ATC121121: Report of the Portfolio Committee on Women, Children, and People with Disabilities on the oversight visit to Gauteng Province from the 18 – 22 June 2012, dated 14 November 2012

Report of the Portfolio Committee on Women, Children, and People with Disabilities on the oversight visit to Gauteng Province from the 18 – 22 June 2012, dated 14 November 2012

The Portfolio Committee on Women, Children, and People with Disabilities (hereafter refer to as the Committee), having undertaken an oversight visit to Gauteng Province , reports as follows:

1. Introduction

The Portfolio Committee on Women, Children, and People with Disabilities undertook an oversight visit to Gauteng Province from the 18 – 22 June 2012.

2. Background

The Committee adopted a themed approach to address issues related to its target groups. Its theme for the 2012/13 financial year is focused on employment opportunities and skills development for women and people with disabilities. In light of this theme, the Committee engaged with the Departments of Labour and Trade and Industry to assess the impact and implementation of programmes in this regard.

3. Objectives

The objectives of the visit were as follows:

• To assess access to programmes/services with regards to employment opportunities for women and people with disabilities;
• To identify opportunities for women and people with disabilities with regards to skills development and empowerment opportunities.

4. Delegation

The delegation was comprised of the following Members and officials:

Ms D Ramodibe (ANC, leader of the delegation), Ms M Nxumalo (ANC), Ms P Petersen- Maduna (ANC), Ms GK Tseke (ANC), Ms H Lamoela (DA), Ms E More (DA), Ms CB Diemu (COPE), Ms S Paulse (ID) and Ms IC Ditshetelo (UCDP). The delegation was accompanied by the following Parliamentary staff: Ms N Nobatana (Committee Secretary), Ms K Abrahams (Committee Researcher), Ms C Levendale (Committee Researcher) and Mr D Woodward ( Committee Assistant).

5. Organisations visited

The Committee visited programmes funded by the Department of Trade and Industry (DTI), National Empowerment Fund (NEF) and Small Enterprise and Development Agency (SEDA). In addition, the Committee visited Lesedi Cooperatives, Ikemeleng Basadi Cooperative, Ringane Laundry, Curviro Trading, Seahawki Investments, Medunsa Organisation for Disabled Entrepreneurs, Tawana Business Projects, Afripotego and Value Cement Projects. In terms of Department of Labour initiatives, the Committee also visited Sheltered Employment Factories for people with disabilities.

6. Department of Trade and Industry (DTI)

The Department held a meeting with the officials from the DTI on incentives and business support for women entrepreneurs.

6.1 Overview on the DTI incentives and business support for women Entrepreneurs

The Deputy Director General for Enterprise Organisation informed the Committee that the Department was allocated R7 billion for the financial year 2012/13 and R5 billion was allocated for business related programmes . In addition, the Department also focused on the broadening participation, competitiveness, manufacturing investments and infrastructure investments programmes .

(i) Broad Participating Programmes

The programmes include the Black Business Supplier Development Programme (BBSDP) and the Cooperative Incentive Schemes (CIS). The Department allocated R40 million towards BBSDP for 2011/12. This programme provides incentive opportunities that promote broadening participation by historically disadvantaged communities and marginalised regions in the mainstream of the economy. Moreover, the programme assists small business in townships and in rural areas by providing grants and skills development, marketing and quality standards up to R200 000. It also assists with technology programmes to acquire machinery up to R1 million on a 50/50 basis. 39% or 120 of total applications approved were from female owned enterprises across the provinces for the financial year 2011/12. 44% or 53 applicants are from Gauteng , 19% from Limpopo and 12% from the Western Cape Provinces . 32% or R29 million of the total incentive value approves was allocated for female owned applicants. 47% (R14 million) is from Gauteng and 21% or R6 million from Limpopo Province respectively.

The Department also assists rural cooperatives through the Cooperative Incentive Scheme. The purpose of the scheme is to encourage broader participation by promoting the development of cooperatives. The Department approved 1 361 cooperatives of which 60% or 820 are females. 28% are from Limpopo, 27 % from KwaZulu-Natal and 19% from Gauteng . 231 or 17% of all cooperatives members are youth and 27% are from Limpopo, 26% from Gauteng and 19% from KwaZulu-Natal . 14 or approximately 1% of all cooperatives are classified as disabled and 64% of the 14 disabled members are from KwaZulu-Natal Province .

