House of Assembly: Vol2 - TUESDAY 5 FEBRUARY 1985
Mr Chairman, I move—
Mr Chairman, I should like to raise a preliminary point here. The hon the Minister has moved to withdraw this particular Bill involving Iscor. However, at the same time, on the same Order Paper, we notice that the same Bill is reinstated on the agenda for the joint sitting on Monday. Unless the hon the Minister can give us a satisfactory explanation for this extraordinary procedure where the Bill is being withdrawn and replaced, we shall be obliged to oppose the motion before us. We should, however, like to give the hon the Minister an opportunity to explain why this is being done.
As the position is at present, if this motion is accepted, the motion as printed on the Agenda of the Joint Sitting will be removed. That is the ruling.
Mr Chairman, the question is: Why? If the hon the Minister wants to discuss it in this House, he need not withdraw it. It has been approved by the standing committee. Therefore, it is an extraordinary procedure to withdraw it and refer it back to a joint sitting.
Mr Chairman, if my proposal is accepted, I shall also withdraw its referral to the joint sitting. The substance of the matter has fallen away since I have accepted the proposals made in the standing committee.
Mr Chairman, we cannot agree to that as a reasonable explanation. This Bill was discussed at great length by the standing committee and it is obviously necessary that the existing Act be cleaned up. Sections 1, 6 and 8 all require attention. Some of them concern only the designation Industries, Commerce and Tourism which has to be changed to Trade and Industry, but the Act requires cleaning up. With due respect, the hon the Minister’s explanation makes no sense whatsoever. We cannot leave the Act as it is, which is the effect of withdrawing the Bill. If we do, we create the absurd situation where members of the House of Representatives and the House of Delegates can become directors of Iscor but members of the House of Assembly cannot. If we leave the Act as it is, section 6(l)(b) will read as follows:
These people are all forbidden to be directors of Iscor. No mention is made of members of the House of Delegates or of the House of Representatives. There must, therefore, obviously be another reason for the hon the Minister’s intention to withdraw the Bill which was to have served before the House. This Bill was unanimously approved by the standing committee and consequently we must oppose the motion for the withdrawal of the Bill.
Mr Chairman, the CP objects to the motion for the withdrawal of the Bill. The members of the standing committee gave this legislation their unanimous support and in terms of section 36 of the Joint Rules and Orders the Bill cannot be withdrawn if there is a vote against such withdrawal. We on this side are voting against it.
Mr Chairman, in the first place it is quite clear that the arguments of the hon members for Hillbrow and Walmer are not consonant. The hon member for Hillbrow told the hon Minister that if he could give an explanation as to why the Bill should not be placed on the Order Paper, which the hon Minister has indeed done, he would be completely satisfied. In spite of the fact that his Chief Whip is satisfied with the hon Minister’s explanation, the hon member for Walmer still rejects the Minister’s motion. The conclusion one can immediately draw from this is that the relevant motives of hon members are not as innocent as they are trying to make out. This applies also to the hon member for Langlaagte. What is now happening here is that the Opposition parties are attempting to wreck the whole aim behind the introduction of Bills by democratic means. What one can infer from the arguments of the hon members is that they are attempting to destroy the democratic right of an hon Minister to introduce legislation. The hon Minister quite correctly referred the Bill to the standing committee. The standing committee acted on its own initiative in exactly the way the new scheme is supposed to work. As the hon member for Walmer correctly stated, one of the clauses was unanimously rejected. Just as the standing committee has the right to take such a decision, namely to refer the Bill to the separate Houses of Parliament for consideration, so too does the hon Minister have the right to exercise free choice by setting aside any amendment with which he is not satisfied. This is part of the democratic process. Otherwise the majority no longer governs.
Does the hon member think it is democratic for a Standing Committee consisting of 23 members to take a decision on a Bill and a Minister subsequently to withdraw the Bill?
It is proof of democracy. [Interjections.] I cannot help it if the hon member for Rissik does not understand these things. I can enlighten him later in private. The point that the hon member for Kuruman is trying to make is that a group of 23 people can form a pressure group. This would mean that such a group could exert pressure on 178 other people. If one accepted the arguments of the hon members for Langlaagte and Walmer it would mean that those 23 people, as the English saying goes, are the tail that wags the whole dog. This cannot be allowed to happen.
Let us look at the practical situation. The hon member for Langlaagte said that in terms of section 36 of the Standing Rules and Orders the hon Minister’s suggestion could not be approved. In terms of section 31(4) it can be rejected by this House. [Interjections.] No, here I differ with the hon member. In terms of section 36 there must be a unanimous decision by the three Houses, but not in terms of the other section. There does not have to be a unanimous decision in rejecting it. This is the illustration or proof of the democratic process. What situation would be created in practice if hon members insisted that this legislation could not be withdrawn by a Minister? They would then be trying to force a Minister to proceed with legislation that he had meanwhile decided, for one reason or another, to withdraw. [Interjections.]
What his “stooges” could not handle.
Yes, and the hon member is such a “stooge” that he wants to go ahead with it. The hon member now wants to change the existing legislation that he supported. This pressure group cannot be allowed to nullify Parliament’s say in the democratic process, and for this reason the inherent right of the Minister to withdraw any legislation with which he, for one or other reason, does not wish to continue, must remain intact.
Mr Chairman, I think there are a couple of very important principles which are at stake here and which we need to sort out right at this very early stage. Firstly, the suggestion by the hon member for Vasco, that apparently the hon member for Walmer disagrees with our Whip, is absolute nonsense. The question was asked as to whether the intention was to go ahead with the legislation in the Second Reading at a joint sitting, if this was withdrawn. The answer was that it was not intended to do so; in other words, the whole of the legislation was to be abandoned. If it is going to be abandoned, the attitude on our side is—and that is the attitude of the hon member for Hillbrow who asked the question as our Whip—that we do not want the legislation to be abandoned. That is his attitude and ours.
Why do we not want this legislation to be abandoned? There is a very simple and very important test. The hon member for Vasco is under the impression that legislative authority is vested in the executive, but it is not. It is vested in the legislature, it is now vested in the three Houses of Parliament, of which this is one. Now, once legislation has been drawn up, a procedure has been evolved in terms of the Constitution for its reference to a standing committee. What is remarkable is that this is the first time that the standing committee has worked, and has worked effectively. What happened was that the executive drew up a piece of legislation which was unacceptable to the legislature, unanimously unacceptable. All three Houses, all parties, everybody said that it was unacceptable in the form in which the Minister wanted it. However, in our form, the form in which the standing committee wanted it, it was acceptable, and it came to this House, as it will go to the other Houses, in a form which is acceptable to all three Houses and all political parties. So, the very first time that consensus has worked, the hon Minister wants to destroy it. That is the most remarkable thing that I have ever seen. We are told to come here in order to achieve consensus. Hon members in that standing committee have a debate, come to a conclusion with which they all agree and produce a piece of legislation which is unanimously accepted by the whole of Parliament, except the Minister. The Minister now wants to use his power to withdraw a piece of legislation because it is not in the form in which he wanted it. Let us test him. How does this legislation differ from what he wanted? He must surely have had a reason for drawing it up in the first place. If he did not have a reason for introducing it in the first place, then he should explain to us why he did so. [Interjections.]
Just give me an opportunity to explain.
Right, we will give him an opportunity. What is the significance of all this? [Interjections.] Is the hon the Minister not going to withdraw it?
I will explain it to you.
No, I want the hon the Minister to answer some questions, and not the questions he framed himself. The difficulty is that he will not answer the real questions. The point is that the hon the Minister wanted a fundamental principle of Parliamentary tradition to be ignored. We raised this issue in regard to the constitution: If one is a member of a legislative body and one exercises any function in relation to it, one should not hold an office of profit under the State, be it directly under the State or through a para-statal position. Our attitude has been that one should not exercise a legislative function if one holds such an office.
The idea the hon the Minister had was that people who had served on the President’s Council should be allowed to be members of the board of Iscor. That is what he wanted. What is remarkable—and I say it is a tribute to that standing committee—is that the members of that committee, including the members of the hon the Minister’s party, unanimously did not want to agree with the hon the Minister’s stand on that fundamental principle. In other words, they believe in that fundamental tradition of Parliament that one should not hold an office of profit under the State while taking part in the legislative process of the country.
Now that the hon the Minister cannot get his way, like a spoilt little boy he wants to say: “I am now taking my packet of sweets back.” That is not the way it is going to be, because in fact the amended Bill still has very significant provisions. Attention was drawn to them by the hon member for Walmer. Under the existing Bill, if one is a member of the House of Delegates or if one is a member of the House of Representatives, theoretically one can serve on the board of Iscor. I do not know what such a member’s chances are of getting an appointment, but that is another matter. However, theoretically such a member could be there. The old Bill refers to the Coloured Persons Council and to the Indian Council, which no longer exist. So, that the Act requires amendment is beyond question. Of course it requires amendment. However, because he does not get his way with regard to letting a member of the President’s Council serve on the board of Iscor, the hon the Minister wants to withdraw the Bill. That we cannot accept.
The Bill enjoys the unanimous support of the standing committee and that is why, if the hon the Minister wants to withdraw it, he will now have to persuade the members of his own party in the standing committee, and use his Whip to force those members who agree with the Bill and have reached consensus with the other members, to vote against that in which they believed in the standing committee. That is why this issue is a test of consensus and is a test of the sincerity of those who preach consensus instead of practising it.
Mr Chairman, the hon the Minister handed to the Speaker so-called well-considered legislation to be put before a standing committee, and the standing committee met on 16 January to discuss this legislation. For this reason 23 members of Parliament were brought here at great expense to Parliament. The hon the Minister has also had a lot of time to prepare and put forward the legislation.
I can understand the hon Chief Whip of Parliament becoming nervous about this. After all, he promised us that we would be notified at least seven days before the time. However, we received some of the notifications much too late.
The 23-member standing committee concerned was convened at considerable expense for Parliament. The taxpayer paid for this. Now that consensus on the legislation has been reached, the hon the Minister comes along and says: “No, I am not satisfied with the Bill. I am now withdrawing it”. For this reason our party says we are sorry, but we cannot consent to the withdrawal of this Bill.
Mr Chairman, may I put a question to the hon member? In the light of his discourse on the importance of the meeting and the expense involved, why did he not give instructions to the hon member of his party who was present there, to take part in the discussion? The reason he did not want to take part was that he had not obtained the approval of his caucus. [Interjections.]
I agreed entirely with the alteration of the Act. The standing committee accepted it unanimously. For this reason the hon the Minister may not withdraw it.
It has been a long time since I last heard a debate in this House in which hon members knew so little of a matter, and kept on embroidering on it until they eventually got themselves into difficulties. [Interjections.]
Let us now take a calm look at the facts. I really felt profound embarrassment on behalf of the hon member for Yeoville. I can still understand other members running away with an idea they have not given proper thought to, but one does not expect this from the hon member for Yeoville. [Interjections.] What are the facts? [Interjections.] The hon member should rather contain himself so that he can listen to the facts. The fact of the matter is that the present Iscor Act prohibits a member of the President’s Council from becoming a director of Iscor. For reasons which are not relevant here now, I saw fit to submit legislation to Parliament in which that restriction regarding the President’s Council would be revoked. [Interjections.] That legislation was referred to the standing committee in the usual way. After the matter had been discussed, the standing committee—as members here indicated—decided unanimously that it did not want to accept that amendment; that it felt that a member of the President’s Council should not have an opportunity to serve on the board. What is this if not support for the provision that appears in the present Act? I accepted that. I said that it was in order, but with that the substance of the amending Bill fell away. Because I have respect for the time of 178 members in this House, I decided that it befitted the good order of this House not to introduce an amendment to a Bill that was purely of a semantic nature.
May I ask the hon the Minister a question?
Just give me a chance to finish speaking. The substance of the amendment was not acceptable to the standing committee, and I accepted the proposal of the standing committee that the restriction regarding President’s Council members as set out at present in the Iscor Act, must remain. For this reason I did not deem it necessary to proceed with the legislation.
It is also customary—and hon members in this House know this—that legislation of a purely semantic nature is not constantly submitted to this House, for example, legislation that merely alters names or references. The time to introduce amendments to legislation is when there are substantial alterations. But the hon member for Kuruman, in his great wisdom, comes along and talks about time that has been wasted. How much of the time of the 178 members in this House is not being wasted this afternoon? [Interjections.] The hon member has taken no notice at all of the amending legislation or of the amendment proposed by the committee. Because the amendment submitted to the standing committee was not acceptable to the committee, it was not necessary to alter the Iscor Act. The Act remains as it stands at present and so the restriction regarding members of the President’s Council remains. So as not to take up the time of this House unnecessarily, I therefore proposed that the legislation not be discussed here and that consequent amendments be effected when there was a substantial amendment to the Iscor Act in the future.
Will the hon the Minister answer the question now?
Yes, I will answer it now.
First of all, may I ask the hon the Minister whether there is not a further amendment other than the one in respect of the President’s Council. Is there not an amendment dealing with Parliament as a whole, as opposed to an amendment dealing with the House of Assembly, the Coloured Council and the Indian Council? Is that not the correct amendment to have effected?
