Deep Breathing Is the Order of The

Hof Communications Cape Town

10 December 2017 This editorial is the opinion of the editors of ParlyReport

Deep breathing is the order of the day fter having endured so many of President Jacob Zuma’s cabinet reshuffles, most of them in his A own interests, it is painful to think that in all probability there is still one more shuffle to go. In the past, this regular passing of the hat has allowed minister after minister to side-step the truth and report to Parliament on a “it wasn’t me” basis. It has been the bane of Zuma’s presidency and in many cases the cover up for wholesale corruption and the ineptitude of some of those anointed. When the music stops… So, it is with trepidation that Parliament awaits another round of new ministerial faces which will probably coincide with a new round of appointments of chairperson of committees, let alone some new faces in the benches. This is all at a time when the economy sits at tipping point.

Once again, the parliamentary telephone directory will be at the mercy of ever-changing power battles within the governing party, a minor matter it may seem, but which somehow represents the country-wide breakdown in communications across of whole section of the governance and political spectrum. It occurs every time cabinet portfolios get switched around.

This waiting period for new faces is the same as the usual vacuum before an election. In this case, however, the ordinary Joe has no say in outcome. In an election, one sees a manifesto of beliefs, values, policies and an appeal to the electorate. In this case it is a choice between more of the same, less of the same, or if unity wins, how many compromises there will be. Fruitless and wasteful To put it simply, in the case of Parliament we shall be learning who will be picking up the ministerial pack of cards and who will be contributing to the promotion of nearly fifty pieces of legislation from tabling to law.

The current power battle within the ANC will tell us, for example, who will be finalising a stalled and messed up Minerals and Petroleum Resources Amendment Bill; a confused Border Management Authority Bill; a Land Reform Programme from Rural Affairs that has got muddled up with an Expropriation Bill from Public Works; a Communications Bill that has totally shaken the confidence of its industry sector and a Management Shareholding Bill for SOEs that is now tainted with violations of the Public Finance Management Act.

We shall also learn what shape the energy mix is to take, the exact extent of the nuclear component in it and how the urgent issues of land reform, education and health are to play out in terms of what

little money we can borrow under tough conditions. Most importantly, Parliament will be asked to approve a budget drawn up by the winner.

We put odds on the current President having much to do with the outcome of the ANC National Conference. His past performance shows that he is a master at political manoeuvring and no doubt business and industry will somehow be painted with the brush of the Steinhoff affair during deliberations. Spiral Throughout the last year, most of those watching the political circus being playing out believed it simply could not get worse. Yet, month by month, it did. Some of the more lurid aspects of the oversight process have played out on our television screens. Under this kind of pressure, the bar has been seen to drop on the ability of public servants to tell the truth.

In another Parliament on 6 December, Lord Peter Hain, when introducing a Money Laundering Bill Amendment, said to the British House of Lords, “My Lords, in recent weeks I have again been stunned by the systemic transnational financial crime network facilitated by an Indian-South African family, the Gupta’s and the Presidential family, the Zuma’s.”

Copybook example He was introducing the amendment to try and catch up on the millions of British pounds being laundered through Standard Charter and HSBC by Gupta family shell companies to and from business associates.

He went on to show to the assembled House of Lords much of the documentation involving 27 named persons associated with the Vrede Dairy Project embezzlement, a community project scheme paid for by the SA the taxpayer which simply had “disappeared”.

We know now, said Peter Hain, that the departure of this money from South Africa was carefully orchestrated by means of international money laundering bank transfers to pay for a R30m over- the-top Gupta family wedding at Sun City back in South Africa, over ten transfers being used to hide the pilfering of state funds before it arrived back in South Africa. More than just theft Lord Hain had every detail of the forensic trail of the money appropriated for the Vrede project at his fingertips both to justify his amending Bill and ready to pass on to investigating international bank authorities. He said, “Whilst this was not only an obscene gesture of opulence, this manipulative plan of greed left eighty black farming families in the Free State destitute”.

In both countries the parliamentary process of learning the truth is playing out well. Hopefully, the Free State case will soon earn the same attention in the US Congress, the UN Assembly and the EU in Brussels whom Lord Hain has notified, as well as with the Hong Kong and Dubai authorities. Not just on this case but a whole host of other shady deals with South African SOEs.

The FBI is already in action as is the UK’s Serious Fraud crime unit, Britain’s Chancellor of the Exchequer passing an investigating note to UK banking authorities.

Legacy As a rather sad result, we shall never be allowed to forget the years that Jacob Gedleyihlekisa Zuma was at the helm of this country, nor those Ministers who have surrounded him constantly telling him that he was wearing clothes.

They will all be part of Hansard in the Parliamentary library, more book launches, plenty of documentaries and hopefully we shall see some action by what has failed us most in South Africa, the outrageous combination of the Hawks and the National Prosecuting Authority who have only been notable for their silence.

People power But it has also been a year in which civil society has responded and have joined OUTA and Corruption Watch and others in a lonely battle to acquire the truth. AmaBhugane started the ball rolling with the Gupta e-mails and Jacques Pauw added momentum bringing us to the point that we now learn the FBI are around the corner with the UK’s Serious Fraud Unit also on the trail.

We have learned as well along this rocky road that Parliament is a situation as much as an institution. There is constant movement. Every day is different. En garde! It will now be for Parliament to stop some of the more outrageous state capture moves such as interference in Treasury matters by forming a presidential fiscal spending committee based from Tuynhuys. This is the route to anarchy and takes a swipe at the parliamentary Standing Committees on Finance and Public Accounts. But these are hurdles to come if state capture is to be un-stitched.

The genie is now out of the lamp, hopefully, but Parliament in 2018 will still be like a battleground. As shadow minister of public enterprises, Natasha Mazzone (DA), amusingly shouted in challenge to state capture adherents, it is now time to “Bring it on!” Previous editorial Parliament SA: the top half of the iceberg.. - ParlyReportSA

Headlines:  Editorial: Deep breathing is the order of the day  AG to have consequence management ability  Mahlobo tough on nuclear but explains energy mix delays  Competition Commission gets mandate to study markets  Labour matters flood in, plus three new Bills  Cabinet determined on Border Management Bill  International Arbitration Bill favours SA exporters  CEF’s future; LNG imports; refinery possibilities and fuel specs  Watershed Communications Bill gets more time  Legislation tabled and pending in Parliament for recess

Parliament to beef up powers for Auditor General

new parliamentary Bill to enable the Office of Auditor General (AGSA) to implement A consequences in respect of irregular, unauthorised, fruitless and wasteful expenditure exposed in audit processes, is now well underway. It is the result of a considerable effort by parliamentarians across party lines in the Standing Committees.

The Bill, the Public Audit Amendment Bill, has been fast tracked by the Parliamentary Committee Auditor General chaired by Vincent Smith (ANC) before the close of Parliament for the Christmas recess. This was speeded up to obtain the Speaker’s permission to have it tabled early in the new 2018 session and hopefully implemented before the year end. There is no reason to expect the Speaker not to approve the call. Home grown As distinct from a Bill introduced by a minister where Cabinet approval is required, the Public Audit Amendment Bill will be a product of Parliament itself. Its content is largely guided by the Parliamentary Legal Advisory team and accompanied by the legal policy department of the National Treasury has also joined in, which is extremely good news.

Justification and crafting of the document has been the product of ANC, DA, EFF, IFP and COPE MPs with a common aim. Joint attendance at times was in the form of Themba Godi (APC) Chairperson of the Standing Committee on Public Accounts (SCOPA). Tougher stuff Themba Godi SCOPA) has been a long-time exponent of calling for additional powers for the Auditor General, particularly the ability to call for prosecution on criminal issues and the ability to collect monies owed by state entities and municipalities for auditing performed.

Early in the meetings committee members acknowledged the Auditor-General’s (AG Kimi Makwetu) comments that not only was there irregular, unauthorised, fruitless and wasteful expenditure in all three tiers of government entities, but also there was failure to submit financials for audit; failure by the entities to remit surcharges for deviations; and failure to pay AGSA its audit fees resulting in a threat to AGSA viability. Bill please In a further meeting this year, Chairperson Vincent Smith called upon the Parliamentary Legal Advisory (PLA) team, led by Adv. Frank Jenkins and Ms Fatima Ebrahim, to prepare a Bill to deal with not only the irregular, unauthorised, fruitless and wasteful expenditure issues but also what was referred by AGSA staff as “malicious compliance by departments and the non-action from institutions as a result of AGSA expressing an adverse opinion on their audits.”

He said AGSA in carrying out national and provincial audits under the Public Finance Management Act (PFMA) with a March year-end and local government audits under the Municipal Finance Management Act (MFMA) with a June year-end, meant AGSA audited some 900 institutions.

This was a heavy load, he said, added to which there was often no assistance at all given by the government entity under audit.

Fault lines AG Kimi Makwetu gave an extensive list of what AGSA was constantly picking up in audits that was unacceptable, such as breaking a tender down into halves or less so that tender processes would fall into lower thresholds to avoid notice; not being able to provide backup documents to support what appeared to be unusual or suspicious money movements or just no response.