The Export Marketing and Investment Assistance assist businesses in marketing themselves. The Department approved 71% of applications of which 24% of approvals were for Small Medium and Micro Enterprise (SMME). These are primarily from the cultural sector such as arts, music etc. Of these SMMEs, 49 are owned by women and 5 owned by people with disabilities. The Gauteng Province has the highest number of black owned enterprises while the most approved women owned enterprises are based in the Western Cape Province . A total of 226 of the Manufacturing Investments Programmes (MIP) projects have female majority shareholders as of 31 March 2012. A total of R738 million was paid to MIP projects since its inception. These projects supported 38 218 jobs.

The members were informed that the Department had offices in 3 Province namely KwaZulu-Natal , Eastern and Western Cape . An ad hoc marketing officer works with Provinces. In addition, the Department had linkages with Provincial Agencies such as the Eastern Cape Development Agency which assist the community to access funding. With regards to criteria for accessing funding, the Committee was informed that there are requirements for accessing funding e.g. for CIS, the project should have 5 members in order to access funding. With regards to awareness campaigns, the Committee was informed that the Department holds imbizo’s , works with municipalities to raise awareness and broadcasts information to communities through radio.

6.2 Lesedi Manufacturing Primary Cooperative

The Lesedi Manufacturing Primary Cooperative is a manufacturing and waste management business that was initially formed by 10 women in Alexandra Township in 2008. This cooperative applied for funding in 2011 and received a grant for equipment (R340 000) for purchasing machines. The business currently provides recycling, collection and separation of general waste or household waste material. The business employs 13 members. The business was also assisted by the National Youth Development Agency in terms of securing funding for office space, office equipment and office furniture. A lack of adequate space to operate the business was noted as a key challenge for the cooperative. The cooperative requested the local municipality for more space. In addition, the cooperative still awaits feedback from the City of Johannesburg to approve the plan for erecting a high fence as required by the Department of Health in terms of health and safety regulations.

6.3 Ikeleng Basadi Cooperative

The Ikeleng Basadi Cooperative has 5 members 2 of who are disabled. The business focuses on manufacturing corporate clothing, school uniforms and traditional attire. School uniforms are supplied to schools mainly in Thokoza , Tembisa and Wadeville area. A grant of R300 000 was awarded by the Department of Trade and Industry to purchase machines such as two head cylinders for embroidery and industrial sewing machines. Of the amount allocated, R16 585 was only spent. A challenge faced by the business was need to secure bigger premises to operate the business. The project intends to expand its business to areas outside Tembisa . The project provides for 5 sustainable jobs.

The Committee was informed that the business is currently using the services of the consulting companies to audit the finances. In addition, it was also noted that if the cooperative required additional funding from the amount that was approved, the project should re-apply to the Department for additional funds.

6.4 Ringane Laundry

The Ringane Laundry was a business started by Ms Emily Ringane who was a domestic worker through the assistance of a friend in 2009. Ms Ringane applied for funding to relocate to a bigger premises within the same area, to purchase dry cleaning equipment (to the value of R370 000) and to establish additional services such as tailoring and shoe repair. The business has employed three people and more are recruited during the festive season and other periods.

During the discussions, the Committee was informed that the Ms Ringane would receive funding after finalising the lease agreement in the new location. The Committee agreed that discussion should be suspended as the owner was not yet the beneficiary of the DTI.

7. Small Enterprise Development Agency (SEDA)

The Committee visited the following SEDA funded projects and also received an overview of the type of services and support rendered by SEDA.

7.1 Overview of SEDA

The presentation on the role of SEDA was made by Mr Slabbert . In terms of SEDA’s infrastructure, it was indicated that there were 9 Provincial Offices, a network of 42 branches, 32 technology incubators nationally, 72 co-location points with municipalities, 48 kiosks, 17 mobile units and 53 Enterprise Information Centres (EIC). SEDA provides business development and support services for small enterprises through its national network, in partnership with other role players in the small enterprise support. It also implements programmes targeted at business development in areas prioritised by the Government. It support process involves SEDA Learning Academy , Customer Relations Management System, SEDA tools and SEDA Smart System. In addition the following services are also provided, mentorship through coaching sessions, one-on-one monitoring with sector specialist, post-finance mentorship and a mentor database. The CPPP programme initially dealt with rural areas but has included cooperatives services and collectively owned enterprises.