Secondly, is it not correct that the other amendment in regard to what were called semantics should be dealt with at the same time?
Thirdly, in the time that has been spent in discussing the withdrawal of this legislation, could we not actually have completed all stages of the Bill and have disposed of it by now?
Sir, had those hon members acquainted themselves with the substance of the legislation, all the debate this afternoon would not have been necessary. In terms of interpretation, the reference to the “South African Coloured Persons Representative Council” and the “South African Indian Council” as it stands in the present Bill, would certainly also have referred to the existing Chambers. [Interjections.] If the hon member argues that changes in legislation to bring it in line with the existing position in terms of the names of parliaments or departments should regularly be tabled in this House, there would be a continuous flow of legislation.
*The fact of the matter is that the amendment submitted to the standing committee dealt with the President’s Council.
That is not true.
It is correct. That was the essence of the amendment. I grant the hon member that if one wants to rectify the legislation and bring it into line with the present situation, this amendment should also have reference to the House of Delegates and the House of Representatives.
There is a difference between the House of Assembly and Parliament.
But it does not alter the essence of the meaning that was originally before the standing committee. For that reason I stand by my motion and I should like to put it before the House as it is.
Mr Chairman, may I put a question to the hon the Minister?
The hon the Minister has closed the debate, but I am nevertheless prepared to allow the hon member to ask a question.
Can the hon the Minister give us an indication whether all references in all legislation relating to the South African Indian Council or the South African Coloured Persons Representative Council will apply to the House of Representatives and the House of Delegates? That was, in fact, what he was saying.
I cannot reply in respect of other legislation. The hon member has asked a very general question. [Interjections.]
Since there are some questions regarding the interpretation of Joint Rule 36 I intend to move the adjournment of this debate.
It would be greatly appreciated if the debate could indeed be adjourned now. Joint Rule 36 is very clear; on the other hand, however, it is also clear that this House must have the final say over its own affairs. This matter will have to be studied and because this will be the first ruling of such a nature, I should like to consider my ruling very carefully.
Mr Chairman, at this stage I therefore move:
Mr Speaker, I move:
Since the Credit Agreements Act, 1980 (Act 75 of 1980), came into effect on 2 March 1981, various practical problems which hampered the effective application of the Act became evident. Although some problems will be overcome by means of the promulgation of regulations, it has now, as a matter of urgency, become necessary to make certain amendments to the Act and also to make the practical implementation of the Act generally more streamlined. The amendments which are envisaged are mainly of a technical nature, but as a result of changed circumstances, it has also become necessary to effect other amendments in order to achieve the above goals.
I want to refer briefly to the most important proposed amendments.
Since this Act came into effect, the tendency has developed, particularly with regard to the sale of furniture and motor-cars, for banking and financial institutions—in contrast with traders, as was the case in the past—to start acting to a greater extent as credit grantors. It consequently became necessary to expand the existing definition of “credit grantor” in such a way that it would in future include the concept of “dealer”.
The result of the current wording of the definition in question is that a dealer who contravenes the Act by, for example, advancing a deposit to a prospective purchaser, cannot be prosecuted for this contravention because he is not a credit grantor in terms of the Act and technically does not fall within the ambit of the Act. The proposed amendment of the definition of “credit grantor” will solve the present problem because the dealer will also in future be subject to the limitations which are imposed by the Act on credit grantors.
Mr Speaker, may I ask the hon the Minister whether he is aware of the fact that the courts have interpreted the word “dealer” as including the word “seller”, and that the word “seller” is therefore superfluous in the definition if the word “dealer” is included.
Mr Speaker, the Department has, up to now, experienced tremendous problems in this respect. This word was therefore inserted to put the matter beyond any question. We can debate it later on in the appropriate debate.
It is also happening on an increasing scale that dealers are placing advertisements in the media which are blatantly in conflict with the provisions of the Credit Agreements Act, 1980, for the specific purpose of attracting prospective buyers to their business premises. In this regard I refer to those instances where motor-cars and furniture are advertised for sale on instalment terms and where in the advertisements, it is clearly stated that either no deposit or a very small deposit is required. As such advertisements frequently lead to the conclusion of contracts which are similarly in conflict with the provisions of the Act, the placing of such advertisements can now be made illegal as a result of the proposed amendment contained in clause 3 of the amending Bill. By means of this amendment the powers of the Minister to promulgate regulations are expanded, having the effect that any advertisement, the contents of which are not in accordance with the provisions of the Act, may be prohibited.
A further important amendment is contained in clause 4 of the Bill which makes provision that the wording of section 13(1) of the Act, in which the so-called five-day cooling off period is embodied, must now be printed in bold type on the face of all credit agreements. The reason for this is that investigations, as a result of complaints received, have brought to light that although section 5 of the Act required that credit agreements must refer to section 13(1), it is not pertinently brought to the attention of credit receivers what their rights with regard to the cooling-off period are and as a result credit receivers are, in most cases, totally unaware of this.
Some credit grantors follow the practice of placing conditions in the fine print of the contract, which conditions are directly in conflict with the provisions of the Act. To protect themselves against possible prosecution, a provision is then included in such a contract, the so-called “pro non scripto” clause, which has the effect that any condition in the contract which in this manner is in conflict with the Act, shall be regarded as not being written.
By an amendment of section 6(1) of the Act as contained in clause 5 of the Bill, the use of these “pro non scripto” clauses in credit agreements will in future be forbidden.
*A second amendment embodied in clause 5 of the Bill relates to the initial payment or initial rental payable in terms of a credit agreement. The minimum amount in this regard is governed by regulation. Notwithstanding the provisions of section 6(5) of the Act, which provides that no credit agreement shall be binding until the credit receiver has received the full deposit, inspectors of the Department have ascertained that the said provision is constantly being contravened in this regard.
In practice credit grantors who enter into such agreements ignore the provisions of the said section 6(5). This occurs particularly in cases where the credit receivers concerned are relatively unsophisticated. They then enforce the conditions of such contracts, although they are not entitled to do so because these contracts are not yet binding on either of the parties. The proposed amendment will henceforth make it a criminal offence to be a party to a credit agreement where the relevant amount stipulated has not yet been paid or received in full.
A further amendment concerns the cancellation of a credit agreement by a credit receiver in circumstances where the credit grantor initiated the credit agreement and where it was signed by the credit receiver at a place other than the credit grantor’s normal place of business. Section 13, to which I referred earlier, provides that a credit receiver may terminate such an agreement within a stipulated period. This embodies the condition that a written offer to return the goods must be made to the credit grantor within a period of five days after the date of the contract.
Trade inspectors of the department find that in many of these cases, particularly when credit receivers are less sophisticated, credit grantors create the impression that credit receivers are liable for the physical return of the goods concerned. It was never the intention of the Act to burden the credit receiver in this way. Because the present wording is somewhat ambiguous, the intention is being clarified by the insertion of a provision in which the onus to collect the relevant goods is placed squarely on the credit grantor.
An important amendment aimed at the effective application of the Act, is envisaged in clause 8 by an amendment to section 26(6) of the Act. The aforesaid section of the Act provides that, as far as banking and financial institutions are concerned, an inspector of the department may not exercise his powers of inspection unless prior written permission has been obtained from the Minister of Finance.
In practice, this restriction is causing major problems for inspectors who have to investigate alleged contraventions with regard to specific credit agreements which are in the possession of these institutions. In order to ascertain the magnitude of the difficulties being experienced in this regard, the regional offices of the Branch: Trade Inspections of the department undertook a survey of the number of cases in which banking and financial institutions offered financial facilities on the premises of businesses in order to provide credit facilities. In five of the 14 regions administered by the said Branch it was found that financial institutions offered their facilities on the premises of no fewer than 500 businesses. In the majority of cases it was found that the staff of banking and financial institutions carried out their activities on these sales premises on a full time basis. Consequently almost all credit agreements are being kept by such financial institutions. Inspectors have found that many of these institutions are not very helpful as regards the inspection of contracts in their possession by inspectors of the department.
In order to enable inspectors to carry out their duties properly it is essential that they be empowered where necessary to check the contents of credit agreements, without having to go through the time-consuming procedure of obtaining the prior written permission of my colleague the hon the Minister of Finance. This matter is now being rectified by the amendment embodied in clause 8 of the Bill.
The amendments I am contemplating in this Amendment Bill will result in its being possible to apply the provisions of the Credit Agreements Act, 1980, more effectively.
Second Reading resumed
Mr Chairman, the Bill before the House must be seen in the context of the special social, economic and political conditions in which we find ourselves in this country. Nowhere do the First and Third Worlds intermingle to the degree that they do here or are they contrasted more starkly. The reasons are obvious. Wealth distribution is probably among the most inequitable to be found anywhere and the division between the First World and Third World economies follows both colour and racial lines. Consequently an unscrupulous deal that takes place between a seller and a credit purchaser tends to be seen as a deal between White and Black and not just as a deal between a seller and a purchaser. This can exacerbate racial tensions in the country and is seen by Blacks as White/Black exploitation. The authorities are therefore correct to tighten legislation for the protection of the purchaser in a credit sale. We have all at one time or another seen the type of literature that is disseminated among people with whom we work. I saw an example quite recently which reads as follows:
This entices people who are unsophisticated into such a place believing that they will have money to spend.
While it is true that there has been a narrowing in the racial salary gap, the 1980 census figures show that for the cases where statistics were available, 90% of the Black population earned less than R290 per month, compared with 75% of the Coloured population and only 10% of the White population. When we take into account the figures produced by the University of Port Elizabeth’s Institute for Planning Research which give the breadline wage for families in major metropolitan areas in South Africa as ranging between R250 and R290 per month, it is quite obvious that there is very little room for discretionary spending.
This Bill which we have before us has the effect of making the definition of “advertisement” more comprehensive, and it gives the Minister the power to prohibit any advertisement which he believes in contravention of the Act. The proposed paragraph (a) inserted by clause 1(b) amplifies the definition of “credit grantor” to include a dealer.
It has further been found that purchasers are frequently unaware of the so-called “cooling-off period” of five days. Provision is made in this amendment that this right which the credit purchaser has in some circumstances, is given prominence, and the manner in which this is printed on a sales document or agreement is specified.
Clause 6 amends section 13 which applies to the “cooling-off period” and makes it quite clear whose responsibility it is to take back—in the sense of physical handling—the goods that have been supplied.
Clause 8(c) provides for the amendment of section 26 of the principal Act by the amendment of subsection (6) to the effect that any inspector without requiring the approval of the Minister can now inspect the goods of a financial organization involved in a credit deal.
There is one aspect which is not clear and which the hon the Minister could perhaps explain to us. In his explanatory memorandum, he speaks of a situation, pro non scripto, which has the effect that, any condition in the contract which in this manner is in conflict with the Act, shall be regarded as not having been written. I cannot actually see how this is to be achieved in terms of the Act. Perhaps the hon the Minister would explain this to us, because the amendment that we have to that particular section in the Act does not seem to achieve that at all.
The Official Opposition, for the reasons I have given, will nonetheless be supporting this amendment.
Mr Speaker, we have a very interesting Bill before us. In recent years our banking and financial institutions have begun to play a greater role in the provision of credit, especially in the consumer market; to such an extent that it has often been said that it has got out of hand. As far as the term credit grantor is concerned, where the commercial banks and the financial institutions have in fact taken over from the dealer, the term “dealer” has indeed been omitted here. This creates many problems in the implementation of the Credit Agreements Act. Let me give an example in this connection. If one’s bank or financial institution is acting as credit grantor and at the same time as seller, the dealer can say: “Look, I shall pay the deposit.” This means that one’s credit receiver and seller can make purchases on 100% credit. You yourself will realize, sir, the detrimental effects this may have on people who cannot afford it. One cannot clamp down on the dealer for this contravention of the law. He will just tell you: “Look, I am not the seller anymore; nor am I the provider of credit”. This may sound theoretical, but if we walk into certain garages today to buy a new car, we often find that the various banks have people sitting at tables offering us credit financing. They encourage us to buy. One hardly ever sees the dealer as such, and the purpose of clause 1 is to introduce the term “dealer” under the term “credit grantor” so that one can clamp down on him in order to prevent 100% credit financing. I think this is a good thing. We all know that the hon the Minister of Finance announced in August that he wanted to bring the excessive hire purchase financing under control. I want to be very honest in saying that in future we shall have to pay more attention to the control of credit in the case of hire purchase.
Over and above the fact that the dealer can borrow the deposit for the buyer, he goes further and advertises it. One even gets cases where the dealer advertises: “Come and buy your car from me because I shall give you a 100% loan”. The dealer who wants to be honest suffers because of this kind of advertisement. This is where the provisions of clause 3, which authorize the Minister to keep this kind of advertisement in check, come in, because in point of fact this is illegal. The Bill must therefore be seen as a way of clamping down on dishonest people.
The hon member for Walmer only spoke here of the White dealer and the Black buyer. I want to tell the hon member that we are dealing here not only with the Black man, but also with the White buyer. I think this legislation entails protection for the credit receiver.