Common occurrences were EFTs not controlled with oversight mechanisms which allowed use of supposedly secret passwords to gain access to an EFT system and pass credits into personal bank accounts. Issues constantly surrounded the areas of state procurement, the AG said. No pain, no gain AGSA was worried, he said, that they probably only picking up the tip of the iceberg because of general non-compliance with the PMFA and failure to make returns. Irregular behaviour was continuing because there was no consequence management built into the system.

Criminal activity was encouraged by AGSA’s continued inability to bring remedial action into play, said the AG, due to the lack of powers granted to AGSA to apply penalties or bring criminal proceedings.

Further meetings have followed with the PLA team producing a draft Bill to correct much of what is wrong in the system. Other related issues have been subjected to finer definitions by the Committee over the last six weeks. A draft is now finally approved by MPs, subsequently approved by AGSA and by AGSA’s legal advisor, Adv. Marissa Bezuidenhout, ready to go into the 2018 session. Crime cases On the question of powers where criminality is uncovered by audit, Themba Godi said the point had been raised during SCOPA committee meetings on how to bring about substantive change to decision making on the possibility of prosecution.

Up until now, Godi said, the issue was left to either to a Minister or the DG of the department to take an AGSA certificated case to the Hawks or the Public Protector. Not one instance of this being achieved had been observed according to report backs received.

Themba Godi said this issue had to be made the focus point of all future discussions if major changes were to come about in areas of corruption and wasteful expenditure by state officials. A harsher environment had to be created, he said, to counter the wish to manipulate figures or divert funds. No effective change would come about until this was achieved, the Committee was advised. Call in SIU Godi insisted that the most appropriate institution, out of all others, to handle such matters was the Special Investigating Unit (SIU) and this was because of how they worked. He pointed out to MPs that the SIU investigates instances of maladministration and would be able therefore to produce the right kind of forensic accounting information for the purposes of disciplinary actions.

They also serve themselves as witnesses in cases brought before the courts, he said.

He emphasised that SIU was able to identify, in a forensic accounting sense, the perpetrators and thereby isolate criminal incidents with the ability to go to civil litigation. Cases could then be referred directly to the National Prosecuting Authority (NPA) for prosecution with strong forensic back up which the NPA would find difficult to refuse.

Way round the top Alan McLoughlin (DA) pointed out that the SIU only undertook investigations on the instructions of the President and the purpose would be lost, as far as impartiality was involved, if the Presidency “had to give the go ahead.”

Themba Godi said in that case the SIU Act would have to be amended follow the main legal instrument by making the reasonable and constitutionally correct decision that presidential endorsement was not applicable to matters brought forward by the AGSA. This would leave AGSA with an ability to decide what the “relevant body” was, if this expression was the one to be used.

Chair Vincent Smith said the legal team would look at this and MPs agreed unanimously to proceed. Draft Bill arrives Fatima Ibrahim, Parliamentary Legal Advisor, in a very recent meeting has recently taken the Standing Committee through the various areas of a proposed Bill, clause by clause. Present for this presentation were AG Kimi Makwetu and AGSA’s Audit Committee chairperson, Peter Moyo. (Old Mutual ex-chairman Vodacom)

After matters were debated mainly involving issues surrounding AGSA audit fee collections and budgeting processes, no substantive changes were made to the Bill. It is now ready for tabling probably preceded by public comment. Treasury arrives Coming before the Standing Committee has also been Karen Maree, Director of Accounting Policy, National Treasury (NT), who told parliamentarians that her department had already been in discussion with AGSA, but mainly on issues surrounding the charging of audit fees and issues surrounding AGSA’s revenue streams and budgeting processes.

On fee costs, it appears that AGSA’s audit fees are way below those charged by contractual outside auditors, both on hourly rates. Sadly, AGSA have acquired a massive debtor’s ledger for unpaid audit fees from some 79 state entities, from local government upwards, all with no collection ability other than a rude letter. Imposing surcharges To assist in tackling this issue also, NT had agreed the new proposed Public Audit Act Amendment Bill having various provisions to assist AGSA in revenue collection by the granting of additional powers and ability to levy transfer surcharges and to instruct them to be for the account of an individual and to litigate in civil court instances.

AGSA said that they had entertained the idea before but without the legislation to back them up “it was like suing oneself or your own family since, they said, it would be “the state versus the state” in papers. Pay up or else It was not clear, however, to what extent the entire Bill has been discussed between AGSA and NT in general terms on criminal proceedings, but Karen Maree of NT indicated that Treasury was limited to their domain of interest in budgeting and allocations of the fiscus. She said Treasury had no concern on the wording of such matters and would leave it to the members drafting the parliamentary Bill.

Also reporting to the Standing Committee and expressing support for the Bill has been Chairperson of AGSA’s own Audit Committee, Peter Moyo. He said despite the outstandings on audit fees, the Audit Committee was satisfied that AGSA had the ability to “trade as a going concern” for the coming financial year.

He said the systems of internal controls at AGSA over the year under review were adequate and could be relied upon as a reflection of their annual financial statements presented and that risk management processes were adequate and operated effectively. On this, Peter Moyo said the new Bill would assist his committee and was satisfied with its effectiveness. Further 2018 reports For the record, Peter Moyo announced his departure as Chairperson of the AGSA Audit Committee as from 1 November and the appointment of John Biesman-Simmons in his place.

The AGSA Audit team would report before Dec 1 this year on issues regarding the appointment of new outsourced auditing bodies, some who did and some who did not meet transformation targets. He said very little had on the KPMG contract issue where very little had changed.

KPMG remained on a one-year contract, reduced from two, but Moyo said the team was relaxed working with them and felt that they had probably weeded out the problem staff. On its way The conclusion at this stage is that it appears that the Public Audit Amendment Act will next be seen as a Bill tabled by Parliament in the New Year and the Chairperson Vincent Smith will be calling for public comment and giving a date for public hearings sometime in March 2018.

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Mahlobo confirms nuclear is part of energy mix

pposition members in the Portfolio Committee on Energy got nowhere on detail after two days O of meetings with new Minister of Energy David Mahlobo in their search for more information on South Africa’s future deployment of nuclear energy power stations, their potential cost and possible building commencement dates.

This was despite a barrage of searching questions levelled at the Minister after his 2-hour presentation under the heading “Energy Strategic Issues”. He covered an immense amount of ground but whilst policy might have been clearer, details on costs and timings were virtually absent. On a whole number of issues, he said that he had “not yet had time to apply his mind.”

However, on the nuclear issue, it became clear during the meetings that as far as the Ministry is concerned, the die is set in principle and that he and the present Cabinet has every intention of implementing inclusion of nuclear energy input to the national grid at some time in the future, maybe as much as 15%, but any detail remains locked up in some Cabinet minds. Marathon Two full days had been set aside for clarity on Department of Energy (DOE) policy on such issues as the finalisation of the Integrated Energy Plan (IEP); the Integrated Resource Plan (IRP) known 7

generically by the term “energy mix”; fuel costs; refinery plans for South Africa; an update on the renewables IPP programme; and a legislative framework overview - all on day one.

On day two, the question of the sustainability of PetroSA and the restructuring of its parent body, Central Energy Fund (CEF), were discussed and the whereabouts of the 10 million barrels of oil representing South Africa’s strategic oil reserves, held previously at the SFF tanks at Saldanha Bay.

Minister Mahlobo was in attendance for the whole two days answering all parliamentary questions himself, not referring once to DOE officials present, including the acting DG of DOE, Tseliso Maqubela. There was a distinct feeling that the Minister wanted no DOE official facing “Yes or No” questions from MPs. The simplest way to achieve such an objective was for them to say nothing and consequently no questioning of what had been said by them would follow.

This only became apparent as the meeting progressed.

Enough is enough Before the Minister had started his presentation, Chair Fikile Majola said that he and committee members had listened to three ministers of energy in three years making promises and the result had been delay after delay on vital issues. He was hoping for change.

As it turned out, although the Minister’s overall briefing on energy issues was indeed comprehensive but it contained very little that was new to the parliamentary committee members. However, what was remarkable was the knowledge shown by Minister Mahlobo on the many issues despite being in his new post only for a short while.

This would indicate that the Minister has probably had an interest in energy matters, particularly the energy mix and nuclear, for some considerable time before he took up his appointment. Jugular On nuclear issues, the Committee did get, after extensive questioning on a “yes” or “no” basis, confirmation that an inter-governmental agreement on nuclear matters had been signed with the Russian State Atomic Energy Corporation (Rosatom) headquartered in Moscow. This was when the Minister was directly asked by new shadow minister of energy, Gavin Davis, about his reported trip to Russia in his previous capacity as Minister of State Security.