7.2 Curviro Trading

Curviro Trading was established in 2009 and is owned by a woman. The company started manufacturing body bags and shifted its focus to toilet paper manufacturing. It employs three people including the owner. The business plan of the company was developed and facilitated by a SEDA Technology grant. SEDA assisted with developing business cards, procuring machinery and banners to market the business. The turnover of the company increased from R500 000 to R5.238 664.80 per annum. The company also produces moulds for 2000 Non-Governmental Organisations for abused children between age 3 – 12 years which can be used as toys and in play therapy.

In the discussion with the Committee, the owner indicated that two machines were purchased in order to produce toilet paper for R250 000 from the company’s own turnover. The company has been operating for the past 3 years. The owner also indicated that she attended training on entrepreneurship and mentoring programmes offered by Goldman Sachs-Gibbs.

7.3 Seahawk Investments Laboratory

Seahawk Investments was established in 2012 and is owned by two women. It manufactures bacteriological media culture. The company has a staff compliment of 7 people including the owners. The business plan of the company was developed and facilitated by access to grants by SEDA. The turnover increased from R0 to R3.316 867 per annum.

The business received R600 000 from SEDA for manufacturing equipment which was paid to the supplier after 2 years after they submitted their application. Furthermore it was indicated that the company had accessed R400 000 and still have access to the additional R200 000. The owners indicated to the Committee that the key suppliers of the products which the laboratory produces are for private laboratories as the Department of Health has not been forthcoming in procuring their services. No people with physical disabilities were employed at the laboratory due to the nature of the job requirements and the poor physical accessibility.

The key challenge faced by the company was attributed to difficulty in accessing funding from SEDA when priorities have changed due to their policies. Moreover, as noted previously, the owners indicated that the National Health Laboratories Services refuses to buy products from the company and requested assistance from the Committee in that regard. The other challenge indicated was space to operate their business as they intend to employ more people but cannot do so due to availability of space.

7.4 Furn Tech Incubator

The Incubator specialises in manufacturing furniture in a supportive environment for young developing entrepreneurs within a structured programme. It provides technical support for learning to operate machines and facilitates networking opportunities with organisations such as SEDA and other financial institutions to assist people to start their own business. The Incubator also assists in terms of assessing the quality of furniture produced. In the second phase of the programme of support rendered by the Incubator, entrepreneurs are assisted to compile development plans for 2 years which looks at gaps and challenges and how to deal with challenges. Overall the Incubator provides skills and information on establishing, managing and growing a business.

At the time of the visit, the centre housed and assisted 3 businesses that were owned by women. The key challenges related to the gender stereotypes on furniture businesses which is largely male dominated and the overall lack of people with disabilities employed. However, the Incubators in other provinces have responded to including and training persons with disabilities. Hence, 30 deaf persons were trained in the Kwa -Zulu–Natal and the Eastern Cape Provinces and were supported by municipalities in the Eastern Cape .

8. National Empowerment Fund (NEF)

The Committee visited the National Empowerment Fund (NEF) projects. The Committee was briefed by the Chief Executive Officer, Ms Buthelezi and Ms Makhathini , Divisional Executive: Venture Capital and Corporate Finance.

8.1 Ahanang Hardware Construction CC

The company is a 100% black woman-owned business established in 1998. Its core business relates to construction and the retail of building products. Ahanang was outsourced by the National Home Builders Registration Council (NHBRC) to inspect newly built houses. The project received R2.5 million from NEF in March 2008 to ensure that different stages of all residential homes constructed in Gauteng meet the NHBRC standards. The company was also contracted by MTN South Africa to refurbish warehouses/call-centres in Mount Edgecombe in KwaZulu-Natal and High Volume Repair Centre in Midrand . Currently, the project received R8.750 million in January 2012 for Kalagadi Manganese Project. The company created 48 temporary and 39 permanent jobs.

The company was also outsourced by NHBRC in the Eastern Cape Province in June 2010 – June 2011 to ensure that residential homes constructed meet the NHBRC standards. The project employed 3 local women subcontractors and also trained and employed local women. They completed 400 housing units between August 1998 and January 1999. In the Thabo Mbeki Town in Ellisras , Ahanang completed 1000 housing units in 2 years. To this end, more than 100 women were trained and employed in making bricks, glazing and so forth.

8.2 Tawana Business Projects

Tawana Business Projects is a female owned company involved in the construction of low cost residential houses. The company received R5 million from the NEF and has created 70 temporary/subcontractors and 15 permanent jobs. The company has two shareholders and has tendered and completed the following projects:

· 2007: paving projects for Benoni Dog Unit for the Department of Public Works, The value of the contract was R0.7 million.