The recommendations contained in this legislation are also meant to facilitate the work of the inspector. He is the man who must act to keep dishonesty in check. It makes matters very difficult for such an inspector to act if the dealer pays the deposit and then, in addition, advertises illegally just to attract people to his business premises.
Let us just briefly analyse further the definition of “advertisement”, because there are many who complain about this definition. I just want to mention that this is the accepted definition of “advertisement”. Their fear is that this definition of “advertisement”—and this is how they put it to me—as well as the fact that the Minister can act in the case of illegal advertisement, can now lead to advertisements which have been produced at great expense, for example for television, being prohibited unexpectedly by the Minister. However, I believe that some of our banks and financial institutions have not quite understood this aspect until now. I do not think that the Minister will act to prohibit unnecessarily a very costly advertisement for, say, a bank. In addition, I think that our banks are responsible enough not to prepare advertisements for telecasting on television if those advertisements do not comply fully with all the legal requirements.
I therefore believe that those who entertain these fears, are unnecessarily concerned about the whole question of the definition of an advertisement for the purposes of the legislation in question. After all, the fact that the Minister must decide whether an advertisement is legal or not, will give those concerned the protection of knowing that no unnecessary action will be taken against anyone whose advertisement is correct and complies with all the requirements set.
This brings us to another very interesting aspect, viz the credit agreement itself. When one picks up a credit agreement, one does not usually read the fine print—the so-called “small print”—very carefully. Only when one does so does one really appreciate what one’s true rights are. Clause 4, and to an extent also clause 5, of the Bill in question concern the aspect of the protection of the credit receiver as far as the content of the specific agreement is concerned. Section 13 of the Principal Act provides that if the seller or the dealer himself displays the initiative to, say, settle a transaction outside the property from which he operates, certain conditions apply.
For example, a dealer may turn up at someone’s house with a load of furniture on a Friday afternoon at sundown and try to persuade the householder to sign for its receipt. Perhaps this householder has just returned home from work; perhaps he has even had a few beers. He signs the proffered document and the furniture is off-loaded for him there and then.
However, towards Monday morning that poor man comes to his senses and realizes that he does not want that load of furniture. But the fact is that the dealer, on his own initiative and away from his own premises, has persuaded that householder to sign a purchase agreement. Therefore the legislation stipulates—for the very purpose of protecting people in cases of this nature—that in such a case the buyer has five days in which to think it over. Of course, many buyers or credit receivers do not realize that they have those five days of grace; nor do they know that if in that period of five days they decide that they do not want that furniture, they can inform the seller by way of notice that he must come and fetch it. In order to make this fact known to the buyer or the credit receiver, this stipulation must now appear in the purchase agreement in bold print. I believe that that is very important. It is important that the buyer or credit receiver knows exactly what his rights are.
Of course a lot of criticism is also being advanced in respect of this aspect. Many banks and other financial institutions argue that they have already printed so many agreements that they are not very keen to destroy them all. However, we know that if this measure were to be approved, the Minister would give those banks and other financial institutions a period of grace of at least 6 months by means of proclamation. This will give them sufficient opportunity to get rid of their existing documents and have new ones printed. Therefore I do not believe that this will cause banks and other financial institutions to suffer any losses at all.
It is also interesting to note that certain credit grantors include stipulations in their purchase agreements which are totally illegal. For example, a prospective credit receiver reads through all the stipulations of the specific agreement, but seldom notices that right at the bottom of the document—in fine print again, of course—an exempting provision in favour of the seller has been inserted. This is the so-called pro non scripto clause, which stipulates that if any of the preceding stipulations are illegal, they are no longer valid. This irregularity is also being eliminated by means of the measure in question. The seller may no longer adopt this practice. This is now being eliminated. He may no longer do this. He may no longer insert this pro non scripto stipulation in his agreement.
Next I come to the question I mentioned earlier. The credit receiver does not know that he does not have to return that furniture. If he has notified the seller in writing, the latter must fetch the furniture himself. However, what happens is that the dealer says that he is very sorry, but that the credit receiver must see to it that the furniture gets back to his shop himself. The poor man may be at some remote spot, without the use of a lorry, and from sheer necessity he then buys the furniture. In my opinion it is a very good practice that when the sale has not taken place on the seller’s property, he must take the initiative to see to it that that furniture goes back.
An interesting adjustment which has been made with regard to inflation, one to which the hon member for Walmer also referred, is that in favour of the lower income groups. Limits are imposed on a person whose monthly salary is less than R250, whereas the previous figure was R100. Indeed we know, from experience with the petrol prices, that nowadays R100 can become R250 in a very short period of time. In any event, we are now protecting the lower income groups by means of this kind of agreement.
Another interesting aspect in this Bill is that at the moment the Government determines the repayment period and the deposit of a credit agreement. An interesting possibility is that a buyer will pay only half of the deposit when he initially signs the purchase agreement. It often happens that the credit grantor holds those documents back, so that when the second half of the deposit coincides with the first instalment, the credit receiver is often not capable of paying the second part, or he cannot afford to pay the first instalment in full. The credit grantor then regards it as his right to repossess that furniture, because the purchase agreement has not been complied with. This is against the law. Actually the credit grantor has no right to repossess those products, because in reality no agreement has been concluded. The deposit and the instalments had to be paid, as determined by the Government. It is absolutely against the law for people to try to make the repayment period of instalments longer than has been stipulated by the Government. That is very important to us because, as I mentioned at the outset, a year or two ago there was a total oversupply of consumer credit. The Government is now trying to curb that overspending.
Another aspect which I want to point out, is that as far as the agreement is concerned, the inspector often has a problem obtaining the credit agreement. At the moment he has to get it from the credit receiver, but as I said, it may happen that the credit receiver has not paid his deposit in full. In that case the credit grantor withholds the agreement. The inspector is in an invidious position, as the conduct of both parties is against the law. The inspector requests that the document be handed over to him, but the credit receiver does not have it in his possession. At this stage the inspector may not approach the bank and say that he wishes to examine the document. This means that the matter cannot be taken any further. In terms of the last clause the inspector is now empowered to ask for the document to be handed over to him. Then, of course, he can verify whether or not the receipts are in order.
Finally I think that this is an amendment which has developed due to practical reasons; that is to say, the correct implementation of the Credit Agreements Act. I think we should whole heartedly support it. I think it is a great improvement, and I think that we are going to help our inspectors and the department a great deal. Therefore we can approve this Bill.
Mr Chairman, the hon member for Waterkloof made a very well-considered and shrewd speech. One can see that he is someone who has given this matter a lot of attention. I must congratulate him because I think he made a particularly good speech. It does this House credit when this kind of speech is made and when we, as the guardians of the public at large, can act in the way the hon member acted today. [Interjections.] I always like to listen to speeches of this nature and, afterwards, to congratulate the hon member who made it. One must always give credit where credit is due.
Here in South Africa the profound ignorance of most of our buyers concerning their rights, is a major problem. It is one of the problems that one has to deal with, because in actual fact fair play and justice should ensure a balance, such that one is not favoured more than another. However, it is very difficult when one has to deal with an underprivileged community or a community in a problem situation, and one has to let those people participate with authorities in the best institutions in the country. This is indeed a very difficult process. I want to say that the hon member for Waterkloof made a particularly good speech. I want to tell him that what he did here was praiseworthy. One would like to see all hon members making a study of a matter as he did.
There is one matter in his speech which bothers me; it concerns the bank’s documentation. I do not ask for a period of six months to be granted in their case so that they can process the documentation. There is an ordinary stamp which can be imprinted on the documentation in terms of section 13, and what is more it will make it more conspicuous. That stamp, in red ink, is imprinted on the black and white documentation. It is simply a question of “thump”, and the documentation has been stamped. [Interjections.] Oh, I like that, because then the people who are concerned, must see it! The buyer immediately sees what he is dealing with.
I think the biggest single problem today is not the fine or large print, but the level of education which we as Members of Parliament must strive to improve so that we may have an enlightened population, especially as regards their rights as buyers. The population must know how to read an Act. They must know what to provide for. Everyone must know how he can be protected by the insertion of one small provision in an Act.
These are important aspects. The Bill introduced by the hon the Minister is one which has become necessary. What it entails is that the existing definition of “credit grantor” be extended to include the term “dealer” in future. Where the dealer is not the credit grantor, he may accept a reduced deposit without breaking the law. An example of this is delayed instalment payments on cars. [Interjections.]
I hear someone asking whether I am reading my speech, but I must say that it is just my usual good delivery.
The spirit and letter of the law are being evaded. Advertisements are being placed that are directly at variance with the provisions of the Credit Agreements Act, 1980, with the sole purpose of luring prospective buyers to business premises. In most cases the provisions of section 13(1) are being evaded. The cooling-off period of five days is being destroyed as a result of this method. In such a case it is not put into operation.
There is an important amendment in clause 4. It entails that sufficient provision is made in section 13(1) for a cooling-off period of five days. As I have said, it will be best if the stamp to which I have already referred is imprinted on the documentation. It can be done so easily. The other fine print under the stamp is never jeopardized. Actually one feels sorry for an hon Minister in this position who must work with credit agreements. In the beginning one tackles everything; the department in question is wholeheartedly in favour of protecting the buyer. However, in the course of time one learns that it is impossible to protect the buyer against himself. Therefore I should like to request again that we perform an educational function.
Take the media, for example. There is the SABC, which so seldom does anything good, especially for the Whites in South Africa. [Interjections.] At least there can be an item in the evening which says: “Look at the following.” Section 13, which deals with the purchase agreements, can then be discussed. That will only be to our advantage. In any case, we pay too much tax for that institution. Mr Chairman, I should like to support the legislation.
Mr Chairman, the hon member for Langlaagte has the ability often to amuse one with his statements. It is also sometimes possible, however, for the hon member to irritate one. [Interjections.]
The hon member for Langlaagte has now again thought fit to throw in something about the ethnic or racial question. I am not going to react to that because I think it is a fruitless exercise. Bridging the colour line, the hon member for Walmer also referred, in his introductory words, to the various income groups. That is a game those hon members enjoy. I leave it to the hon members themselves to decide whether it is unproductive and of little value or not.
The hon member for Langlaagte pointed out that he and his party supported this measure. He also referred to the hon member for Waterkloof having said that he had studied the matter thoroughly and discussed it at length. I think the hon member for Waterkloof analysed the legislation so thoroughly that those who are going to succeed him will have to search very deeply in an effort to add anything he has not yet discussed in his approach.
One cannot question the desirability of the adjustments in this amending Bill. These are bottlenecks which have already been encountered in practice and for which legislation seems to be necessary. Unfortunately it is true that with the theoretical approach one does, at times, also drop a brick. I say this with respect towards many of our economists and other people who entertain certain opinions on certain matters. In this case practical experience has shown that the amendments are indeed necessary.
As previous speakers have already said in the past, credit receivers did not always have the best of it as far as that matter was concerned. This was as a result of practices which were adopted by the credit grantors and which were in conflict with certain stipulations. The position is now being very specifically corrected. The procedure involved in, and the right of inspection are also going to facilitate matters. It will ensure that proper inspection is carried out and that care is taken that matters take their course in accordance with the regulations of the Bill.
We are living in a time in which credit plays a very important role; in fact, there are few people today who do not have to make use of credit facilities in some or other way. It is also true, however, that prevailing interest rates have a strangling effect on the ordinary man’s planning and his struggle to exist. Therefore the relevant action of credit grantors should not be such as to make matters for the man in the street even more difficult.
We have a system of free competition, and in a capitalistic country the importance of this system is often stressed. One must ensure, however, that free competition is not applied in such a way that the buying public is exploited.
It is a recognized fact that there is no strong competition amongst the respective financial institutions. They do compete to a certain degree, but when it comes to the fixing of interest rates and so forth, there is a fair amount of agreement. I do not want to use the term “price-fixing” in connection with interest rates, but there is always a connection between the interest rates levied. I realize that to a great extent these are market-related interest rates, and one can expect financial institutions, as far as possible, not to drop below that limit. I am informed, however, that where there is a slight measure of competition amongst financial institutions, justice is not always done to the credit receiver. If someone wants to receive credit, negotiate a loan or enter into a higher purchase agreement, he can find out from the different financial institutions about the lowest interest rates at which he can obtain the money. I understand, however, that such a person is sometimes told: Very well, we can levy up to 32% interest, but as you have a good record as a buyer, we shall grant a lower interest rate on the desired amount. The man is then helped by the institution concerned, but within a short period that interest rate is increased tremendously. It could be an abuse that is being perpetrated, although it is not illegal because the institution is entitled to increase the interest rate. I think that buyer is being misled to a certain extent because he accepts that the people will let him pay the agreed interest rate at least for a considerable portion of the period for which he obtained the money or entered into the loan agreement. Often, however, it is raised even before he has paid his first instalment. I mention this in passing, because I do not regard it as a sound practice. I think that the financial institutions, although entitled to do this, should not give people who use this method to finance deals the wrong impression. It is logical that when a person buys an article, particularly an expensive article such as a motor vehicle, which could even cost more than R40 000, an interest rate of say 24% is laid down and he then calculates his instalments, and having decided that he can afford it, and if the interest rate is raised within a short period by 6% or 8%, this would make a considerable difference to his instalment and could therefore seriously influence his budget.