Minister Mahlobo confirmed he had met President Vladimir Putin but refused to answer who had accompanied him on the trip. Most of the Minister’s unanswered questions surrounded the issue of whether government had committed itself in any way financially to a plan devoted to adding nuclear power input to the national grid with Rosatom. Prevarication The meeting became extremely unpleasant when new DA shadow energy minister Gavin Davies asked the Minister if he had travelled on any trip to Moscow with Messrs. Gayton McKenzie, Kenny Kunene and two CEF officials; whether he met with Russian gas giant Rosgeo about any deal; and was the trip was in fact a “cover up” for a suspected R5bn gas exploration deal for Block 9 and II located in South African waters in the Mozambique Channel. He was asked to say “yes” or “no” in each case.

Minister Mahlobo claimed the question was out of order in terms of the NA’s rule 82 and the use of the words “cover up” was insulting. The Minister called on Chair Fikile Majola angrily demanding

that Davies withdraw the question, Davies complaining that in the National Assembly debating rules did not apply to parliamentary working committee procedures.

The Minister said he had been to Moscow, liked going to Moscow, liked Russians but was not going to have “State Security matters called cover ups”, he said. He added that he was not Minister of Energy when he went but in charge of State Security. One got the taste of a man who is not used to having his actions queried. Not here, mister Fikile Majola responded and reminded the Minister that he, Majola, was the chair of the meeting and Minister could not interrupt proceedings as he had just done and claim house protection in a committee but it was respected he was bound by state security codes.

Tactfully, Majola asked Gavin Davies to withdraw the question as it had nothing to do with the meeting agenda before them. Davies, probably realizing that he was not going to get an answer on his line of questioning and was reducing his question time allocated, withdrew the question.

The Minister’s two-hour briefing contained very little other than there was a strong coupling of nuclear energy with renewables and an emphasis laid on the fact that nuclear was “clean” energy. Matters covered the legislative framework of energy matters; global and local energy demand analysis; and what DOE saw as the future energy strategic trajectory. IPP too early On many of the relevant outstanding issues, such as IPP renewables contracts and issues surrounding electricity, Minister Mahlobo said he had not yet had time in his new post “to apply his mind”. On matters surround the energy mix, Minister Mahlobo laid much emphasis of the need for public participation in the form of the forthcoming proposed Africa Energy Conference.

He said the IEP, the overarching plan for energy which would not change for a period of twenty years or so, was to be “put to Cabinet shortly”. He said the IRP, however, was henceforth to be reviewed annually and such a process would be instituted. The revised plan was shortly to go to Cabinet not in March 2018, as planned. Enough is enough Gordon Mackay, previous shadow minister of energy (and in his last meeting) responded that three successive ministers of energy had continually repeated such a mantra on the IEP over the years but that no IRP or IEP had ever appeared to give direction and clarity to industry players.

Now, he said, the Minister was rushing through the IEP and IRP in a week to Cabinet when Parliament would be closed despite the previous minister of energy promising it by March 2018. Mackay asked if the rush was to get the nuclear issue tabled at the ANC Elective Conference in December. Minister Mahlobo denied this, stating he was merely starting to get things moving along. Such issues had to be treated as urgent, he said. Public comment not the issue Mackay said that he hoped the Minister would not consider the forthcoming energy conference, recently announced by DOE as a substitute for a call by Parliament for comment in attempt to gain comment on nuclear energy in the future to an invited audience. All the public wanted was the truth on who has signed what with Russian groupings and what was the expected cost.

Mackay said it had been a court decision not to proceed with nuclear power. It was therefore beyond the law to still be debating at cabinet level or with DOE or any entity whether the taxpayer should pay for nuclear in the energy mix. The Minister was not respecting the law, he said. Different view Minister Mahlobo disagreed and said the court had not ruled as such but had rather stated that the process of introducing nuclear energy had not been consultative enough. Consultation seemed to be the problem, he said, and DOE was in the process of solving that issue. More consultation would take place, he remarked.

In any case, the Minister said, he was to go back to the courts to fight the issue of the right to decide on resource planning and it would be based on a view of what the country could afford. Money, money, money As far as these costs were concerned, the Minister said Cabinet would be approaching Treasury and such issues would be only discussed when matters got beyond basic planning in the new presidential fiscal planning committee as to what resources were to be deployed.

To emphasise this, he said the question of the refurbishment of refineries would also be discussed in the passage of time, as would decisions on PetroSA and CEF. This was all work in hand and he pointed out that there was a distinct difference between government planning and government proposing.

Gordon Davies (DA) said this merely echoed similar “U-turn” comments a few days earlier by the Minister of Finance, Malusi Gigaba, when discussing Treasury approvals and the budget process. Russia with love Returning to the nuclear issue, the Minister admitted again to having met many Russian officials over time and there was nothing wrong with that. He repeated that he liked Russians and they were the only real friends supporting the ANC during the fight against apartheid. He said he had been trained in intelligence there years before and he knew many of them well from the “old days”.

Nowadays, any discussions with the Russians were no different than discussions with any other BRICS member, he said. The Minister added that he did not use the expression “Nuclear New Build” programme anymore, but as was the case with all Cabinet members, they referred to matters as “Nuclear Expansion”. We are a nuclear nation “This is because, South Africa already has energy from nuclear energy in the form of Koeberg and it is now only a decision on the nuclear path we intend to follow. We will apply our minds in due course to a plan”, he said. He also qualified Cabinet’s past approach to nuclear energy by stating that Cabinet decided to look at nuclear energy as part of the energy mix two years ago.

“We are still looking at it and there is nothing untoward in this debate”, he said. “The history of this whole consideration is well documented”.

Gordon Mackay said this could not be the case, as Minister of Trade and Industry, Rob Davies, had just vilified the application of nuclear energy within the energy mix and did not refer to the issue as nuclear expansion.

We can fix Eskom When asked about the problems at Eskom and how it would be possible for that SOE to deliver on a nuclear plan, the Minister responded that the real issue now before everybody was to get Eskom working properly again, rather than delve into past issues with finger-pointing.

Eskom, the Minister said, was an essential ingredient in the energy plan of the future. Eskom will be there on nuclear at least because of Koeberg as Pelindaba would continue with nuclear medical exports. He said the whole issue really surrounded a new emphasis on oil and gas applications. Fuels On that issue the Minister said, “We must rather refine the oil we import”, he said “rather than have an energy economy based on increased importation of fuel in refined form. To meet this need and in conjunction with others, South Africa must build another refinery with the ability to enter the regional market, maybe also possibly re- furbish the old”, he said.

But, he said, no government liked spending enormous sums on old assets they do not own. He said DOE was “thinking this through at the moment.” Applying his mind “Also, we have to make a decision on specifications for new fuels and we are aware that we must enter a plan as to upgrade our existing refining capability. This a discussion must be made sooner rather than later, and I will do this’’, he said.

In answer to further questions on the energy mix, he said, “Renewables are also going to happen. The discussion is only about the pace and the price. The IPP plan is very much part of our projections” he noted and said he would will apply his mind to this also very shortly.

He again confirmed that on IPP renewables, “We will make our final decisions known very shortly indeed but we are not going to have a gun put to our heads on how the mix is apportioned and it will definitely be based on what we can afford as a country.”

“Meanwhile”, he said, “Natural gas is growing at a fast pace as a contributor whilst energy from coal is slowing down and will do so more as a contributor to carbon emissions.”

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More powers planned for Competition Commission in new Bill

inister of Economic Development, Ebrahim Patel, has finally published his Competition M Amendment Bill which will essentially allow the Competition Commission to inquire into generalised economic market competition factors, transformation and concentration, as distinct from its current limited powers of investigating only individual company activity.

Accordingly, the Bill includes several amendments to enable the Competition Commission to focus upon market structures and what it may consider as a racially-skewed ownership spread. The new Bill provides for direct appeal from the Competition Tribunal to the Constitutional Court on decisions made and referrals to High Courts. Already out The amending draft Bill, has a 60-day period of public comment and consultation, the Minister stating that he hopes to get the Bill to Parliament after his department has considered comment in the first half of 2018.

Importantly, the Minister proposes in the Bill that the Competition Commission(CC) moves beyond just making recommendations to having its findings binding, unless challenged. In stating his well-known adverse opinion on “the highly concentrated nature of South African markets”, he said he wished to “widen the mandate and deepens the powers of the Competition Commission to become a market inquiry instrument to investigate the general state of any specific market.” Limited span of time Any inquiries by the CC will be completed within 18 months the Bill states, which the Minister says will help with predictability “in the engagement process”. The Bill now clearly outlines a procedure to follow during an inquiry. Said a spokesperson for the Commission, “All we have done is ensure that inquiry now explicitly considers transformation and concentration questions as well.”

It might be three months before a final version of the amending Bill reaches Parliament.

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Labour Committee  Labour Laws Bill on paternity leave goes through  MPs get update on new Essential Services Committee  More Cosatu demands on labour broking to go to Nedlac  DOL introduces three new Labour Bills in tandem

he Labour Laws Amendment Bill seeking to amend the Basic Conditions of Employment Act so T as to provide for parental, adoption and commissioning parental leave to employees, has been adopted by the National Assembly.