· 2008/09: Implementation of infrastructure development of 110 poultry units and 44 hydrophonic units for different farmers in Gauteng . The contract value was R9.1 million. 50 RDP houses were built for the developer Fikile Construction at Ivory Park in Tembisa at a subcontractor value of R1.25 million.

· 2010: Construction of the Regional Community Centre at Freedom Park for the Rustenburg Local Community at a value of R4.6 million.

· 2011: Construction of 50 RDP houses for the Rustenburg Local Municipality in Rasimone Village in Rustenburg. The contract value of R3.6 million.

8.3 Afripotego

The company received R2.75 million from the NEF and has created 37 full time jobs of 12 are women and one is a person with disabilities. It is involved in building RDP houses in Soweto . In its interaction with the Committee, the owners indicated that the company started operating as an IT Company from 1999-2007 servicing uThingo with 24 people. In 2008, the company supplied material to Khumbula Company at R2.6 million. In addition, 241 houses were built in 2009 within 8 months. In 2010, the company was contracted to build 655 houses but only completed 100 houses. The Committee was informed that the company employs different sub-contractors to perform different tasks when building houses. The challenge that the company faces relates to houses that have been built but have no electricity due to illegal electricity connections. Moreover, the company’s key challenges relates to the lack of requisite financial and management skills to adequately manage the company’s finances.

8.4 Value Cement

Value Cement has been operating for 4 months and is a black owned company with 43% women shareholders. It blends, produces and sell cement to a wide range of customers. The company received R35 million from NEF and has created 50 jobs. 30 staff members are operating in the plant and there is no person with disability employed in the company. The company intends to train women on fork lifting and also intends to employ people with disabilities in future. Members were informed that the company produces 400 000 bags of cement per month and 10 000 per day. In addition, it was also indicated that the company has a contract with Micon to distribute cement for 5 years. Finally, the company indicated the key challenge related to transport to deliver the products to clients and the need to acquire vehicles in order to do this at the company’s expense.

9. Visit to Sheltered Employed Factories in Gauteng

The Committee received a briefing from the Chief Executive Officer, Mr Nondwangu . Mr Nondwangu indicated that Sheltered Employment Factories (SEF) was established more than 65 years ago to provide employment opportunities for people with disabilities. These facilities were inherited by the Department of Labour and it has developed a turn-around strategy aimed at converting SEF into entities that have a clear and definable legal status, operate as efficient entities and serve to advance the Government’s national agenda on active participation in the economy of the country by people with disabilities. The presenter further outlined the vision of the factories, i.e. that of establishing a national framework of factories and factory outlets that can contribute to the economic empowerment of people with disabilities and that support metropolitan, rural and local community organisations and enterprises. The mission is to provide employment and training opportunities to people who have been excluded from work as a result of their disability and to support their transition into mainstream employment. Currently, the factories employs 1050 people with disabilities and 212 technical support and administration support staff. There are 12 factories located in 7 provinces with Limpopo and Mpumalanga being the two provinces without factories. These SEF are located in all major cities of the country such as Bloemfontein , Cape Town , Durban , East London, Johannesburg , Kimberly, Pietermaritzburg, Potchefstroom and Pretoria .

In terms of marketing interventions, the factories have signed a Memorandum of Understanding (MOU) with the Department of Basic Education to manufacture and deliver school furniture in the Eastern Cape , KwaZulu-Natal and the Free State Provinces . The Department of Labour are also discussing a project with the assistance of the Commissioner of the Compensation Fund that will see the SEF manufacturing hospital linen and uniforms for the public healthcare industry. Moreover, the Department of Labour are also working with the Public Employment Services (PES) to manufacture and provide fully equipped and functional resource centres to be piloted in the provinces of Mpumalanga , KwaZulu–Natal and North West . With regards to human resources, the SEF financial situation has led to a decrease in the number of people with disabilities employed by these factories from 3000 to 926. With the initiation of a project with the Department of Basic Education, the SEF will be able to employ and train more youth and people with disabilities. The presenter indicated that KPMG was contracted by National Treasury/Department of Labour to provide support in the development of a business case and transformation plan for Sheltered Employment Factories. The purpose of the contract was to:

· Review situational analysis done by previous consultants

· Review SEF options done by previous consultants

· Develop business case for preferred option

· Develop implementation plan.

In the interaction with members of the Committee, the presenter indicated that for the SEF in Johannesburg , the building belongs to the Department of Public Works and that the management of the Department of Public Works would invest in developing ramps. Given the challenges faced by the Department of Public Works, this made it impossible to deal with the accessibility of buildings. In terms of establishing sheltered employment factories in Limpopo and Mpumalanga Provinces , the presenter indicated that the Department of Labour has a turn-over strategy to deal with the establishment of SEF.