They are swindling him.
The hon member says they are swindling him. Well, perhaps one can say it is swindling which is not completely illegal, but I would say that it is not a fair practice.
Since these amendments now at least envisage decreasing the loopholes, if they cannot be plugged completely, I think we can all accept that it is in the interests of the general public. Where the rights of the credit receiver are more clearly brought to his attention, it can only be welcomed.
The hon member for Waterkloof referred to advertisements and the question of granting credit of 100%. I want to add that in my opinion it is not advantageous to any community or the economy of a country to buy goods at 100% credit, especially goods which are not fixed property. Sometimes the temptation becomes too great for people if they can buy an article without having to put down any specific amount when they buy it, only having to repay the debt by instalments. In my opinion the temptation to buy things they cannot afford would at times become too great.
Mr Chairman, I should like to support this amending Bill in the full conviction that it will contribute to better commercial practice as far as credit purchases are concerned.
Mr Chairman, I think today will go down in the history of this House as a red-letter day, because for the first time since they broke away I heard a member of the CP say something nice about a member of the NP. I am referring of course to the hon member for Langlaagte’s compliments to the hon member for Waterkloof.
It is quite remarkable how long we can take when we are all in agreement about something, and it does appear as if we are all in agreement on this Bill. However, I do not intend to spend much time on the discussion of the Bill. Other hon members have squeezed out every little bit of information about this Bill for the benefit of all of us. I just want to say that under normal circumstances in a general Westernized society I believe that this sort of Bill would be undesirable. However, in our society it is not only desirable but also imperative. These amendments very positively improve the existing Act, which has a number of defects. A very large proportion of our society is unsophisticated, while at the same time we also have a fairly substantial number of rather hard and unscrupulous business types who, given the opportunity, will take advantage of these unsophisticated people. It is for this reason that we will support this Bill. As I have said, normally we would believe in the legal adage of caveat emptor, which is desirable because one wants to interfere as little as possible with business. However, as I have also said previously, we have a situation in this country where bad race relations can be created through these unscrupulous businessmen.
As far as the provision is concerned that dealers will be treated in the same way as financial institutions, I think this is very necessary, because in these days of very high interest rates it is obviously more profitable for dealers to handle their own financing. This being the case, I think the provision is necessary. The same applies to the cooling-off period being overstamped. I would like to suggest that the Department of Manpower be requested to circularize employers on this particular point so that they can advise their staffs as to their rights in this matter, particularly with regard to the cooling-off period. I am quite sure that the vast majority of people, particularly Blacks, are not aware of this. We will support the Bill.
Mr Chairman, an atmosphere of cordial approval prevails in respect of the Bill before the House and I want to thank hon members for a number of very positive contributions in this connection. I should like to refer to a few questions which hon members put and to remarks which they made.
†The hon member for Walmer welcomed the Bill and referred to the proposed amendment in clause 5 of the Bill. He asked whether the proposed amendment would be sufficient to forbid the pro non script clauses in a contract, which may be included by a dealer in contravention of the existing Act. I am not a legal expert but according to the legal advisers the changing of the wording “to the effect that” instead of the wording “having the effect that” in section 6(1) of the Act, will be sufficient and will forbid any dealer inserting something into an agreement contravening the Act. The hon member shakes his head. I am not a legal expert but this amendment has been cleared with them. We also put a few other queries to them in this regard but they are adamant that the proposed wording is adequate. I would therefore rather accept the expert view in this regard.
*The hon member for Waterkloof gave a very thorough and clear explanation of several important implications of the Bill. He also referred to the extension of the definition “credit grantor” to include a dealer. The purpose of this amendment of the definition is to try to prevent a present undesirable practice, namely that a dealer who no longer handles the financing for the purchase of a car, for example, comes to an agreement with a prospective buyer to advance him a sum of money and that sum is used by the prospective buyer to pay his deposit fully or in part to the credit grantor. It is a clear evasion of the existing provisions in the Act and the extension of the definition will make it possible to clamp down on the dealer who is guilty of such an act in terms of this Act. The fact that financial institutions are in fact acting as credit grantors, has restricted the enforceability of the provisions of the Act on the dealer, and with this extension we hope to be able to hold the dealers, who evade the law in this manner, liable.
The hon member also referred to the new definition of advertisements which has been inserted into the Act. I want to make it clear that there need be no fear that the Minister will use this power to prohibit advertisements left, right and centre, because it only applies to advertisements that are contrary to the provisions of the Act. When an advertisement is used to lure prospective buyers to business premises under the impression that a specific contract is being offered in which, for example, no deposit is required, it is contrary to the law and advertisements of that kind must be prohibited.
As did other members, the hon member referred to the important implications of section 13, which deals with the protection the purchaser enjoys in this connection, especially where modern high pressure sales techniques often make it difficult for a buyer, especially an unsophisticated buyer, to refuse a very attractive contract of purchase and sale. Section 13 very clearly provides that the buyer or credit receiver may cancel the contract after consideration of the transaction. However, as other members also pointed out, the big problem is not the powers conferred by legislation, but ignorance.
The Credit Agreement Act is an important instrument to protect the consumer. It is one of a whole series of instruments which exist to protect the consumer. In this connection I can refer to the Trade Practices Act, the Maintenance and Promotion of Completion Amendment Bill, the Estate Agents Act, the Price Control Act, the Shareblocks Control Act, the Property Timesharing Control Act, the Trade Metrology Act and so forth. Possibly there is other legislation, too, which is aimed at protecting the consumer.
However, one can protect the consumer only up to a certain point. In particular, one cannot protect him against his own ignorance. Therefore the biggest challenge for effective consumer protection is to inform the consumer of his rights and privileges in the market. In this connection I should like to thank the media for the important role that they, together with the Consumer Council and other organizations, are playing in this connection. The newspapers in their columns are making a major contribution to encouraging consumer vigilance and sensitivity. Consumers get the opportunity to lodge complaints in these columns.
The Consumer Council, which is also capable of following up complaints of consumers and which strives to convey information to consumers, has already extended its activities. Last year an office was opened in the Cape. In the meantime an office has also been opened in Durban. Ultimately, however, the onus is on the buyer himself to make very sure of the contract into which he is entering. It is the buyer’s responsibility to adopt a sensible purchasing policy, not to spend easily and to consider very carefully what the implications of his purchase are going to be, for even with the most effective Credit Agreements Act the buyer can still commit himself wittingly and legally to a contract which requires instalments that he cannot afford. He could bind himself to future payments which in reality he cannot afford. No legislation can protect a prospective buyer or credit receiver against that. Therefore it is necessary for the buyer or credit receiver to accept responsibility for the money which he will in the end have to cede to a credit grantor in this manner in future.
I also want to thank other hon members for their contributions. The hon member for Welkom referred to aspects of the competition policy. In the discussion of another amending Bill which will come before the House later, I should like to say a bit more about the remarks made by the hon member. The fact of the matter is that financial institutions are not excluded from the very important investigation which the Competition Board is at present instituting into price maintenance, even on a horizontal level, among various institutions, also as far as interest and prices are concerned. However, I shall have an opportunity later to say something more about that. I want to thank the hon member for his contribution, and the other hon members as well. I also want to thank all the hon members for the support they are pledging for this legislation.
Question agreed to.
Bill read a second time.
Certified fair copy of the Bill to be transmitted to the State President for his assent unless the House decides within three sitting days to refer the Bill to a committee.
Mr Speaker, I move:
The acceptance by Parliament during 1984 of the Close Corporations Act, Act 69 of 1984, which came into effect on 1 January 1985, necessitates minor technical amendments to the Estate Agents Act of 1976, Act 76 of 1976. Currently, the Estate Agents Act makes no reference to close corporations with the result that should an estate agency business now be run on the basis of a close corporation, such a business would not be subject to the provisions of the Estate Agents Act. The intention with the amendment to the Estate Agents Act is therefore to incorporate into the existing provisions of the Act the term “close corporation” and all relevant terms related to close corporations, such as a member or an officer of a close corporation who actively takes part in the business of a close corporation.
*An important aspect of the proposed amending Bill is that the sale of an interest in a close corporation will in future be considered to be a matter falling within the ambit of the normal business activities of an estate agent.
The amendments contained in this amending Bill are all of a merely technical nature, and I therefore do not deem it necessary to discuss any amendments in detail.
Second Reading resumed
Mr Chairman, it is not the intention of this side of the House to take up and waste a lot of time in debates on measures which are clearly not controversial and which we support. When the Close Corporations Act was passed in 1984, it enjoyed the support of this party and we welcomed its introduction. It came into effect from the beginning of this year. The purpose of the Bill before us is actually very simple. It is to ensure that, where close corporations or members of close corporations undertake the business of estate agents, they will comply with the provisions of the Estate Agents Act of 1976. It is obviously desirable that the provisions of the Estate Agents Act should not be circumvented in any way and we will therefore be supporting this Bill at Second Reading.
Mr Chairman, my thanks to the hon member for Pietermaritzburg South for his support. This is only a short Bill but it is also a very important one designed to bring order to the entire property industry. The Estate Agents Act of 1976 undoubtedly brought order and discipline to the whole property industry. The guidelines and requirements laid down in the Act instilled public confidence. A client no longer needs to approach an estate agent with suspicion. He can now approach him with confidence and trust as his adviser and sometimes also as a friend.
With the advent of the Close Corporations Act of 1984, which became operative on 1 January 1985, one must accept that increasing numbers of people will make use of this system and establish close corporations in preference to companies because this system is simpler and also much cheaper. I also accept that many estate agents will make use of this system. The important fact is that estate agents are subject to the provision of the Estate Agents Act, whereas members and officials of close corporations acting as estate agents are not subject to these provisions as from 1 January 1985. The amendment in section 1 now provides for members and officials of Close Corporations trading as estate agents to be subject to the provisions of the Estate Agents Act, 1976. This is only logical. The rest of the amendments are consequential and we support the Bill.
Mr Speaker, I rise merely to say that we support this Bill, there is one little matter, however, to which the hon the Minister may be able to give me an answer. This legislation has been necessitated by the inception of Close Corporations. Naturally the Bill deals mainly with technical amendments. My problem, however, is that this Bill provides that the sale of an interest in a close corporation will in future be regarded as a matter falling within the confines of the normal activities relating to the property. Does this also mean, then, that an estate agent will be able to sell shares in an ordinary company as a part of the normal activities of his company? I should like the hon the Minister’s reply to that. Nevertheless, I support this Bill.
Mr Chairman, before I am guilty of verbosity and the dissemination of rhetorical misconceptions, I should also like to join the two previous hon members in supporting this Bill. The hon member for Langlaagte put an interesting question to the hon the Minister. We are all waiting for the answer because it will clarify other situations and facets. As this is consequential legislation, and effects consequential amendments as a result of shortcomings which arose as a result of the legislation on close corporations, the hon the Minister’s answer to this hon member may in turn reveal some shortcomings in the Companies Act; or a consequential amendment will again be required as a result of this legislation. That is why the hon the Minister’s reply to the hon member is going to be an interesting one.
In any case I think that this legislation is essential. For this reason I support the Bill.
Mr Chairman, we consider this Bill necessary and desirable, and we support it.
Mr Chairman, I thank the hon member for Pietermaritzburg South and the hon member for Algoa for their support of this measure. The hon member for Algoa mentioned that close corporations are an appropriate forum through which the estate agents can conduct their business. This is aside from the normal forms of organizing one’s commercial life.
It is interesting to note that since January this year only three of the close corporations that have been incorporated relate to estate agents. I find this rather surprising; but perhaps it is too early to judge trends at this stage. We have only had a month of registration and only about 400 close corporations have been incorporated. Other figures make interesting reading: Up to 31 January 1985, there were 6 584 principal estate agents registered, 9 384 employees, 100 attorneys’ employees registered as estate agents, 1 892 companies registered, 495 partnerships registered and 2 377 sole proprietorships, or one-man businesses. In a great many of those categories there are people who have not reregistered. It is interesting; one can almost tell the state of the market by the number of people who fail to register. One can, for example, look at the number of employees working for estate agencies. Of the 9 384 employees who were registered previously, 3 937 did not register again this year.
While I am busy with some of the statistics, it is also interesting to note that of the people from the various communities in our country who are registered as estate agents only 60 are Coloured and 10 Black. There is, therefore, an enormous backlog, or opportunity if one likes, in respect of these groups in this profession. In respect of employee members we see that only 180 Coloureds, 30 Blacks and 300 Indians are registered as such. The reason why I bring these figures to the attention of the House is that one wants to recognize the important work which is being done in the whole field of home-ownership by organizations such as “Home”, an offshoot of the Urban Foundation. “Home” is a section 21 utility company and it attempts to train estate agents to enter the profession so that, among other things, they can serve their communities. Where we are experiencing such a massive increase in home-ownership. This has also been given impetus by the sale of 500 000 houses, the project which was announced a few years ago and which is proceeding apace, particularly since much of the background work such as surveying has been done.
