorship training
programme on script development for documentary and drama. All District
Municipalities will at least have one Community Radio Station, and will be supported
through the Departments Community Broadcasting support programme.
9.4 ICT
Rural Development
A baseline study for ICT Status in
provinces report has been completed and this includes the benchmarking report.
Business plans for about 61 rural sites has also been developed.
9.5
E-Skills
The Departments e-Skills Institute has
created an environment for e-skills collaboration across business, government,
education, civil society, organised labour and international development
agencies.
The Institute has also undertaken a
collaborative review of its National e-Skills Plan of Action (
NeSPA
2010) and developed
NeSPA
2013 to guide its efforts over the next two years and align them with the
NDP-Vision 2030. The biggest success according to the department however is the
fact that the Minister has signed off the Integrated
Entity
(
IE) which is now well positioned to
harness existing resources in the country to develop new approaches to the
coordination of appropriate capacity development using its multi-stakeholder
platform to contribute to the
massification
of
e-skills delivery at all levels. The target is to increase the levels of
e-astuteness of 10 m South Africans over the next five years and thus build an
informed consumer base for new ICT enabled service delivery processes of
government, business, education and civil society.
9.6
International Programme
The Acting DG explained
9.7 ICT
SMMEs Development
The e-Commerce Platform as a marketing tool
has benefited Small, Medium and Micro Enterprises (SMMEs) especially in Limpopo
and the
9.8 State-owned
enterprises (
SOEs
) oversight
A project to review the Articles of
Association of State owned enterprises (
SOEs
) under
the jurisdiction of the Department of Communications was undertaken, which was
followed by the drafting of a Memorandum of Incorporation for SABC, South
African Post Office, Sentech,
Nemisa
and UAASA.
Quarterly monitoring of
SOEs
has been undertaken and
all quarterly reports reviews and feedbacks given to
SOEs
to rectify areas identified as challenges. However, it must be noted that
failure of
SOEs
to comply with deadlines for submission
of documents as well as failure to achieve certain targets set in
Corporate/Strategic Plans is proving to be a challenge.
10.
Budget expenditure for 2012/13
The Department of Communications
approximated R1, 6 billion from National Treasury for the financial year
2012/13 and transferred about R1, 2 billion of this
amount
to the relevant
SOEs
, as indicated in the table
below:
Table 10.
(a)
Entity name
|
Transferred amount
|
Expenditure %
|
|
|
|
USAASA
|
59 801
|
100%
|
USAF-
|
43 977
|
100%
|
Set Top Boxes
|
230 000
|
100%
|
ICASA
|
405 797
|
100%
|
SABC
|
154 152
|
100%
|
Channel
|
43 292
|
100%
|
Sentech
|
165 834
|
100%
|
NEMISA
|
34 116
|
100%
|
SAPO
|
51 965
|
100%
|
SABC: Production
|
10 000
|
100%
|
Community Radio
|
8 000
|
95%
|
.za Domain Name Authority
|
1 500
|
100%
|
Membership fees
|
21 383
|
100%
|
NEPAD
|
0
|
0%
|
Skills Development Levy
|
0
|
0%
|
TOTAL
|
1 229 818
|
100%
|
The Department identified about five of its
key priorities for the 2012/13 financial year as part of its Strategic Plan,
and these are;
§
Broadband
§
Broadcasting Digital Migration
§
E-Skills
§
Post-bank
§
ICT Policy Review
Other key priorities
§
Public and Community Broadcasting
§
ICT Research
§
Radio Frequency Spectrum
§
Cyber Security
The department identified the following as
strategic risks associated with its key priorities:
§
Delays in meeting national and international timelines on Broadcasting
Digital Migration;
§
The possibility of delays in finalising the ICT Policy Review within
committed timelines;
§
The inability to achieve 100% Broadband penetration by 2020;
§
The human resource skills capacity constrains;
§
The optimal functioning of State owned enterprises under the
jurisdiction of the department as the service delivery arm of government;
§
Budgetary constrains that might affect certain projects carried out by
the department
e.g
the digital migration project.
Of
great concern however to the Department of Communications is the funding
shortfall identified in some of the
SOEs
required to
fulfil their mandates. Below is the table showing the extent of the shortfall
among
DOCs
SOEs
:
Table 10.
(b)
Entity name
|
Amount requested
|
Funds allocated
|
Shortfall
|
|
|
|
|
ICASA
|
406 111
|
132 000
|
274 111
|
SABC
|
7 326 318
|
138 000
|
7 188 318
|
Sentech
|
308 000
|
0
|
308 000
|
USAASA/USAF
|
2 695 382
|
0
|
2 695 382
|
SAPO
|
5 068 001
|
0
|
5 068 001
|
MEMISA
|
55 652
|
0
|
55 652
|
E-Skills
|
884 136
|
0
|
884 136
|
ICT Rural Connectivity
|
3 020 000
|
0
|
3 020 000
|
Community Broadcasting
Support
|
131 000
|
0
|
131 000
|
11.
Oversight priorities for the Select Committee
on Labour and Public Enterprises
In
light of the departments strategic plans (and annual performance plans)
presentations before the Select Committee, the Committee resolved to align its
oversight responsibilities with those outlined in the Presidents State-ofthe-Nation
Address, and for long term purposes those contained in the National Development
Plan,
and also to ensure that
departments that fall under its oversight jurisdiction also align their
operational plans to achieve Vision 2030 as espoused in the countrys National
Development Plan. Thus, as the Select Committee approaches the end of the
fourth parliament, its focus will mainly focus on the following key areas:
11.1 Department of Labour
§
The processing of the Department of Labours amendment bills;
§
Overseeing the Decent Work Country Programme as well as job creation
and youth employment set-aside-incentives (especially the Accord signed by the
department and various key stakeholders on skills and employment);
§
Monitoring the skills development programme across provinces;
§
Overseeing the strengthening of the departments inspectorate services
to improve compliance by employers;
§
Overseeing and monitoring the Compensation Funds turnaround strategy.
11.2 Department of Public Enterprises
§
Overseeing the introduction and processing of the Shareholder
Management Bill by the Department of Public Enterprises;
§
Financial sustainability of State-owned companies including monitoring
their turnaround strategies;
§
Overseeing the infrastructure build programme especially the
construction of both
Medupi
and
Kusile
power stations. This includes
Transnets
infrastructure programme by ensuring that all these projects are completed on
time.
11.3
Department of Communications
§
The processing of the Department of Communications amendment bills;
§
Monitoring the outcome or recommendations of the ICT Policy Review;
§
Monitoring the corporatisation of the SA Post-bank;
§
Overseeing and monitoring the digital migration process from analogue
to digital;
§
Ensuring through oversight that the digital divide is narrowed by
making ICT services accessible to rural communities across provinces;
§
Monitoring the establishment of community radio stations
The Committee will ensure
regular interaction with the respective departments through reports,
parliamentary presentations and updates on turnaround strategies. This will be
done taking into account the interests of provinces and the people in those
regions. Furthermore, the Committees oversight visits will always attempt to
reach as many stakeholders as possible including relevant community leaders to
assess the impact of service delivery by the relevant departments. The
intention will be to ensure that the relevant departments deliver on their
mandates to improve the peoples lives for a better life for all.
12. Conclusion
As Parliament approaches the
end of its fourth term, legislative oversight over the executive arm of
government is likely to be more vigorous and intense as government would like
to ensure that all targets are met. Departments on the other hand will have to
improve the pace of service delivery as a way of concluding their five-year
strategic plans, this include processing outstanding Bills. In other words,
both the legislature and the executive arm of government will be a little
busier as the country approaches the end of the fourth Parliament.
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