The Committee was informed that factories used to have psychologists and social workers visiting the factories but currently a nurse visits the factories on a monthly basis. In terms of strategies for SEF, the Committee was informed that the factories were established based on Memorandums of Understanding and these has been revised after 1994. To this end, the revised strategy ensures that the factories would become a Government component and the National Treasury would provide financial assistance to increase marketing and sales. These factories intend to increase sales up to R250 million which would assist to employ 2000 people with disabilities and to establish factories in Limpopo and Mpumalanga . With regards to assessment of employee’s prior employment, the personnel officer ensures that people with physical disabilities and visual impairments are assessed. The Committee was also informed that the management used the database of the Department of Labour and also consults other organisation to recruit people with disabilities.

In terms of marketing products/services of the factories, management of the factories was meeting with the National and Provincial Departments with regards to preferential procurements and marketing of the products of the factories. The Committee was informed that the SEF was collaborating with the Department of Women, Children and People with Disabilities on projects in Limpopo and Mpumalanga Provinces . In addition, the Committee was also informed that there were Department led projects to train young people in Pretoria and that a programme was developed to access funding with the IDC in terms of the job fund.

10. Observations

Having interacted with stakeholders, the Committee made the following observations:

Department of Trade and Industry, NEF and SEDA

• The Department of Trade and Industry was unaware of the location of the projects that were visited. This raised concerns as to how then the Department was monitoring and evaluating these projects.
• The Committee noted with concern that the DTI, NEF and SEDA have few projects for people with disabilities bringing into question the extent to which the Department was mainstreaming disability into its programmes.
• The Committee noted with concern that the Ikemeleng Basadi Cooperative project was awarded with funding but no financial and business training was offered to the women concerned.
• The Committee was concerned about the accessibility of NEF funding as the NEF had indicated that it operates on a demand-driven basis.
• The Department’s awareness strategies were not reaching many communities especially rural communities which was concerning.
• The Department has not reached the 2% Employment Equity target for people with disabilities

Department of Labour - SEF

• The absence of a formal relationship between Government Departments and Sheltered Employment Factories to procure goods and services was concerning.
• The Sheltered Employment Factories were not utilising the services of the NEF in terms of mentoring and designing business plans which would assist them in implementing its programmes.
• The awareness strategies were not reaching the communities especially women from rural communities.
• The Sheltered Employment Factories appeared to be neglected in terms of transforming them into viable business entities this despite numerous and longstanding Government funding.
• The lack of qualified professionals such as Occupational Therapists and Psychologists to assess persons with disabilities at SEF was extremely concerning. The implications of this were that persons with disabilities would not receive optimal work placement or support.
• Other concerns noted by the Committee related to minimum wage of workers, workers’ right to be affiliated to organised trade unions, lack of career pathways within SEF and to acquire accredited skills to obtain work in the open labour market.

11. Conclusion

Having met with the relevant stakeholders and the Department of Trade and Industry as well as the Department of Labour, the Committee commended the Department of Trade and Industry and the entities for providing funding for projects related to women and requested the Department to strengthen the 2% Employment Equity target for people with disabilities and mainstream disability into programmes and services rendered. Finally, sheltered employment factories require a review and attention in order for such establishments to become viable business entities for the economic empowerment of persons with disabilities.

12. Recommendations

Having interacted with stakeholders and made observations, the Committee recommends as follows:

Department of Trade and Industry, NEF and SEDA

The Minister should ensure that:

• The Department and its entities strengthen its monitoring and evaluation strategies;
• The Department and its entities increase awareness about and accessibility to their programmes and funding;
• The Department and its entities provide training such as management and financial skills to women and people with disabilities;
• The Department expedites the process of reaching the 2% target for employing people with disabilities; and
• The Department includes issues related to people with disabilities in its programmes and budget.

Department of Labour

The Minister should ensure that:

· The turn-around strategy for SEF is expedited and implemented;

· A review of SEF is required to ensure that the conditions of service and the working environment for workers with disabilities are improved; and

· Due attention is given to the establishment of SEF in Limpopo and Mpumalanga .

Department of Women, Children and People with Disabilities

The Minister should ensure that:

• The Department follows up the establishment of SEF in Limpopo and Mpumalanga provinces with the Department of Labour.

Report to be considered.