Tabled at the end of 2015 and after considerable re-wording, the Bill provides that an employee who is a parent and who is not entitled to maternity leave will be entitled to 10 consecutive days' parental leave when that employee's child is born or when an adoption order is granted. The anchor Act will now be amended to include paternity leave for fathers.

Adopted children The amendments also provide that an employee who is an adoptive parent of a child less than two years old is entitled to adoption leave of two months and two weeks consecutively and if there are two adoptive parents, one is entitled to adoption leave and the other employee is entitled to parental leave of 10 days.

The same provision is made for commissioning parents in a surrogate motherhood agreement.

The Bill, approved without dissention, provides that a collective agreement may not reduce an employee’s entitlement to parental, adoption or commissioning parental leave and will also amend the Unemployment Insurance Act to reflect the right to claim leave and parental benefits from the Unemployment Insurance Fund.

As a private member’s bill, it was originally drawn up by the parliamentarian Cheryllyn Dudley (ACDP), her party holding the view that the parental leave provision would facilitate early bonding between fathers and their children resulting in stronger families. The matter obviously affects business employment and the arrangements on the Unemployment Insurance Fund (UIF). Consensus An important process during the passage of the Bill was conducted recently in the form of public submissions called for by the Department of Labour (DOL), most if not all agreeing with the general principles behind the move but happy with the framing of it under a Bill promoted by the Minister of Labour.

After the hearings and last month, Marsha Bronkhorst, Chief Operating Officer, DOL, presented a summation of the submissions that were received by DOL in respect of public comment. Members of the Portfolio Committee on Labour were told also that Cosatu supported the Bill, a submission having been made by Mathew Parks, Cosatu’s parliamentary coordinator. All together Ms Bronkhorst said Cosatu wanted Parliament to pass the Bill as a matter of urgency as many further changes under Unemployment Insurance Act were still not implemented. At the same time these UIF procedures could be added to the proposals also under Labour Laws Amendment Bill.

Cosatu had said in the light of the economic downturn and the possibility of more shedding of jobs, urgency was more important, and they hoped the newly amended Act could be in force by April 2018.

Marsha Bronkhorst also reported on further submission by the Commission for Gender Equality (CGE) who had suggested a few changes of a minor nature on technical issues and these had been considered by DOL, re-written in better legal language and subsequently adopted by Parliament. SA Essential Services She then took the opportunity to update Parliament on the work of the Essential Services Committee (ESC). She told MPs that the primary mandate of the ESC was to designate essential services which, if compromised or interrupted, would endanger the lives and security as well as safety of the population. Nominated parties described as essential services could not go on strike for such reason.

The ESC is also mandated to monitor and build a knowledge base of Minimum Services Agreements (MSA); Minimum Service Determinations (MSD’s) (including maintenance services) in chosen sectors; to appoint various panels determine the minimum services to be maintained in essential services; determine disputes on whether services were essential and determine whether a service was a maintenance service. Wide ranging She explained that in line with ESC operations, in 2016 a Memorandum of Understanding with CCMA was signed to provide administrative and professional support so that the ESC can work with all elements of government such as legal services; finance; supply chain; strategy; human resources and information and with municipalities, hospital services and even old age homes.

Already discussions have been held and agreements made with Department of Social Development, South African Local Government Association, South African Municipal Workers Union, the National Transport Movement, the Department of Health, the Independent Municipal and Allied Trade Union and the South African Medical Association. Defined occupations On the completion of first year since inception, the ESC has had a 100% achievement in its operational plan, Ms Bronkhorst explained. She said that, for example, it was not the DOH itself that was essential but certain services within the DOH structure. Similarly, education services were not seen as essential and even if educational services were compromised, any event would not endanger the lives of the population.

The main challenge for the ESC so far has been that a good number of services did not conform to the test as originally set down for being designated as an essential service but, she said, a learning curve soon taught them to constantly re-think issues. Also, essential literature giving background on services was often missing and as were accurate descriptions of sector work, all of which led to gaps in knowledge which had caused the ESC in many instances to rely on jurisprudence from other countries. Some in, some out There were obviously several limitations, said Ms Bronkhorst, where the ESC could not consider sectors that fell outside their parent body and sectors which had no representation at CCMA level, for example domestic workers. The Chair, Fezeka Loliwe, asked DOL to supply a list of essential services so far designated urgently to the Committee.

Ms Bronkhorst said that on the overall relationship between government and the ESC, most contact was between Public Service Administration department and ESC. As not all the services in the public service could be considered “essential” by any means, there was a need to for the ESC Committee to decide on who these were.

In the coming year the ESC would be moving into the area of municipality structures and local government, Ms Bronkhorst said. Labour broking A major issue now is a memorandum from Cosatu addressed to the Speaker of the House and passed to the PC on Labour requesting an end to labour broking of any kind in the immediate future. The letter also dealt with issues surrounding state capture and political appointments.

Chair Loliwe told members that they could only debate issues relevant surrounding labour broking and that the Deputy Speaker had specifically requested that the Committee refrain from commenting on the balance of items in the memorandum, namely matters relating to state capture, political appointments and corruption.

The Chair called for the current position with DOL and their policy towards labour broking.

Ms Bronkhorst responded that labour broking was regulated in a strict manner and eventually workers would become permanent, according to the regulations, should they stay over a stipulated time with one employer over a regulated period. Neither the state or DOL could dictate to companies on how they should structure their operations, Ms Bronkhorst said.

All outsourcing On the total banning of outsourcing as suggested by Cosatu, Ms Bronkhorst said it was not the role of the government to decide or dictate for entities on how they should structure their operations or services. Its role was that workers should be protected against any unfair labour practice or abuse.

Chair Loliwe asked that the matter be referred to NEDLAC with Ms Bronkhorst of DOL stating that she would be prefer this. In a division of opinion, the Committee agreed that the whole question of labour broking be once again referred to NEDLAC for a “short review” on the matter, the DA objecting that it went to NEDLAC at all. New Labour Bills As a separate item the National Minimum Wage Bill, the Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill have also been tabled in Parliament.

National Minimum Wage Bill, proposes the negotiated national minimum wage; and provides for the composition and functions of the National Minimum Wage Commission which will handle an annual review. The Bill provides for exemptions from not paying the national minimum wage; provides for the review and annual adjustment of the national minimum wage and for transitional arrangements in respect of farm workers and domestic workers

The Basic Conditions of Employment Amendment Bill changes certain definitions; provides for daily wage payments to a nominated list; updates the ability of labour inspectors to monitor and enforce all three amending Bills now tabled; deals with regulations regarding sectoral determinations aiming at strengthening collective bargaining; and provides for claims for underpayment of UIF.

The Labour Relations Amendment Bill sets down the criteria to extend a collective agreement; deals with matters regarding funding agreements; sets down new additional regulations regarding picketing by collective agreement; or by determination by the commission in terms of picketing regulations; details changes on ratified or determined minimum service; extends the meaning of ballot to include any votes recorded in secret; the independence of Registrars; and the appointment of an arbitration panel and awards.

As a Section 76 Bill, briefings are being conducted separately as an initiative by DOL in all centres. In Polokwane, for example, stakeholders were told that the changes “will see the introduction of the code of good practice on collective bargaining, as well as industrial action and picketing.”

The briefings incorporate the new National Minimum Wage Act provisions and the Basic Conditions of Employment Act. As far as the Labour Relations Amendment Act changes were concerned, it was said, “These are designed to strengthen collective bargaining, enhance labour market stability and promote proactive and speedy dispute resolution.”

Strikes and picketing These amendments, parliamentarians were also told, had particularly in mind the need to address violent and protracted strikes. Picketing will be prohibited, it was said, unless there are picketing rules in place and that a commissioner conciliating in a dispute “that may lead to a strike or lockout may determine rules if there is no conciliation agreement in place, referring to the default picketing rules in the code of good practice, after taking representations made by parties.”

It is only when collective bargaining cannot be agreed upon that those employees will be allowed to picket, they were told, this being the case in the new proposals to encourage peaceful collective bargaining and to exhaust internal processes before taking to the streets to avoid loss of life of employees and its consequent negative impact on the economy. Simple choice “No picketing rules, no strike” the spokesperson said, “and If workers continue to strike without picketing rules, the strike will not be protected, nor will it not be recognised by the CCMA.” They were also told that the amendments came from a process of engagement through NEDLAC and were approved by the Cabinet.

The briefings, in some cases also referred to by DOL as “hearings”, will resume on January 18, 2018 in Nelspruit, Mpumalanga and will end in February 16, in Kimberly, Northern Cape.

Submissions in writing were to be with DOL by 30 November but the notice for parliamentary hearings is yet to come. For details of the Bills as tabled by the Minister of Labour, go to: Proposed Amendment Bills — Department of Labour

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Gigaba’s Border Management Authority Bill limps on

nce again, in the five years since the Border Management Authority (BMA) was first announced O as a possibility by the Ministry of Home Affairs, the BMA Bill determining its structure has reached an impasse, this time in the National Council of Provinces. However, ANC MPs seem determined to close ranks and push on with what seems a determined attempt by the Cabinet to separate Treasury away from its SARS customs and duty revenue streams.