“Home” has agents in private practice who are trained by that organization. There is one on the West Rand and five in Port Elizabeth. “Home” also has four regional offices, situated on the West Rand, on the East Rand, in Sebokeng and in Port Elizabeth. They are currently offering a beginners’ course. They are upgrading their courses to bring them into line ultimately with the courses of the Estate Agents’ Board, from which they are exempt at the moment. They receive the same rates of commission as anybody else. I think there is an enormous opportunity in this regard. One of the big problems with private free enterprise, which we discuss so often in this House, is the creation of opportunities for all the people of this country. The whole question of entry is so important. In respect of some of the professions it is sometimes very difficult for people to enter who for some reason or another have been disadvantaged or have not had the necessary opportunity. It is therefore a good thing that organizations such as the Urban Foundation, through “Home”, open those portals so that people can enter this profession. For that reason I have raised this. I think they are busy with very laudable work. I should like to congratulate them, and I hope that they will proceed apace with what they are doing.
I now come to the question raised by the hon member for Langlaagte. I have received an answer from one of my officials present here.
*I shall first reply to the hon member and afterwards enlarge on this. The activities of an estate agent are normal if the assets of the company consist chiefly of land. It often happens, and happened even more frequently in the past, when there were advantages attached to the buying and selling of individual houses by the sale of shares in companies. The hon member will recall that people did this to save on transfer fees, because there were no such fees attached to the sale of shares. Later that loophole was closed. It was made expensive and is not actually profitable any more. It is true that many properties are owned by a juristic person that is a company. According to law that company may be sold, its assets of course chiefly being land. We also expect individuals to use close corporations in holding property, and that in terms of this amending Bill, the agent will, in such a case, be able to dispose of and trade those interests in a close corporation.
I thank all hon members for their support. I think it also speaks volumes for the fact that much of the background work was actually done in the Standing Committee.
Question agreed to.
Bill read a second time.
Certified fair copy of the Bill to be transmitted to the State President for his assent unless the House decides within three sitting days to refer the Bill to a committee.
Mr Speaker, I move:
The United Nations Organization’s Inter-Governmental Maritime Consultative Organization accepted a Convention known as the International Convention for Safe Containers at a conference on international container traffic in Geneva on 2 December 1972. The Republic of South Africa acceded to this Convention on 25 June 1983 and as a result thereof the supervisory functions accepted in terms of the Convention and the accompanying obligations of those persons involved in the use of containers must be embodied in appropriate legislation.
The reason why they must be embodied in legislation is that accession to the Convention, or the conclusion of a treaty, is not a legislative act but purely an executive act, and the provisions of an international deed do therefore not necessarily become part of the law of the Republic. Consequently, they must be expressly declared as part of the law of the country. International shipping transport, as well as internal commerce, with the exception of specialized freight transport as, for example, in the case of crude oil, today mostly make use of containers, and it has also become necessary for the Republic to regulate the use of such containers.
The Convention is attached to the Bill in the form of a Schedule and deals with the structural requirements to ensure safety in the handling, stacking and transportation of containers, and the provisions thereof are therefore of a technical nature.
†Owing to the technical nature of the Convention I do not intend discussing any of its provisions but would like to draw attention to the more important aspects of the Bill by which it is endeavoured to attain the objectives I have mentioned.
The first substantial provisions are found in clause 2 in which the Convention is in toto declared to be applicable in the Republic. The provisions of clause 2 also have the effect that subsequent amendments of or additions to the Convention which are adopted by the Republic, can be incorporated in the Act by means of an amendment of the schedule by proclamation by the State President, which proclamation is thereafter and within a prescribed period required to be tabled in the respective Houses of Parliament.
In subsection (1) of clause 3 the Minister is empowered to make regulations in order to give effect to any provision of the Convention. In terms thereof the Minister is furthermore authorized to prescribe fees and to provide for the recovery of any expenditure incurred in connection with the application of the Convention in the Republic.
Since the Bill relates to the international trade relations of the Republic and can have an effect on the Republic’s international image, clause 3 makes provision for all regulations promulgated by the Minister to be laid upon the Table in the respective Houses of Parliament within a specified time. Should, however, a regulation be disapproved by all three Houses of Parliament, such disapproval shall have the effect of annulling the regulation concerned as if such regulation has been repealed by a statute of Parliament. In such event the provisions of section 12(2) of the Interpretation Act, 1957, shall apply, which states that anything properly done or suffered in the meantime under the particular regulation till the moment of annulment, shall remain valid and of force and effect.
Mr Speaker, may I please put a question?
Mr Speaker, the hon the Minister has told us that the regulations would be discussed in Parliament. The position is not clear to me. The present Act only provides that the regulations must be laid upon the Table. I just want to ask the hon the Minister who effects the amendments to this Convention? Will it be this Parliament?
Mr Speaker, the Act makes provision that regulations made either by the State President or the Minister and published in the Gazette must be laid upon the Table in Parliament within a prescribed period.
Are they only laid upon the Table, or are they discussed as well?
If Parliament should decide to discuss and disapprove of those published regulations, then it can do so. They are then deemed to have been nullified by a resolution of Parliament. I think this legislation makes it clear that Parliament must in the final instance be able to enforce the regulations. I would suggest that further details with regard to this matter can be discussed in the debate in the separate Houses.
Second Reading Resumed
Mr Chairman, the Bill before the House is necessary to translate an international convention agreed to by the executive into the law of the country. This side of the House will consequently be supporting the Bill.
Mr Chairman, we should like to thank the hon members on the other side of the House for supporting this legislation. Containerization and the way in which cargo is transported at present is starting to play a role of ever-increasing importance in transportation in general. That is why it has been necessary to enter into agreements which also include international Conventions in order to make certain arrangements in regard to the transportation of cargo in containers.
As the last hon member has said, this legislation makes provision for the Convention that was entered into to be brought into line with Government policy, that it become a law of the country that is also enforceable. Provision is also made in this legislation for penalties to be imposed and for offenders to be prosecuted. This legislation also provides for an accused to be charged in a place within the jurisdiction of a court in the area where he happens to be or in any other court that proves convenient, amongst others also in the area where the offence was committed.
As this legislation is applicable to the Republic’s international trade, provision is also being made for the regulations contained in the legislation to be approved by Parliament. I know that the hon member for Langlaagte, whom I believe will be speaking after me, will perhaps have a problem because provision is made here for the State President to make changes to the Convention from time to time in order to bring it into line with the times in which we are living and also with international developments. The hon member for Langlaagte has, up to a point, agreed with the principle of the legislation, but—if I now remember correctly—he suddenly began to register objections to the rest of the measure, particularly with regard to insignificant technical points relating to the manner in which certain things can be done.
That is why I just want to emphasize that in regard to the regulations which can be made in accordance with this specific measure, they too would first of all have to be approved by Parliament. This consequently differs from the way in which regulations would otherwise be made, with cognizance simply being taken of this, without the necessity of prior approval by Parliament. I am simply anticipating what might be going on in the thoughts of the hon member for Langlaagte. [Interjections.] I just want him to realize that Parliament will in any case have to approve these regulations.
This legislation is specifically necessary to ensure that container transportation proceeds in an even more orderly manner. I trust that it will also make provision for the necessary measures to be introduced so that as few offences as possible are committed in this regard, particularly as containerization and container transportation can also involve very sensitive and even dangerous materials. Poisonous substances and various other dangerous materials can, for example, be transported in this way. I also believe that the manner in which these substances are transported makes it essential for these matters to be dealt with by way of legislation and regulations. I therefore gladly support this legislation.
Mr Chairman, quite contrary to the expectations of the hon member for Springs it is I, and not the hon member for Langlaagte, who now rise to take part briefly in this discussion. [Interjections.]
This measure is to a great extent a technical one; also an essential measure of course, in terms of which we, in our country, have to comply with any Convention that we are party to. The hon member for Springs noticed quite correctly, however, that we in this party have certain objections to specific portions of the legislation under discussion. I should like then to deal briefly with this.
Clause 2 of the Bill provides—and the hon Minister referred to this in his second reading speech—that any future amendment to the Convention would not be referred back to Parliament for approval. It will quite simply be effected by the State President by way of proclamation. Consequently any future amendment to that Convention can take place on the basis of executive action without the necessity of consulting Parliament. In this case, therefore, Parliament will no longer be acknowledged as part of the legislative machinery of the country. Our first objection is directed at this.
Other than that, this legislation only makes provision for the tabling of the relevant proclamation. No provision has been made in this measure, however, for Parliament to make any changes to it at all. Hon members would do well to go and read Clause 2 of the Bill again.
My strongest objection, however, is against the peculiar provision in clause 3. The hon member for Springs said a short while ago that the Minister can now make regulations in terms of this legislation. He also added that Parliament would have to approve those regulations. I should therefore like to advise the hon member in all humility to read the legislation more carefully. In no way does this legislation provide for Parliament to approve those regulations; on the contrary, exactly the opposite is provided. It provides that Parliament may disapprove of those regulations. This is followed up with the peculiar provision in clause 3(4) that a regulation can only be disapproved of by Parliament if all three Houses of Parliament disapprove of it. So, if it were not disapproved of by all three Houses of Parliament it would remain valid. Now what kind of peculiar legislation is this? In terms of the new Constitution which now applies, as I understand it, legislation in this country can only become law if all three Houses of Parliament approve it.
This is surely the case, and if a stalemate situation were to arise, the specific measure would be referred to the President’s Council for a final decision of course pending the State President’s pleasure.
Now, however, we have the complete opposite. The Minister now has the executive authority, the powers to make regulations. Then clause 3 of the legislation provides that the regulations have to be tabled in Parliament, while clause 3(4) provides that, if it is disapproved of by all three Houses of Parliament, the regulations cannot have the force of law. What would happen if two Houses came into conflict and the one House opposed those regulations and stated its disapproval, while the other House did nothing or expressed its approval. The Minister’s decision would then apply. This is quite a strange procedure and I am unable to give any explanation for it. We would very much like an explanation from the Minister. Consensus does not come into this; in fact, there is no question of consensus at all. A difference of opinion could exist amongst the three Houses, but the will of the two Houses can be thwarted. I should like to have an explanation from the Minister about this. It is for this reason that we cannot accept the legislation with its present provisions.
Mr Chairman, it is a pleasure for me to speak after the hon member for Barberton. He has, in my opinion, a technically correct view of the Bill before this House today, but he obviously has reservations, particularly in regard to clause 2, on the grounds of ideological convictions, or because the State President ostensibly has certain powers. I do not believe that his reservations are valid, and I shall deal with them during the course of my speech.
What are we really dealing with here? We are dealing here with nothing but a simple, practical piece of legislation, which seeks to bring South Africa into line with the practices and rules that apply generally and internationally to container transportation. We all know by now that at this juncture millions of containers are being conveyed across the oceans from one country to another, and also from one place to another in the same country. That is why it is essential—as this legislation seeks to do—that there be joint measures, negotiated by all the participating countries, to regulate and facilitate this traffic. It is, after all, essential that cognizance is taken of the need to ensure the safety of human life when handling and transporting containers. Besides, it would simply be irresponsible to neglect to identify this evident need and to take steps in regard to it. Firstly, the fact that the Government took the step of making this international Convention applicable to South Africa and, secondly, the fact that we are now applying the measures here by means of legislation, prove once again that we are being governed by responsible people. I want to point out that this is not a political measure at all. South Africa is not in this way being made subordinate to any other power, nor to any group of powers as embodied in the UN, for example. In fact, our country’s participation in this Convention is nothing less than a manifestation of our independence in the sphere of constitutional and international law, our self-sufficiency and our maturity. We entered freely into the inter-governmental arrangement, of our own accord, as willing participants and—most important of all—in our own interests. I suspect that the hon members of the CP just want to make political capital out of this situation, and they are fully entitled to do so. Because the Inter-Governmental Maritime Advisory Organization in charge of the control and administration of the convention, is a UN agency and because the UN is an organization with a bad reputation in South Africa, the hon members of the CP now want to create the impression that we are being prescribed to from abroad. All I have to say is that that is not the impression I get. [Interjections.]
What makes you say that?
Let us leave that point and then I will develop my argument further.
The fact is that this provision cannot be detrimental to anyone. What may well happen is that if all the amendments to this Convention, which are being negotiated internationally, have to be submitted to Parliament for approval, as seems to be the wish of these hon members, our reputation could be harmed in the international forums. It would have a negative effect when our representatives to an international forum in, say, a place like Geneva, take their places around a conference table to consider these technical matters with a view to the possible amendment of the Convention.
We are dealing here with people who know what it is all about, and if one reads the schedule one will see that the Convention is of a technical nature. In a situation where they then begin to consider it and, for example, they decide that due to technological development the time has now arrived for containers to be larger than the maximum stipulated by the Convention, our representatives would then have to say that they are unfortunately unable to adopt a final standpoint. Their participation in this regard would unfortunately not be binding because they would have to consult Parliament first.
It would really place our representatives to that international conference in a ridiculous situation and I am certain that the hon member for Barberton will concede that it would be very awkward for them. It would not be a very good reflection on South Africa or on the independence of South Africa’s participation in forums such as these. This is my approach in regard to clause 2.