The BMA Bill was passed July/August 2017 to the NCOP Select Committee for Social Services for debate for procedural reasons, the Bill having been bulldozed through the National Assembly in June 2017 after two initial attempts. Now it must receive concurrence by the NCOP, usually a mere formality.

Not this time, however. Conglomerate By September, with now four ministerial changes in as many years affecting the Bill, a section of the Cabinet under President Jacob Zuma ploughs on in a determined fashion to implement a Home Affairs entity that has an almost impossible task of doing by itself what five state entities according

to many handles somewhat badly on immigration control, policing, customs, duty collection and border control management.

The Bill in its background section states, “Border management in South Africa is currently exercised by multiple organs of state with a purpose of securing the borders of the Republic and protecting the national interest. There is a need for integrated and co-ordinated border management that facilitates secure travel and legitimate trade, in accordance with the Constitution, international and domestic law.”

Over the top With the past Minister of Home Affairs, Prof. Hlengiwe Mkhize, present who requested that the Bill needed the urgent attention of MPS as the immigration problem was becoming unmanageable. However, once again the Bill has snagged on the equally unmanageable idea of creating such an entity as the BMA within Home Affairs running merged component of SAPS and SANDF border personnel for over for 4,000kms of border line, mainly on issues surrounding who controls the money and how.

South Africa has hundreds of land border post crossing points, dozens of seaports from fishing harbours to ship terminals and over 2,000 private and public airstrips and major airports. Trucking companies, fuel tankers, passenger buses, agricultural and refrigerated goods all pass through these points, plus thousands of transport passengers in groups, immigrants and tourists. Go it alone and tourist In addition to other problematic areas, the proposal is that the Department of Agriculture and SA Customs staff are “seconded” for border post duties at all points of entry. The administration and the collection of customs dues and tariffs duties will be the responsibility of the BMA, estimated at R3bn a year for SARS, outside of the SARS revenue electronic system “leaving it wide open for manipulation”, as one MP said.

With the changes in SARS, Treasury having initially rejected any association with the BMA, an agreement was with new Minister of Finance, Malusi Gigaba, for the BMA to “facilitate” SARS staff on customs collections Daily Maverick stated when the Bill was passed by the NA, “what was once just a stupid idea, is now an insane reality.” Business chambers have been highly suspicious in the light that there already being enormous backlogs and delays at ports and harbours. Just money Minister Mkhize responded that the department planned to introduce digital systems when the authority was established to solve challenges posed by fraudulent entrants to the country. Online applications and biometric systems would make immigration policies more effective, she said.

She also insisted that the Border Management Authority "is not about raising walls and gates but ensuring the government is seen to be in control of how people enter the country and why they are here", Mkhize added. Meanwhile, the ILO has cautioned the SA government on “leaning towards the securitisation of migration as opposed to prioritising human rights.” Territorial slog out The debate continues to rage between immigration issues, defence priorities, customs control and monies from duties to the fiscus and even state security. As always is the case with the current Cabinet, the issue of how much the exercise will cost is territory nobody wishes to enter.

Department of Home Affairs under Director General, Mkuseli Apleni, has once again had to detail the entire plan envisaged by the Bill to MPs, this time in the NCOP.

The concept was originally proposed by Malusi Gigaba when Minister of Home Affairs but bitterly objected to by the then Minster of Finance, Gordhan Pravin. All have been haunted by the idea of Home Affairs getting mixed up with customs revenues, porous borders and handling bonded warehouses. Fishy smell The sad tale of four cabinet reshuffles also accompanies the Bill but a common thread to the whole picture remains the connection of President Zuma, Minister Gigaba, Gupta passports, SARS and, of course money, if one is to read Jacque Pauw’s contentions, the gangster world associated with cigarette smuggling.

Vague mention of this was made in parliamentary meetings in early 2017 but we were as innocent as lambs and we listened to department official describing the cigarette phenomenon as merely a problem. GO to: Border Management Authority around the corner - ParlyReportSA

Officials and the NPA must have known a lot more. A number of those involved in the smuggling syndicates have turned state witness to avoid jail terms. In Pauw’s “The President’s Keepers” most MPs have learnt of some of the more unsavoury names involved and that this and associated cases still languish in the offices of the NPA.

Consolidation In addition, the issue of setting up a BMA has also been further politically complicated by the appointment of yet a further new Minister of Home Affairs, Ayanda Dlodlo, effective from 17 October 2017. Minister Dlodlo was a past personal advisor to President Jacob Zuma. She also served in the State Security Department and was Minister of Communications for some seven months before being made Minister of Home Affairs.

Parting shot To add a further twist, DG Apleni, who remains personally handling the Border Management Authority Bill, was suspended by Minister Mkhize in one of his last acts before President Jacob Zuma replaced Minister Blade Nzimande with him as Minister of Higher Education.

Very shortly afterwards DG Apleni claimed victory in the courts nullifying this suspension. The relationship between Home Affairs and its Ministry is therefore highly charged. Or is it? One never knows in this spooky area. Gigaba pops up again To add to the territorial fight of merging all the interests was the only the Minister of Police would entertain a Memorandum of Understanding with Home Affairs on the concept of a BMA. A tangled web, indeed.

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs had agreed that the wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), also used the wording that the BMA would “facilitate” the collection of customs revenue and fines by SARS staff present.

Foggy However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined in the clause stating that Home Affairs would facilitate the customs process for SARS.

All opposition parties ganged after the Bill was voted through at Committee level and the Bill went forward for approval in the National Assembly. The ANC party whips had to run around fast to haul in enough votes in the House to bumble the Bill through the NA and only just enough at that.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they could support the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk with a project which at the least sounded risky. Bill pushed through The DA never got these assurances and consequently voted against the Bill. Opposition MPs in the NCOP, where the Bill now sits, were more than aware of the issues involved. When it came to question time after DG Mkuseli Apleni’s briefing on the Bill, matters turned to the financial and he was asked the same question. Will SARS staff, paid by SARS, be on duty? they asked.

The DG’s reply was as woolly as the Bill is on all issues regarding inter- departmental co-operation. DG Apleni maintained that an operational plan could not be contained in a Bill, the Opposition maintaining that areas of responsibility can and that a line had to be drawn, some MPs suspecting that this income may be diverted to run the BMA scheme. Maak ‘n plan On organizational control, DG Apleni told the NCOP MPs, “It is expected that the BMA will shortly solve the issue of integration among various relevant departments.” He also said, “There are obviously no-go areas. For example, to handle immigration issues across the four departments, an inter-ministerial committee on migration, chaired by the Minister of Performance, Monitoring and Evaluation and Deputy Minister for Home Affairs has been established.”

Regarding questions on the funding of the BMA, DG Mkuseli Apleni once again fudged his reply to say that over a period of three to five years his department was considering an estimate of R10bn was to be used in funding the concept.

At this point, the chair of Select Committee said she would aside two days to “finalise the Bill”, presumably meaning a workshop-type parliamentary meeting to find a way to organise NCOP concurrence according to parliamentary rules before Easter 2018.

Previous articles on category subject Border Authority to get grip on immigration - ParlyReportSA

Arbitration Bill approved and now protects SA importers Bill aimed at adopting the internationally and widely-used “Model Law” as the basis for South A Africa ‘s international arbitration regime has now been approved at committee stage in both the National Assembly and the NCOP. It is now set to become law.

During parliamentary hearings earlier, the Bill was challenged by the Maritime Law Association (MLA) as having the unintended consequence of negating South Africa’s Carriage of Goods by Sea Act and therefore specifically hurting importers of goods in terms of existing law. 19

Importers worried Their objection to the new Bill, using the Model Law created by UNCITRAL in its role as the UN’s body on international law, is on the basis that it forces local importers to incur costly foreign litigation costs when claiming for insurance from foreign shipping lines. Current arbitration law enables SA importers to seek arbitration on loss claims in South African courts.

The Bill was tabled by the Minister of Justice and Constitutional Development and applies to all arbitrations of any kind.

In the case of importers of goods, Peter Dawson, a lawyer representing MLA, maintained it would be catastrophic to deny importers the protection of section 3 of the Carriage of Goods by Sea Act enabling importers to institute arbitration in country of origin because of its knock-on effect to consumers with the enormous costs of having such cases dealt with internationally. Air tickets MLA stated that under the proposed International Arbitration Bill, based on UNCITRAL’s Model Law, most arbitration cases would appear to take place in London in courts unused to South African trading and harbour conditions and specific import/export matters. South African courts were fully capable of handling their sector arbitration matters, have done so for years and there was legal precedent all at lower cost, MLA said.

Peter Edwards maintained that for traders the offending clause would create an interpretation that could reject the protection offered by section 3 of the Carriage of Goods Act and would give shipping lines a major advantage against South African importers in arbitration. He concluded that the dangers posed to South African importers and consumers by retaining this unintended consequence would outweigh any benefits brought about in the general area of arbitration. Point taken He promised that the MLA will apply its mind on whether and how to reframe its proposal for amendment to the clause in question. Such an amendment was subsequently accepted by the Committee and in an exclusion, that referred to Carriage of Goods by Sea Act, the Bill was subsequently approved by the NCOP and sent to the National Assembly for voting and approval.