Mr Chairman, I want to ask the hon member a question with reference to article 9 of the Convention. Detailed provisions are laid down about what has to be done if a Convention has to be amended. It also specifies that no amendment would be applicable to a participating member unless it were accepted by that member. How can this be reconciled with the hon member’s argument that our representatives would be placed in an embarrassing situation?
I shall gladly reply to the hon member’s question. As I understand it, the position is that when the representatives of any country sit down with the representatives of another country—those countries are participants in a Convention which already exists and has to be amended—those representatives who are experts in the business involved, go there vested with virtually the full authority of the Minister and the Department they represent, to take part in discussions with their colleagues from other countries not only in the interests of the entire international container situation, in this case, but also in the interests of South Africa. To state the exact procedure to be adopted when such Conventions are to be amended, is not necessary, it is not the done thing, and it is also not done in any Convention. That is why I cannot see any particular problem in this provision.
As for the provisions in respect of the regulations, the procedure, prescribed here in clause 3 for amending the regulations is in itself something out of the ordinary. It is somewhat unusual that a Minister may be required to submit regulations of a technical nature to the Parliament of the country for its approval, as is the case here, and to do so in terms of existing legislation promulgated by him. This is an extraordinary measure. In fact, I would say that it was not even necessary for the Minister and the Government to go to the length of writing these provisions into the legislation, but according to the explanatory memorandum we all received, the reason is simply that we would very much like to uphold our status as an international negotiator and participant in international agreements. That is why Parliament is also being afforded an opportunity of expressing an opinion on certain provisions which may possibly be contained in regulations, and might have given rise to misgivings among members of Parliament over their effects on our image abroad.
This is the explanation as I see it. Let me repeat that I believe it to be a great advance when such a procedure is written into legislation. I do not think that it was necessary to do this, but since it has now been taken up as an extraordinary measure, I feel that we should be grateful for the opportunity that we, as members of this Parliament have had to participate in the deliberations before final action is taken in regard to such regulations in the long term. That is why I find it easy to support this legislation as a sensible measure, and I do so gladly.
Mr Chairman, I do not think that there is much doubt about the necessity of having rules and regulations related to containers. These containers are largely objects that are carted on the decks and in the holds of ships. When they are in a heavy sea-way, they can be subjected to enormous battering. Similarly, when they are hoisted onto or off the decks, they are subjected to considerable stress and strain. The consideration of whether one should have rules and regulations in respect of these containers is, I believe, beyond question.
Quite obviously, the Bill itself contains a great number of technicalities. These are in the Bill and in the Schedule as well. I do not believe that most hon members of Parliament are really competent to be able to criticize the technicalities, because they are beyond their capacity. The position is that the State President has accepted this convention and it has to be approved by Parliament. We are therefore in the process of presumably doing just that.
In so far as amendments are concerned, I have no quarrel with the concept of their being advertised. I have no quarrel with the concept of the hon the Minister doing his thing, because it has to be tabled in Parliament and it has to be approved. I do, however, have a problem which is similar to that of the hon member for Barberton. This is that, in terms of our regulations, in respect of general affairs, it appears to me that under these circumstances, it would have to go to the President’s Council if there is not agreement by all three Houses. Although I do not believe in a situation like this one is likely to get this problem of non-agreement in the three Houses, yet there is a principle which seems to be involved here.
I am therefore perfectly happy to support the contents of the Bill, but I must record my objection to what I consider to be a deviation from our Rules of Procedure in respect of clause 34.
Mr Chairman, I should like to thank the hon members for their support. It has been emphasized by all the hon members that this legislation is necessary and is welcomed. Yet sudden and unexpected misgivings were expressed by the hon members of the CP in particular. These remarks surprised me because I was under the impression that this matter had already been discussed on the Standing Committee and that no amendment, improvement or alteration to this piece of legislation had been proposed.
The hon Minister should take the time to come and see what is happening there.
I want to recommend that the hon member for Langlaagte may as well make use of the Standing Committee to improve legislation, if he is of the opinion that improvements can be made. What I found strangest of all was the case of the hon member for Barberton, who is a lawyer. One would find it understandable if an uninformed person from another profession had to stand up here and make a nonsensical statement while speaking on aspects of legal technicalities. If a lawyer …
He is not a lawyer (regsgeleerde); he is a know-all (wetsgeleerde).
… a know-all, and in many respects not an incompetent know-all, stands up here and makes assertions which even a layman like me can sense are wrong, then one can surely be allowed to express one’s impatience.
Forget about your feelings.
Surely the hon member for Barberton knows that according to constitutional law, when the executive takes part in international conventions or agreements, it does so on behalf of the country it represents. In view of this it is, therefore, no more than right that the State President may not only authorize becoming a signatory to such a convention, but that he may also, on behalf of the country, accept or reject amendments to those agreements proposed by the Convention. Surely the hon member knows that there is nothing strange about this.
Secondly, there is also nothing new about the fact that Ministers may promulgate regulations under the authority conferred upon them by Parliament. There are various laws empowering Ministers to enact specific regulations without requiring that they be tabled in the House. Our object in this legislation is to keep the House informed by focussing attention on any amendments to these regulations made by the Minister which are promulgated according to the Act. However, it is not even a case of this principle being foreign to this House. It would have been sufficient even if the Minister did not first table the regulations. However, I want to draw the hon member’s attention to the fact that, in the few minutes available to us, we have been able to find at least one piece of legislation in which we find the same provisions repeated verbatim and I am referring to the International Health Regulations Act. In terms of section 3 of this Act the State President may promulgate regulations, and section 3(4) provides:
In other words, this not only makes provision that a regulation promulgated by the State President, in both Houses of Parliament—here reference is still made to the Senate—has to be laid upon the Table, but in section 3(5) a further provision is inserted, namely:
The provision then continues in the same words contained in this legislation.
The hon member ought definitely to know better; in fact he probably does know better. I therefore find it strange that he gets up and opposes the legislation with arguments of this nature. [Interjections.] I would rather react to the opening words of the hon member, namely that the legislation is clear, necessary and welcome. So it is not necessary for me to say anything further about the legislation other than to thank the hon members for their support.
Question agreed to (New Republic Party dissenting).
Bill read a second time.
Certified fair copy of the Bill to be transmitted to the State President for his assent unless the House decides within three sitting days to refer the Bill to a committee.
Mr Speaker, I move:
The Maintenance and Promotion of Competition Act, 1979 (Act 96 of 1979), came into operation on 1 January 1980, and minor amendments were made to the Act in 1980 and 1983. It has now become necessary to make further amendments to the Act in order to improve its practical application and to rectify certain matters which are not clear. Most of the amendments contemplated are of a technical nature, but it has also become necessary to effect a few other amendments which are aimed at eliminating certain impediments to the application of the Act.
I do not intend to discuss all the proposed amendments now, but merely want to elucidate the most important ones for hon members.
The Act provides, inter alia, that the Competition Board, which was appointed in terms of the Act, may investigate the acquiring of a controlling interest in any business or undertaking by another business or undertaking and that the Minister may take steps to declare such an acquisition illegal or to curtail the possible adverse effects of such an acquisition.
Two of the proposed amendments specifically concern acquisitions. In the first place, the Act does not at present explicitly provide that the acquisition of a part of the assets of an undertaking may be considered to be an acquisition. This may create problems because the authority in the Act to investigate and set aside acquisitions can be circumvented. The proposed amendment to the definitions of “controlling interest” and “acquisition” will place the power to investigate and take action against the acquisition of a part of the assets of an undertaking beyond all doubt.
In the second place, as the Act now reads, an acquisition is only considered to be such if it directly or indirectly restricts competition. But when assessing the implications of acquisitions, particularly proposed acquisitions, it is essential also to take note of the probable restrictions on competition which will or may result from an acquisition or proposed acquisition, although these do not yet exist. In the proposed new definition of “acquisition” the words “likely to have” have been inserted.
“Financial institution” and “co-operative society” are defined in section 1 of the present Act. Section 2(1) of the Act provides that the Act shall not be construed so as to prevent any co-operative society or agricultural control body from regulating the production or distribution of agricultural products which have not undergone a process of manufacture, while in section 16 of the Act, investigations and actions in terms of the Act are made subject to the concurrence or consent of the Minister of Finance in cases in which financial institutions are involved. The amending Bill proposes the deletion of both these sets of restrictions.
†As regards co-operative societies and control boards, I should point out that the existing restriction does not in any event curtail the Competitions Board’s advisory powers in terms of section 6 of the Act. Furthermore, as the Act is an enabling measure only, it does not and cannot be used to amend any other existing legislation or to take action in respect of anything done in terms of such other legislation. It is clear, therefore, that the so-called restriction in section 2(l)(c) of the present Act is unnecessary and does not serve any practical purpose.
However, as the Competitions Board from time to time deals with agricultural matters, it was considered in the best interest of all concerned to remove the uncertainty created by the existing stipulation and, furthermore, to make provision for the appointment of two new members to the Competitions Board in order to increase the Board’s agricultural expertise. The two new positions will be filled by the chairman of the National Marketing Council and another person to be nominated by the Minister of Agricultural Economics and of Water Affairs.
Section 16 of the principal Act places a very substantial limitation on the application of the present Act, which did not appear in its predecessor, the Regulation of Monopolistic Conditions Act, 1955.
Financial institutions form a very important part of the South African economic system. They are also increasingly becoming involved in the fields of industry and trade by means of acquisitions for the purposes of diversification and for the investment of funds flowing to these institutions, or profits generated by them.
Investigations conducted by the Competitions Board are very often of great urgency and almost always of a very confidential nature. The need to obtain the consent of the Minister of Finance has in practice proved to be an impediment and tends to delay investigations, as, owing to various factors it is not always possible for the Board to obtain such consent timeously.
However, the importance of financial institutions and the necessity of maintaining public confidence in them is fully realized and has to be provided for in a single integrated system of competition policy. The proposal as contained in the amending Bill is to remove the present restrictions and to make provision for the appointment to the Competitions Board of the Governor of the SA Reserve Bank, or someone nominated by him, as well as a further member to be nominated by the Minister of Finance. The Registrar of Financial Institutions is already an ex officio member of the Board. This should eliminate any possible speculations that the Board’s powers are to be extended unduly.
The proposals contained in the Amendment Bill should certainly increase the effectiveness of the present Act.
Second Reading resumed
Mr Chairman, when the Maintenance and Promotion of Competition Act was debated in 1979, Dr Zac de Beer supported it on behalf of this party. We supported the legislation at that time because we believed that the Act, judiciously applied, could only promote the ends of the free enterprise system to which, I believe, all hon members in the House subscribe. To achieve the objectives of the Act, however, it is necessary that the Government should be prepared to take steps to enforce its provisions. We on this side of the House are concerned about the fact that the Competition Board unfortunately do not have the manpower or facilities to investigate the numerous problems which present themselves in South Africa. One only has to look at the extent of its budget which is only R380 000 per annum, to realize how limited its scope actually is.
There are numerous situations in our economy where there are obviously cartel arrangements. We believe that these collusive arrangements act against the best interests of the free enterprise system and, obviously, many monopolistic situations as well.
It is very easy to talk in broad, vague terms on this subject and, in order to draw the attention of hon members of the House to what is actually happening, I should like to cite a specific example. In citing this example, I should like to make it clear to the hon Minister that in no way do I attach any blame to him or his Department regarding the events that I am going to mention, but I think it serves very clearly to illustrate the type of development which is rife in our economy.
I am sure all hon members will agree that in a closed economy it is very easy to gain control over or to influence downstream industries as long as one has some control over the source of the raw materials which the downstream industries need. It is then possible to influence them by means of differential discounts, cutting off supplies, restricting supplies and a host of other measures which can be taken. In South Africa such a situation has arisen in the supply of rolled steel products.
We only have two suppliers of these products in South Africa. These suppliers are Iscor and Haggie Rand through a company of theirs called Consolidated Wire Industries, and the Cape Gate Group. Therefore, the supply of these products in South Africa is controlled entirely by CWI and Cape Gate. Their activities, in turn, are controlled by an organization known as the RSPCC, the Rolled Steel Producers Co-ordinating Council, the only two members of which are CWI and Cape Gate.
Until the beginning of 1984, there was a thorn in the flesh of this cartel. It was a company in Zimbabwe, known as Lancashire Steel, which had a contract to export a thousand tons of rolled steel products to South Africa per month. They traditionally supplied a number of small steel convertors. For example, in the Western Cape they supplied people converting steel and making wire mesh, nails and a host of other products.