In a briefing undertaken earlier by Prof. David Butler, State Law Advisor to DOJ, he told MPs that in general the International Arbitration Bill was the result of an investigation by the South African Law Reform Commission. It concluded that South Africa was damaging itself by not conforming to international convention by updating is present legislation on the basis suggested by UNCITRAL. International format The role of the UNCITRAL is to address the wide divergence of approaches taken in international arbitration throughout the world. The body promotes unification and harmonization of law and has provided a modern and easily adapted alternative to outdated national or localized regimes such as, said Prof. Butler, existed in South Africa.

The Bill therefore aimed to adopt UNCITRAL Model Law as the cornerstone of the international arbitration regime in South Africa following the example of most countries. The Model Law standard defines arbitration as “international” if the parties to an arbitration agreement have, at the time of the conclusion of the agreement, their places of business in different states.

Trade certainty The purpose of the Model Law is that by being common to all countries this provides certainty for foreign trade to know that the conditions for any arbitration procedures are common to one and all situations and that one “does not have to search outside the enacting legislation”, or in other words trade being subject to the laws of any country.

Opposition members queried with Prof. Butler whether local companies, in accepting judgements by foreign courts, also had to accept foreign arbitration awards.

He responded by advising them of the “public interest” clause in the Bill which was an internationally accepted means of allowing local national courts to give good reason in the “public interest” why the awards could be re-considered locally and public policy in that country considered. Local awards possible As far as the appointment of arbitrators was concerned, Prof. Butler said one of the main advantages of international arbitration was that contesting parties could appoint their own arbitrators. In a major international arbitration there would typically be a tribunal of three arbitrators and both parties to the case could appoint nationals as their own arbitrator who would understand their own cultures.

The MLA subsequently came back with their suggestions. A last-minute public interest clause in the case of SA importers and the fact that arbitration in their case can be legally attended in SA, has been inserted.

The Bill was passed unanimously.

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Mahlobo talks on fuel reserves and petroleum issues

ew Minister of Energy, David Mahlobo, has told Parliament that his objective is now to N minimise losses to the taxpayer as a result of the highly contentious sale of 10 million barrels of oil reserves held by the Strategic Fuel Fund (SFF) at Saldanha Bay and at tanks in Milnerton. The Minister said the oil was still on site and had not yet been lifted by the new owners.

The meeting in Parliament was part of a two-day report back by Minister David Mahlobo on Energy Strategic Issues presented by him to the Portfolio Committee on Energy but the presentation was clearly the work of the Department of Energy (DOE) in the compilation.

No matters of funding, anticipated costs, and Treasury relationships on the issues debated were referred to, the briefing claiming to be on only “strategy”.

On the second day, issues at Central Energy Fund (CEF), of whom SFF is a wholly owned subsidiary, and matters surrounding PetroSA, were discussed and the future of refining oil. On both days the “nitty gritty” on fuel energy issues came out in the questioning periods but the Minister appeared to dominate the meetings, both as spokesperson for DOE and in matters related to energy planning, giving out very little in the way of hard-fact decision making.

Energy focus ahead It emerged that the new focus of DOE will be aimed at an energy mix that has a focus on oil and gas issues; that importation of refined products is contrary to their hopes and wishes and will have to be countenanced but the importation of LNG will be considered in the light of the focus on gas; that the Central Energy Fund will play a major role in the Minister’s plan for an increased role in state oil refinery activity and that a more open approach to nuclear energy is in the offing with Russia.

He brushed on the possibilities of “major LNG deals with any particular nation” as being far too early to debate hard core details but said it was on the table to start looking seriously at issues surrounding terminal possibilities, once again referring to “strategic partners and possibilities”. Core player He did say, however, that there was a particularly strong emphasis on the role he saw being played in general “by a re-directed Central Energy Fund” which he said was to have “an end to end review of core functions to identify and scope opportunities of operational improvement and synergy optimization”, whatever that might mean but presumable meaning energy focus, “and define opportunities for cost and revenue operations” which seemed to mean making a profit.

The Minister, still referring to CEF, said there was to a need to study “its people problems” coupled with “an inside and outside look at complementary businesses that may reside outside of CEF” referring to “possible integration and acquisition”.

What was noticeable in the Minister’s comments was the lack of discourse on electricity matters. It was if the DEO had completely surrendered the issues relating electricity issues and that portion of the energy mix, recently rumoured as higher that thought, to Eskom. A mucky deal In questioning, opposition members seemed first to require answers from the Minister on the fate of South Africa strategic oil reserves.

Gordon Mackay (DA), who announced his departure from Parliament as an MP, previously reported that the SFF sale was conducted when Brent crude was at an all-time low of US$28 a barrel to a consortium comprising Swiss oil trading giant Vitol and the Taleveras oil storage group, who are known to be building Africa’s largest oil storage facility based at Bioko Island, Equatorial Guinea.

The sale was agreed at approximately R300m, a ridiculous figure stated in earlier meetings for reasons not made clear. Shady company The Taleveras Group, registered in Nigeria, is controlled by one of Nigeria’s youngest billionaires, Igho Sanomi. Taleveras is also known to some of the senior executives of the ANC, also the Swiss giant oil trading company Vitol is known to deal with Thebe Investment Corporation in which the ANC has a controlling 47% stake.

Glencore, the company who agreed to sell their Optimum mine to Tegeta Exploration and Resources, owned by Duduzane Zuma and the Gupta Family is also involved in money transfers with Taleveras. The cops arrive In a case brought by the US Ministry of Justice for money laundering, fraud and illegal trading logged by Dept. of Justice as Case 4:17-cv-02166 Document 1 Filed in TXSD on 07/14/17 and brought by 22

Elizabeth Crispino of the FBI who signing her affidavit of truth on the same date regarding the lifting of oil, money laundering and racketeering, makes interesting reading.

According to the documents filed by the FBI to seize assets, it reflects in detail the transfers of amounts running into millions of US dollars, sometimes in millions of British pounds, by the Taleveras group and its associates, naming not only the banks and shell companies moving the money between countries but names Glencore as well for the same kind of processes in the same document of 54 pages. Lagos scandals According to the FBI, from 2011 to 2015, Nigerian businessmen Kolawole Akanni Aluko and Olajide Omokore conspired with others to pay bribes to Nigeria’s former Minister for Petroleum Resources, Diezani Alison-Madueke, who oversaw Nigeria’s state-owned oil company, all of which involved a massive scandal a short while ago involving some US$90bn in oil sold out.

In return for improper benefits, Alison-Madueke, used her influence to steer lucrative oil contracts to companies owned by Aluko and Omokore under the general title of Atlantic Drilling. The FBI caught up with them. Nabbed The Nigerian courts ordered the minister to repay US$153.3m and seized most of her lavish properties in London and elsewhere. Meanwhile the US has seized, thanks to its FBI investigators, over-the-top properties in the USA as well as London, together with yachts and vehicles owned by Aluko and Omokore.

Almost immediately, Igho Sanomi of Taleveras issued a statement stating everybody was connecting the dots incorrectly and although being named by the FBI in all the money transfers by his company as well as Glencore, he says his company has nothing to do with Atlantic Drilling. He says always it is the seller who has no control in whatever the buyer does with the goods.

Whatever the true story, South Africa seems to know some dangerous people. Back at the ranch As far as the sale of the SA oil reserves is concerned, all three ministers have been coy to name the parties involved in the sale but its seems an open secret what has happened and who the bought the oil, if only on paper. Taleveras and their friends. Nobody will say either if the has been on-sold but one guesses the FBI must be sniffing around.

The current Minister states that the oil has not been lifted and DG Maqubela said four months ago in Parliament, “Not yet”.

A review was conducted at the instigation of previous Minister Tina Joemat-Pettersson through independent investigators but along the lines of an audit which had no investigative powers but only the ability to track money movements.

Again, the reason for this has never been made clear to Parliament despite continued questioning by MPs, Mackay said.

Deep pools During this period Minister Tina Joemat-Pettersson claimed untruthfully to the Energy PC Committee in answer to questions from Mackay that the sale had been conducted for reasons of “stock rotation”, a factor of management that is called for under the Energy Act if oil stocks become unusable. This was inexplicable if experienced oil traders had bought it.

Whether she was fed the lie had not been discovered by Parliament, but the Minister issued a subsequent statement to the effect that it was “a question of interpretation”.

After the review had been completed, the same Minister announced in June 2016 that “as a result of an investigation she had accepted the resignation of the SFF Chairman, Riaz Jowoodien, and the acting CEO Sibusiso Gamede.” It was subsequently announced in September 2016, that CEF chairman, Xolani Mkhwanazi, had also been relieved of his post by the Minister. Maybe connected In the months that followed long serving DG Ompi Aphane and CFO Chetty were relieved of the posts in DOE. Again, no reasons for the suspensions have been given, other to claim the any information that might be tendered was sub-judice. At this point acting DG Maqubela was looking downwards for a long period and other DOE officials appeared to be taking notes.