I have here before me—and I shall submit it to the hon Minister when I have finished speaking—a complete chronology of events that have taken place since 1978 relating to the efforts of Iscor/Haggie Rand and Cape Gate to stop Lancashire Steel exports from Zimbabwe to South Africa. Although these steel imports have only been a small percentage of the total, they have resulted in a measure of competition with the local industry. There have, for example, been applications to the Board of Trade and Industries for protection. There have been attempts to purchase Lancashire Steel and there have even been threats of embargoes and other actions of this nature. Up to the end of 1984 all these efforts were to no avail. In 1984 we saw a new entrant to the scene under the name of Zisco, namely the Zimbabwe Steel Corporation. Most of the negotiations on behalf of Zisco were done by their chief executive, Mr Kurt Kuhn, who was seconded to Zisco from Hoechst Alpine, which is an Austrian company supplying plant and equipment to this steel industry. Zisco negotiated and took over Lancashire Steel in Zimbabwe. Within a few weeks of the takeover all the steel exports of Lancashire Steel were rerouted through RSPCC, the cartel formed by Iscor/Haggie Rand and Cape Gate. In return for this—and I know it is a serious allegation—it is alleged that Mr Kurt Kuhn routed imports into South Africa through RSPCC. This was instrumental in Hoechst Alpine entering into a contract with Iscor to supply an R85 million two-strand continuous casting plant.
These are serious allegations to make in the House and I would not make them unless I had some evidence to support them. I would like to quote extracts from two documents I have in my possession. I will also send the hon the Minister copies of these extracts after I sit down.
The first document is a letter from the chairman of Lancashire Steel to the Minister *of Industry in Harare. I want to quote two paragraphs from this letter. The first reads as follows:
The letter goes on:
The other document I would like to quote to the House is an agreement entered into shortly after the takeover of Lancashire Steel by Zisco. It is an agreement between Consolidated Wire Industries, Sharon Wire Manufacturers, which is a subsidiary of Cape Gate, and Lancashire Steel. I want to quote two paragraphs from this agreement, as follows:
Clause 4 of the agreement reads as follows:
It then goes on to mention all the independent and self-governing states in South Africa. It then goes on to say:
It even goes on further to say:
If ever I have read an agreement which, as far as I can see, is against the objective of the Act and which restricts free competition, then of course I think this agreement is one.
There are a number of questions which arise out of this. Hopefully these questions can be answered by the Competition Board to which I hope this has been referred. I understand that certain elements have been referred to it already. For example, did Iscor recently negotiate this agreement effectively handing over Lancashire Steel and Zimbabwe Exports to its subsidiary Consolidated Wire Industries and the Cape Gate group? Have smaller independent wire converters made an official complaint to the Competition Board and has the board already submitted a report? Did Iscor negotiate with the former Austrian expatriate executive, whom I mentioned just now, Mr Kurt Kuhn, for the handover of Lancashire Steel exports to the wire cartel, RSPCC? A further question that arises out of this is of course: Did Iscor negotiate with the same Mr Kuhn an R85 million contract in respect of the provision of the two strand continuous casting plant, which I mentioned earlier on in my speech today?
I believe that these are all important questions which have to be answered and, as I have already said, this is a classic example of a restrictive practice as defined in the definitions in the Act. What makes it even worse, is that we have a semi-State organization such as Iscor being party to contravening an Act passed by this House. I cite this as an example because, as I mentioned earlier, it is easy to talk in generalities but it is far easier to draw the attention of members to what is actually going on by homing in on one example.
There are, of course, numerous other examples which I can briefly mention. For example, we welcome the fact that the Minister has referred the question of the cement industry to the Competition Board. In the agricultural sector we think there is a strong case for referring the balanced feeds industry and the fertilizer industry to the Competition Board as well. We believe that our economy is riddled with organizations which just by their very nature, by their very names, give cause for the gravest suspicion. There is hardly any group of manufacturers or traders in South Africa who do not have some organization to which they belong. These organizations often exist with the purpose of fixing prices, dividing up markets and enforcing other restrictive trade practices. One just has to read the newspapers. Hardly a day goes by when one does not see a statement from some body—the Tyre Retreaders Manufacturers’ Association or the Hoteliers Association—and it goes on and on and on. As I have said, the very nature of their names gives cause for the gravest suspicion.
I am not making a plea today that this Competition Board should be allowed randomly to run riot through the economy. They should obviously establish a very clear set of guidelines indicating the way in which they operate, so that people know where they stand. Nobody in business or commerce likes to be uncertain about his position. Industrial concentration per se is not necessarily a bad thing but it obviously deserves to be closely monitored.
Getting to the Bill which we have before us today, I want to express our support for the amendments in the Bill. It is obviously necessary to widen the definition of what a controlling interest is and also to widen the definition of what an acquisition is, because without this it is possible for people to circumvent the provisions of the Act.
A further provision in the Bill which we of this party support is the provision in terms of which control boards, co-operative societies and financial institutions will now also fall under the provisions of the Act. We think that what is sauce for the goose is also sauce for the gander. All organizations are now treated in a similar fashion. So we support this.
In conclusion, in expressing our support for the Bill, I want to say that we hope that the hon the Minister will somehow bolster the effectiveness of the Competition Board. We think there are competent people there. It is just that they are spread far too thinly. We hope that the hon the Minister will be able to take stronger steps to see that the provisions of the Act are implemented in South Africa. It can only be to the benefit of the economy and of us all.
Mr Chairman, I do not want to confine myself to the example quoted by the hon member for Pietermaritzburg South. But first I want to refer to a few of his remarks. In general I thank him for the support he and his party are giving to this amending Bill. I want to agree with him that the Competition Board should, in any case, be in a position to act more effectively. He also referred to the fact that he believed that there were too few officials available to do the work. I believe this is the case. On the other hand there is criticism that the Public Service is becoming larger and more expensive by the day. In this regard I feel one must choose the most effective course.
We in South Africa pride ourselves on the fact that we have a democratic structure and operate in a capitalistic system. This is a fact and I think it is something to be proud of because, if we try hard, it at least brings us into line with most countries in the world and specifically the Western World. It is a fact that even in the communist countries there are small capitalists. Even in the most socialistic systems the basis is still capitalism.
We believe that the system within which we operate is the best system. I do not want to try to spell out all the advantages. Perhaps one could summarize this by saying that the capitalistic system is a system by means of which as many people as possible must own as much as possible and must be given the opportunity to increase their number of possessions in the course of time. I believe this leads not only to stability in the business sphere, but also in the political sphere and more specifically in our country. It is a well-known fact that a man who owns something, protects it and is usually not interested in destroying or damaging another man’s possessions. We say we must encourage every man to own something, even if it is only a plot of ground or a bicycle. We believe that in those circumstances he will make a contribution to the development and building up of the community. But I believe that on the other hand it is in fact the duty of the community to protect him as an individual. I am convinced that in our system and among the various racial groups and classes in South Africa, it is clearly understood that there will always be inequality. One man is simply cleverer than another, one woman is prettier than another, and one person owns more than another does. This is a fact.
The hon member for Langlaagte agrees. But I do not know whether he is now talking about women or possessions. Because we believe in this system, and because we believe that we must protect the little man, we are introducing this amending Bill so that the little man will not in fact be pushed out.
The existing Maintenance and Promotion of Competition Act is a good thing, but it has too little potency. That is the reason for these amendments. Now we must also admit to one another that in actual fact the Republic of South Africa has a small economy. Because we have a small economy, we must take care not to view everything from an economic point of view, and want to grab everything in the process, but we must also consider the population structure in South Africa so that in the end we can maintain an orderly society.
We must also admit to one another that harmful practices already exist, and that quite a number of them are fairly undesirable to say the least. For that reason I feel that every right-minded person must support this amending Bill. But hon members will allow me to issue a word of warning. Years ago there was a new kind of activity in the United States of America. They expected to find a communist behind every bush, and they did not always do so. Now I must issue a warning that because South Africa has a small economy, beneficial power concentration may in fact take place. I want to describe this as “a benevolent monopoly”. I think we must take care—in the context of our general economy—not to condemn a monopoly, or whatever it may be, per se. [Interjections.]
As an ordinary human being I must admit that I find it difficult to find anything beneficial in some of the cartels which exist. I wish someone would give me a good definition of a benevolent cartel. [Interjections.]
The hon member for Pietermaritzburg South also referred to matters in the agricultural sector. He referred to fertilisers. There are others as well, for example, insurance companies. But we do not want to make this list too long because then I will also get bogged down in details. But one must look into this kind of thing. I specifically want to issue a word of warning—this hon member also referred to this—in respect of marketing councils or control boards, and co-operatives. It is a fact that what is good enough for one must be good enough for the other. I believe there can be a harmful co-operative, but I have never seen one.
As is now contemplated in clause 1, co-operatives and control boards or marketing councils are also being included in the Act. But I want to submit that we should not erode and destroy simply by way of definition. On the other hand, one readily admits that the co-operatives and the marketing councils are not without their faults. But if we want to start talking, we must also differentiate, I do not want to concentrate on a lot of them, but will only mention two, about which I know a little, namely the Citrus Board and the Deciduous Fruit Board. If we want to destroy them, because they are such large organizations and because they are basically involved in single-channel marketing, we are going to harm the consumer in South Africa. I can assure hon members of that. We can destroy and erode the co-operatives by way of definition—and I know there are hon members … The hon member for Bezuidenhout is staring at me, and I know he does not merely dislike co-operatives; he hates them …
No, that is not true.
But he cannot simply destroy them for that reason. If we are going tamper with the co-operatives in this country, we are going to tamper with the heart of agriculture in South Africa. The Marketing Act and the Co-operatives Act are two of the cornerstones of agriculture in South Africa. In the first place I believe that agriculture cannot afford our destroying these organizations by way of definition; and, when all is said and done, the consumer in South Africa can afford it least of all. After all; agriculture is unique. I think that at this stage we have learnt enough from what happened in the recent past in only one important agriculture industry, namely the maize industry. This has also happened in so many other industries in these drought conditions we have been experiencing.
Let us consequently agree with one another that we shall fight what is undesirable with might and main. Let us do so in the agricultural sector as well. We need not be afraid or ashamed to do so. My plea is that we will always remember that these things are founded in an industry which is unique.
Allow me to refer to clause 3, which deals with the composition of the board. In terms of this the Minister of Agricultural Economics and of Water Affairs will appoint a member. I would like to accept—and I believe that this will be the case while this Government is in power—that the hon the Minister will consult the South African Agricultural Union so that the right man will be appointed. I must be quite honest here: personally I would prefer to see this written into the legislation. But I accept the bona fides. We on this side of the House are convinced that the hon the Minister will in fact do it this way.
We have now discussed the Marketing Act, marketing councils and the Co-operatives Act and co-operatives as they operate in South Africa today. I want to make an appeal and say that when we investigate these matters, we should not in the final instance throw out the baby with the bathwater.
Mr Chairman, it is a pleasure for me to speak after the hon member for Wellington. I listened to his plea on behalf of agriculture. Of course, there are a few interesting amendments in the legislation which indirectly affect agriculture.
It is now precisely five years since the principal Act and the Competition Board came into operation. One must congratulate the hon the Minister on coming to this House now with new proposals to improve the Act. We are living in a very dynamic world. We find that economic processes, and the milieu in which they take place, are constantly changing. For that reason legislation dealing with the maintenance and promotion of competition, and consequently also with the combatting of undesirable practices and structural deficiencies must also change continually. We are not living in a static world. We cannot have laws on the Statute Book which have no bearing on the economic environment.
The present Act, Act 96 of 1979, resulted from recommendations by the commission of enquiry which was appointed in 1975 and which published its report in 1977. Earlier on the hon member for Pietermaritzburg South said that the aim of the legislation must be made clearer, but I do not think this is necessary. The aim of the legislation is already quite clear, namely to provide for the maintenance and promotion of competition in the economy, for the prevention and control of restrictive practices and the acquisition of controlling interests in businesses and undertakings, and for matters connected therewith. I do not think one can have a clearer definition of the aim of the Act.
If one looks at the proposed amendments to the Act—there are also a few technical alterations—I think one of the most important is the repeal of section 16 of the principal Act. This removes the impediment the Competition Board and the Minister of Economic Affairs initially experienced. This section provided that the Minister of Economic Affairs had to obtain the consent of the Minister of Finance when he wanted to undertake an investigation, in terms of section 6, which affected financial institutions.
The second important change is the deletion of paragraph (c) of section 2(1) of the principal Act. This is the paragraph in the principal Act which applies to co-operative societies and agricultural control boards. The paragraph that is being repealed here stipulates that this legislation cannot interfere in the activities of the Marketing Board as far as the production and distribution of unprocessed agricultural products is concerned. Consequently this legislation applies to processed agricultural products and any other commodity. All that is now being repealed is the part which applies to unprocessed agricultural products. I cannot imagine that the Minister of Trade and Industry will order an investigation in terms of section 6 which may be in conflict with the Marketing Act. I almost want to say that the Marketing Act ranks somewhat higher in seniority than this legislation. We must also bear in mind that this is not an enabling measure. It does not contain any prohibition per se. Consequently there must first be an enquiry in terms of section 6, after which the Minister of Trade and Industry can make a recommendation.
By means of these two amendments this Bill is now introducing protective aspects through the changes in the composition of the board. I shall return to that aspect later. It is very interesting to note that this consent the Minister of Finance must give for an investigation in terms of section 6 did not exist in terms of Act No 24 of 1955. The commission of inquiry did not recommend something of the sort either. But financial institutions feared that the new Competition Board, which is now five years old, would investigate financial institutions and that this could be to their disadvantage.