Gordon Mackay said that throughout this whole long period, no police charges have been brought, no Hawks investigations started and time and time again, as shadow minister of energy, he has raised the fact that a start to the journey to the offices of the NPA had not even commenced. “Where such a large amount of money is involved would the Minister please advise what his intentions are?”, he was asked. History repeating Minister Mahlobo, reconfirmed to MPs that a further forensic report into the affair was conducted into the sale by an investigative contractor with a view to establishing how the unauthorised sale came about.

This still cannot be made public for the reason, Minister Mahlobo said, because CEF is locked in a court battle with the new owners of the oil stocks, CEF requesting that the sale contract be declared illegal. Chair Majola reminded the Minister that the Committee was tired of getting this approach to answers on dozens of issues on DEO queries. Surface questioning Minister Mahlobo said, he could help but to give this answer. The contractor’s report was erroneously not “evidence based”, he said, since the contractors were not given a mandate to speak to staff but merely collated accounting data and finally gave an empirical view of their own.

The facts surrounding who conducted the sale on whose authority therefore would not stand up in court and names could not be given at this stage for fear of redress and as advised by legal experts, Mahlobo said to MPs.

He confirmed that that CEF still had the R300m “in their account” and said, “matters were becoming extremely messy”. He asked the Committee’s indulgence. Minister Mahlobo then told committee members of the Committee that the only outcome he could predict was that CEF would be facing a massive loss of some sort since all that CEF could hope for was a compromise. Negotiations with the buyers remained in progress.

Replacement worries When asked by Gavin Davies (DA) whether the new stocks required by law to be on site might have to be re-purchased, with Brent crude now over US$60, Minister Mahlobo confirmed that DOE realised that in terms of the Energy Act, a minimum reserve had to be held for national security reasons and this would be the major portion of the loss envisaged.

However, the quantity that had to be purchased was unknown at present until either, hopefully, the money was “returned” which was unlikely, he said, or new stock purchased according to final negotiations completed and judgements in the court battle a known outcome. On the back foot Whether the stock would be lifted soon was therefore also not known but this could happen at any time at the owner’s prerogative, Mahlobo said. At this point, DoE would be in default of the Energy Act in terms of oil stock held in reserve. Whatever happened, the Minister repeated once again under more questioning, the department was going to be facing a massive loss.

Gavin Davies wanted to know why, based on evidence clearly to hand, the Hawks had not been asked to pursue a criminal investigation. The Minister said when the internal investigation procedures had been completed this would probably happen, but this could only be assured when several factors emerged from the court proceedings as to details of the sale and whether those involved had broken the State’s code of conduct. CEF overhaul The other main issue before the committee was the whole question of re-structuring the Central Energy Fund, replacing its board and dealing with the fact that much of its management is “acting”. The minister said he had not had time to apply his mind to new appointments either. At that point, he said, he had only been in the job just slightly over a week.

The chair, Fikile Majola, commented that the Committee had been waiting for four years for this to happen and the apparent lack of direction at CEF. He asked for a date when CEF would be reorganised. “Something has to happen, Minister, to bring this matter of a company accumulating losses, to conclusion. We must breathe some life into this issue. Does this company have a future?”, he asked. African Exploration Minister Mahlobo said the board of CEF would be changed before 2017 ended and that a lot was about to happen. Chair Majola also requested that the Minister should hear Parliament’s recommendation that African Exploration, another subsidiary of CEF, should be sold off. Minister Mahlobo was non-committal on the subject.

African Exploration and Mining was re-launched as a going concern in 2014, the then Minister of Mineral Resources, Adv. Ngoako Ramatlhodi making it quite clear in his speech that the coal mining unit at Vlakfontein, established in 2011, near Ogies, Mpumalanga was to become the basis of a state energy unit probably developing into “upstream energy exploration”.

Minister Ramatlhodi was fired by President Jacob Zuma after his failure to sign in favour of the Gupta Optimum coal mine takeover, Minister Ramatlhodi being replaced by current Minister Zwane. The committees request to close operations was made during the tenure of Minister Joemat- Pettersson.

Refinery talk The DOE report on oil and gas, presented by the Minister, was notable for the fact that DOE acknowledges that oil would remain a dominant factor in South Africa’s economy in the light of its reliance for oil for transportation and chemicals. He said the Department was calling for a decision on a new refinery in SA before the end of 2017, as is required by the NDP but which has been delayed.

He commented that there had to be a decision sought shortly and new strategic partnerships also sought. DOE entities had to participate in downstream activities, thereby “accessing the wholesale profit margins of the liquid fuels industry”, he said.

Minister Mahlobo said the same principle principles of strategic partnerships were to be used to drive gas programmes and that DOE was busy acquiring the necessary skills and industry programmes. He said, “Now is the time for the Central Energy Fund to play a role in the development of the South African energy mix.” Clean fuels “Given the interest in our offshore maritime acreage, we believe South Africa will soon be producers”, he said. The Minister surveyed “the geopolitical clout” of having oil and gas reserves in their maritime space and possible shale gas reserves. He called for “adequate investment” in energy infrastructure as was called for in the NDP, to eliminate poverty and create jobs. “Providing services that are competitively priced, reliable and efficient is the way to go.”

On liquid fuels, the Minister said, that South Africa had six refineries, four of which were crude oil refineries, but still the country’s imports of oil were increasing. In addition to this cost issue, SA must move from Clean Fuels 1 to Clean Fuels 2 fuel specifications, he noted, but it would require massive investment to convert refineries.

“Refinery owners want government to fund the upgrade, but government is reluctant to undertake this as this is tantamount to investing in assets they do not own”, he said. Another plan “Building a new refinery to handle 400 000 barrels per day would cost some R10bn” using senior debt and equity”, Minister Mahlobo said. “We now need to compare the overall costs between importing and building. “As some refinery owners wished to quit, and others wished to import all fuel and use the refineries for storage, South Africa had reached a tipping point on where to go with oil and gas”, he said.

PetroSA was currently an insignificant player in the integrated oil company listing, he noted, but there is now an option facing SA in that with a partnership with “BRICS national oil companies” to build a refinery with access downstream to the market to supply domestic and regional needs, as pronounced in the IEP, things could change particularly within the CEF group as I have advised”. State excluded “At the same time”, he said, “there needs to be a decision made on the single buoy mooring (SBM) pumping imported oil from vessels to Durban terminal. Whilst this operates on an open system and is owned by Engen, Shall, BP, Sasol and Total, we have no say in its operations, particularly in an instance where a decision is in the public interest.” He did not elaborate specifically on what he meant.

He concluded by saying that in the next four months, “all state energy entities will be going through a detailed strategy review that will cover the entire energy value chain. This will contribute towards the energy developmental objectives of the NDP”, he concluded.

Previous articles on category subject Gas undoubtedly on energy back burner - ParlyReportSA Fracking, shale gas gets nearer - ParlyReportSA Overall energy strategy still not there - ParlyReportSA Strategic fuel stock supply has problems - ParlyReportSA PetroSA has high hopes with the Chinese - ParlyReportSA IRP energy plan calls for less capacity - ParlyReportSA Marine Spatial Bill targets ocean resources... - ParlyReportSA

Comment period on Electronic Communications Bill extended

t would appear that Minister of Telecommunications and Postal Services, Siyabonga Cwele, has I been convinced by industry players that the deadline for public comment on the highly contentious Electronic Communications Amendment Bill was insufficient. A last-minute notice has appeared Dec 2 giving all until end-January to present their submissions.

The Electronic Communications Amendment Bill gives effect to the White Paper on National Integrated ICT Policy all aimed at “reducing broadband costs by introducing a national Wholesale Open Access Network (WOAN)” with both private sector and state participation. Under slightly different circumstances, only Mexico has tried this somewhat socialist principle and the jury is still out on whether that project has worked, said one unenthusiastic broadband media contributor.

Getting nasty The move has caused a bitter row to develop between state owned Telkom and private sector MTN, with MTN calling upon the Advertising Standards Authority to order Telkom to withdrawn recently flighted advertisements labelling MTN as “a bunch of bozos” in a price war that is already commencing.

The row generally has been going on for a long time, leading stakeholders such as MTN and Vodacom beginning to believe, after parliamentary hearings on a draft Bill were significantly altered, that the Department of Telecommunications and Postal Services (DTPS) might be relenting in the efforts to drive through the principle of open access to spectrum.

Now you see it, now you don’t Once must bear in mind that that government already has sold off the major portion of the spectrum already once to major private sector players and to put it all back in the pot in order to consider new players and ask the regulator, the Independent Communications Authority of South Africa (ICASA) to re-issue its licences, seemed a pretty rare non-option to those who had invested.

The intent of the Electronic Communications Bill appears on the face of it quite noble: • Promote the effective and efficient management of spectrum

• Reduce bureaucracy and streamline processes for spectrum assignment • Support the attainment of the national broadband targets set out in the South Africa Connect programme at speeds and in the time frame outlined • Provide clarity on the treatment of spectrum in instances where demand exceeds supply • Set aside spectrum for use on an open access basis with joint private sector investment • Support the provision of, emergency services, safety and security and sector-specific operations

In what has been a national debate, dominated to a great extent by Minister Cwele’s view that there is a waiting list of investors waiting to enjoy the fruits of the communications industry in South Africa, the industry has responded with the comment that with the kind of uncertainty promoted by the new Bill, they doubt this.

The industry, made up such players as Vodacom, MTN, Cell C and Neotel, have sunk enormous sums of money into developing communications structures all based upon what is now an unfortunate limited spectrum resource availability. So has Telkom, Parliament has already heard, but could do with more spectrum.

Not digging for coal One player recently stated in September 2017 after hearings on the Bill, “It seems that the Minister is seized with the need to transform the sector to ensure meaningful Black participation, which is fair enough, but spectrum allocation cannot be granted in the same way as the granting of concessionary mining licences if black empowerment is to be the goal.”

The background to the impasse is that the Electronic Communications Act empowers the Minister to issue policy directives but ICASA does not necessarily have to accept such. Governing body, ICASA preferred an allocation more on an “auction” basis, whereby bidders not only name their price but then add their additional contributions to Black upliftment and general social development.

To get it right with ICASA, who like the idea of revenue to government as well, took a lot of Minister Cwele’s time to get things right for him. But both had agreed that the principle of a WOAN was the right way forward. Industry has until now believed it was to comment on a much watered down version which offered compromise.

Money not the issue DTPS also disagreed with ICASA’s view by saying that the allocation of spectrum was not all about money but so that new players could enter the market. “The BEE structures in the majors holding the spectrum at present are “shallow”, they said.

They said to go on, as things were, was not in line with government policy which was to have sufficient spectrum available for new investors to join in the pickings. The more players in the market was the better way to bring bundle prices down, they maintained and still do as a main platform for political service delivery.

More time The draft Bill as produced in November came as a surprise to existing players, having suspected the very short period of 30 days to produce and lodge a thoughtful submission over the business and government busy shutdown period before the long holiday period was part of the general ruse to

fast track the Bill. DTPS answered that the passage of the Bill in Parliament had dragged on for far too long in any case.

It seems the Minister has relented on the issue but on that issue alone, however. The deadline for submissions in has been extended by an equally suddenly published government gazette to 31 January 2018.

LEGISLATION CURRENTLY TABLED IN PARLIAMENT As of the closure of Parliament, December 2017, excluding draft Bills still with government departments for comment, the following Bills are carried over until the first session of 2018

B28-2017 TAX ADMINISTRATION LAWS AMENDMENT BILL Minister of Finance Bill to be introduced. Briefing and debate 2018

B27-2017 TAXATION LAWS AMENDMENT BILL Minister of Finance Money Bill In progress

B26-2017 RATES AND MONETARY AMOUNTS & AMNDT OF REVENUE LAWS BILL Minister of Finance Money Bill In progress

B25-2017 ADJUSTMENTS APPROPRIATION BILL Minister of Finance Money Bill. In process

B24-2017 DIVISION OF REVENUE AMENDMENT BILL Minister of Finance Money Bill. In process

B23-2017 NATIONAL RESEARCH FOUNDATION AMENDMENT BILL Minister of Science and Technology Parliament briefed on Bill

B22-2017 CRITICAL INFRASTRUCTURE PROTECTION BILL Minister of Police Comments now closed. Programme awaited

B21-2017 AGRICULTURAL PRODUCT STANDARDS AMENDMENT BILL Minister of Agriculture, Forestry and Fisheries Tabled. Yet to be scheduled

B20-2017 SANRAL & NATIONAL ROADS AMENDMENT BILL Private Members Bill Tabled. Yet to be scheduled

B-19 RESTITUTION OF LAND RIGHTS AMENDMENT BILL Private Members Bill Tabled. Yet to be scheduled 29

B18-2017 DEFENCE AMENDMENT BILL Minister of Defence Tabled. Yet to be scheduled

B17-2017 ROAD ACCIDENT BENEFIT SCHEME BILL Minister of Transport Comments closed

B16-2017 NATIONAL PUBLIC HEALTH INSTITUTE OF SA BILL Minister of Health Further meetings to be scheduled

B15-2017 NATIONAL HEALTH LABORATORY SERVICE AMNDT BILL Minister of Health Further meetings to be scheduled

B14-2017 NATIONAL ENVIRONMENTAL MNGMT LAWS AMNDT BILL Minister of Environmental Affairs To be scheduled in next session

B13-2017 COPYRIGHT AMENDMENT BILL Minister of Trade and Industry Approved by Portfolio Committee

B12-2017 COMMUNAL PROPERTY ASSOCIATIONS AMENDMENT BILL Minister of Rural Development and Land Reform Further meetings to be scheduled

B11-2017 LEGAL PRACTICE AMENDMENT BILL Minister of Justice and Correctional Services Submissions being considered

B10-2017 INTERNATIONAL ARBITRATION BILL Minister of Justice and Correctional Services Submissions considered and Bill going forward

B9-2017 MARINE SPATIAL PLANNING BILL Minister of Environmental Affairs Planned for approval by NA

B8-2017 TRADITIONAL LEADERSHIP & GOV. FRAMEWORK AMENDMENT BILL Minister of Cooperative Governance and Traditional Affairs With NCOP for final consideration.

B7-2017 PLANT HEALTH (PHYTOSANITARY) BILL Minister of Agriculture, Forestry and Fisheries Meetings to be scheduled

B6-2017 CYBERCRIMES AND CYBERSECURITY BILL Minister of Justice and Constitutional Development Further meetings to be scheduled

B3-2017 ROAD ACCIDENT FUND AMENDMENT BILL Minister of Transport Further meetings to be scheduled

B1-2017 TRADITIONAL COURTS BILL Minister of Justice and Correctional Services Passed to Traditional House of Leaders

B24-2016 PERFORMERS' PROTECTION AMENDMENT BILL Minister of Trade and Industry Further meetings to be scheduled

B13-2016 RED TAPE IMPACT ASSESSMENT BILL Hon H C Kruger Further meetings awaited. Bill stalled

B12B- 2016 REFUGEES AMENDMENT BILL Minister of Home Affairs Bill reintroduced, finalised and going forward

B11-2016 NATIONAL FORESTS AMENDMENT BILL Minister of Agriculture, Forestry and Fisheries Further meetings awaited

B10-2016 LIQUOR PRODUCTS AMENDMENT BILL Minister of Agriculture, Forestry and Fisheries Approved by NA and NCOP finalising concurrence

B7-2016 NATIONAL LAND TRANSPORT AMENDMENT BILL Minister of Transport Further meetings to be scheduled

B6 -2016 PROTECTION, PROMOTION, DVPMNT & MNGT OF INDIG. KNOWLEDGE SYSTEMS BILL Minister of Science and Technology In final stages with NCOP

B1 INSURANCE BILL Ministry of Finance In NA for final reading

B39-2015 BROADCASTING AMENDMENT BILL Minister of Communications Further meetings to be scheduled

B37-2015 FILMS AND PUBLICATIONS AMENDMENT BILL Minister of Communications Final meetings in progress

B35-2015 FOREIGN SERVICE BILL Minister of International Relations and Cooperation Further meetings to be scheduled

B24 – 2015 EXTENSION OF SECURITY OF TENURE AMNDMENT BIL Minister of Land Reform Further meetings to be scheduled

B23-2015 TRADITIONAL AND KHOI-SAN LEADERSHIP BILL Minister of Cooperative Governance and Traditional Affairs To NA for adoption

B21-2015 PUBLIC SERVICE COMMISSION AMENDMENT BILL Minister of Public Service and Administration Provincial mandates received. Final debates in NCOP

B11– 2015 PLANT BREEDERS’ RIGHTS BILL Minister of Agriculture, Forestry and Fisheries Provincial mandates received. Final debates in NCOP

B8-2015 PLANT IMPROVEMENT BILL Minister of Agriculture, Forestry and Fisheries Further meetings to be scheduled

B4D-2015 EXPROPRIATION BILL Minister of Public Works With PLA to advise Public Works committees,

PMB5-2015 LABOUR LAWS AMENDMENT BILL Private Members Bill Almost concluded. Readings in NA

B100P-2014 MEDICAL INNOVATION BILL (PRIVATE MEMBER BILL) Narend Singh MP Bill to receive report from PLA. Further meetings 2018

B15B-2013 MINERAL AND PETROLEUM RESOURCES DEVELOPMENT AMENDMENT BILL Minister of Mineral Resources Final hearings. The next stage of passage to be determined by Charter events

Patrick McLaughlin PARLYREPORT Hof Communications Parliamentary Representatives Government Relations Cape Town

(The opinions expressed here are that of the authors and not necessarily those NPC of the American Chamber of Commerce in South Africa )