If one looks at the history of this board one can only speak with praise of its actions in regard to very sensitive take-overs and mergers. Consequently, I believe that the fear harboured by financial institutions, and the Minister of Finance, was unfounded. We can consequently see why section 16 had to be deleted.
But there is also another aspect involved here. If one must obtain the consent of the Minister of Finance, will his officials allow an investigation to be undertaken if they may be indirectly involved in certain malpractices? This is almost like the police having to ask the permission of a sheep slaughterer to investigate whether a sheep has in fact been stolen and slaughtered. In the composition of the board the financial institutions and their finances are in fact protected. After all, they are represented by two members, viz the Registrar of Financial Institutions and the Governor of the SA Reserve Bank, as is in fact proposed in the measure concerned. I believe these two people are really conversant with this topic.
We must also bear in mind—as I have in fact already mentioned—that we find ourselves in a very dynamic environment in South Africa. We must also remember that nowadays our financial institutions play a very big part in our industrial development. Of course, one would not simply like to make the wild allegation that many of the take-overs which took place were to our disadvantage. But I do not believe we shall find a branch of industry today in which a bank or another financial institution is not involved. Consequently this means that if we were to indemnify these financial institutions and their activities against investigations-— were to say that they may not be investigated—there would actually be very little left for the Competition Board to investigate.
Then of course there is also the question with regard to unprocessed agricultural products. As I have already indicated, processed products are in fact covered by the legislation under discussion. But many interested groups are under the impression—I do not want to call it a misapprehension—that the Competition Board has no right to investigate unprocessed or processed agricultural products in the trade. For that reason I feel that it is better that this specific section be deleted. But in order to adjust the situation again, provision is made for two members to serve on the Competition Board, one of whom is a representative of the Minister of Agricultural Economics. Because co-operatives, for example, are also frequently affected in this regard, if possible, one would like this member to have a good knowledge of the co-operative system in South Africa. Then there is also the chairman of the Marketing Council. It is clear that, as far as agriculture is concerned, the best people are now being involved here.
I should now like to refer to another matter. There is also an amendment involved here which deals with the matter of a representative of the consumer public, who must also serve on the board. A unanimous decision was taken on this by the relevant standing committee. But I feel we must be careful when we consider the consumer to be a specialist. We are all consumers. In the USA, for example, it was found that people got completely carried away about the entire concept of “consumerism”. We are acquainted with the case of Nader in the USA, who did good work in this respect, but who also caused problems.
A final aspect I want to point out is the following. It is something we shall have to look into again in future, namely the co-ordinating of our competition policy with that of the independent national states. Certain practices may be quite legal in Babalegi or in Umtata, whereas the same practices are totally impermissible in the Republic. This should not happen, because these are things which could cause us problems in the course of time. But as it happens this does not affect the Bill under discussion. I am merely mentioning it because I believe that we shall have to give attention to this in future.
Nevertheless, I support this statutory amendment.
Mr Chairman, it is perhaps not altogether advisable to compliment someone on two consecutive speeches. In this case, however, it was and is quite justified. The hon member for Waterkloof made an exceptionally good speech. I believe that the crux of what he said comes down to the fact, as he put it, that it was really essential for us to pay renewed attention to banks and other financial institutions, as well as their role in the country.
The Bill under discussion provides for the Competition Board to investigate the acquisition of a controlling interest in a business or undertaking through another business or undertaking and for the Minister concerned also to take steps to declare such acquisition illegal or to restrict its possible adverse effects. At the moment the principal Act does not expressly provide for the acquisition of a portion of the assets of an undertaking to be regarded as an actual acquisition. In consequence problems may arise as the authorization for investigating such acquisitions as contained in the existing Act may be circumvented.
The exact definition of a controlling interest and what is meant by acquisition should be stated beyond all doubt.
†The eighth report by the Competition Board deals with the investigation by that Board into the soft-drink industry. That particular report, I believe, makes some really worthwhile reading matter. If one really wants to know what Mafia practices are all about one should investigate the soft-drink industry. Over the years it has become completely beyond the reach of the Board really to control the activities of these people. In the first instance, it is impossible to control these activities with existing legislation. Furthermore, a much wider net is needed to control the activities of these people. In a country like ours with its relatively small economically active population I think it is shocking to find predatory pricing to prevent other people from entering certain fields. In my opinion this is a shocking state of affairs.
If one looks only at the practices of the Coca Cola company in a place like Soweto, one realizes that almost twice as many inspectors are needed to control the activities of such people. Let us look further at Star peanuts and the company’s losses in the past few years. One finds today that its product is being used by the Airways, the Railways and other organizations. After all the competition there was in the field of peanuts, one now suddenly finds the company represented on boards everywhere. Today peanuts cannot even be bought in big quantities on the open market in this country. If one compares the restrictive practices of Anglo American and other big corporations with those of smaller businesses, I maintain that there is far more danger in the latter field. I want to warn Coca Cola and other producers of soft-drinks, those mongers of sweet cold-drinks, that in South Africa, a country of fruit, 90% of cold-drinks that are being sold consist of water and sugar only, and that as a result the health of this nation is deteriorating. The products of these companies sell so well purely and simply because they have more money to advertise, but their products are not half as good as those of others. In future we shall have to impose taxes on these companies, whether it be Coca Cola, Suncrush or Pepsi Cola, to bring the prices down. Thereafter, pure fruit drinks can be subsidized. We shall have to look into this field, because the competition is completely unbalanced. The poor farmers, and people like Ceres—although calling them by name is perhaps wrong—have to buy the fruit and crush it themselves, and it entails a lot of work for them to bring their product onto the market. It is then disheartening for them to find that four or five people succeed in running a multi-million business by merely putting sugared water into bottles, to which a little colouring is added.
We are importing fruit drinks from Brazil and other countries. Why? Is it not true that South Africa is called the country of sun and fresh fruit? Why are we doing these things? The Competition Board would do well to attend not only to the big companies, but also to the smaller companies and how they are restricted by the practices of the bigger ones. Sir, we support the Bill.
Mr Chairman, the hon member for Langlaagte said a great deal with which one could agree. For example, I agree with his remark that, as is customary, the hon member for Waterkloof made a very fine speech. I should like to add the name of my colleague, the hon member for Wellington, who made a very good speech, particularly with regard to the question of control against the background of competition. [Interjections.] As regards the question of cool-drinks, which the hon member for Langlaagte raised, I want to tell him that in my constituency there are very good products one could add if need be to improve the quality of the product he was speaking of, and perhaps also to make it healthier. [Interjections.] I am of the opinion that in respect of the whole question of competition we must be careful not simply to dismiss everything that is large.
I think there are many cases in trade and industry in South Africa and throughout the world today where a company or organization has become very large due to the fact that it does very good business, produces a very good product and markets and advertises it well. One cannot dismiss it as being wrong purely on those grounds.
I should very much like to associate myself with the theme the hon member for Wellington raised and to which the hon member for Waterkloof also referred. It is the principle that is not really a new one, viz that the Competition Board can in future give specific attention to control, and specifically to co-operatives. I wish to reiterate that it is not really anything new because it can in fact be done even in terms of the present Act and under the present circumstances. The procedure with regard to such investigations is simply being facilitated and improved now.
It is very interesting that at this very moment there is an investigation in progress by the Competition Board in respect of a certain aspect which really falls under agriculture. It is one of the secondary industries of agriculture, to which the hon member for Waterkloof referred.
I welcome the opportunity of saying in this House today that control in agriculture and the whole concept of co-operatives is very often the target of unfair and unnecessary criticism. I think it is essential that since these amendments are being effected to facilitate the procedure, it should be said at the same time that there is absolutely nothing wrong with the principle of control in agriculture and with the principle of co-operatives as an extension of the farmer. I welcome the forum this House and this legislation is affording me today to say, in association with my hon colleagues who participated in the debate before me, that this fact is pertinently emphasized.
It is probably true that in practice errors are sometimes made in implementing control and the way in which some co-operatives are run. I want to say today that I think there are co-operatives in our country that have abused their position and have ultimately done things for which they were not established in the first instance, but one can find no fault with the principle.
I welcome the amendments. I welcome the restructuring of the board, to which the hon member for Waterkloof referred. In that way people who have to make the decisions on the Competition Board, people who have inside knowledge of the whole situation, are now being brought in.
I should also like to make this point: I do not think control or co-operatives have anything to hide. I repeat: There is really nothing to hide as regards the principle of control. I think the fact that it will be easier for the Competition Board to give attention to control and processing co-operatives provides a forum in which to eliminate many misrepresentations and misconceptions about this whole matter.
Let us say this to one another: I wonder whether there is better proof of the success of control in South Africa than the very fact that notwithstanding an extremely erratic rainfall, a very small percentage of really high potential soil and large distances which often separate production and consumption, we in South Africa are self-sufficient in respect of food production, with the occasional exception, as has just happened in the case of maize. To me it is even more important that South Africa is one of only five or six countries in the world that is a gross exporter of food. What better proof is there that control has succeeded in South Africa and has a place in the future?
I do not know which of the hon members—I do not want to mention their names, since they will feel that I think they are a little older—recall what the situation was in South Africa—specifically in agriculture— before control was implemented in the middle of the ’thirties. I cannot remember it, but I went and looked it up. The hon members will realize what chaotic conditions prevailed in South Africa in respect of production, processing and consumption. Control has brought about a tremendously positive change. This applies to all the sectors: The producer, the processor, but particularly also the consumer in South Africa.
I welcome the fact that the Government has taken the bull by the horns and wants to tackle the whole question of monopolies in all fields. This also applies to the public sector. All departments and all control boards will be investigated. The world is changing and things are no longer what they were 10 or 20 years ago. It is therefore a good thing that all aspects of the community be scrutinized constantly.
I am concerned that organized commerce and industry often have a slightly erroneous outlook on matters, particularly in respect of control and orderly marketing. I have here with me a memorandum of Assocom. It was drawn up a month ago and deals with a certain investigation into control that is being carried out at present. I quote:
The memorandum goes on to say:
That is the crux of the whole matter. However, I am afraid that there could be over-reaction. What is control really about? In the first and last instance it concerns orderly marketing. As the hon member for Wellington quite rightly said, care must be taken that the baby is not thrown out with the bath water, or that the neck of the goose that lays the golden eggs is not wrung.
The marketing system is often criticized for being in conflict with the free market system. I think it would be a very good thing if in this debate on the extension of the rights and powers of the Competition Board we tell one another that the system of control is nothing but the extension of the free market system.
So often there are vehement attacks on control. However, those attacks are mainly born of ignorance. They sometimes come from sectors that tell one another that they could do much better if there was no control. Worst of all, I think they are right. They would probably do much better without control. They would do much better in respect of their own profits, but that would be at the expense of the consumer. Due to the tremendous fuss we so often make about the free market system, the consumer has already been handed over to that free market system.
Orderly marketing does in fact try to maintain a healthy balance between the free market system on the one hand, and orderly marketing on the other, by providing facilities for people. What are the objectives of orderly marketing and those of the free market system? The free market system tries to negotiate the best price for the producers. Surely that is precisely what orderly marketing also tries to do for the producer. What is another objective of the free market system? It tries to make the final product available to the consumer as conveniently as possible and at the most reasonable price. After all, that is precisely what orderly marketing also tries to do.
I know of no country in the world where control is not implemented, particularly in respect of agriculture. Take a country like America. Even there control is implemented by withdrawing fields from production, and so on.
What, then, is really the problem? What are the misconceptions and misrepresentations in respect of control? What are people complaining about? I want to mention five points in this regard, and even add a sixth. Firstly, people so easily say that the State’s money is being wasted on control. Secondly, they say that control boards are not composed in a democratic way. These are aspects the Competition Board could go into. In the third instance, it is claimed that subsidies are paid to the producers. Fourthly, they say: We do not need control; we in South Africa will always be able to produce sufficient food. In the fifth place, it is often stated that there are too many people working in the agricultural control sector.
I do not wish to forestall the Competition Board, but in my opinion all five statements are completely incorrect, and I briefly want to supply answers to them. There are 22 control boards, and each board determines its own levy the producer has to pay, since they are producer boards. Let us take the Wheat Board as an example. Every farmer has to hand over a rand for the control campaign for one ton of wheat produced by him, which costs R300. It therefore does not cost the State anything; the producer pays for it. Ultimately control in respect of the final product costs a fraction of a cent.
Is it deducted from the producer?
It is deducted from the producer. [Interjections.]
Another cause for concern is that the control boards are not composed democratically. However, I can assure hon members that every board is elected absolutely democratically in terms of the Marketing Act and in terms of each scheme, but we must bear in mind that they are producer boards. The majority of the members of those boards are representatives of the producers, but there are also other representatives. [Interjections.]
The subsidies are not paid to the producer, but to the consumer, and there are many examples of where subsidies allow the consumer to obtain the final product more cheaply.
Another statement that is made is that we in South Africa will always have sufficient food, but in this regard I just want to refer to one example. What has happened in the rest of Africa? In many countries in Africa there was a degree of control under the colonial system but that control was abolished when colonialism ended. What is the situation in the rest of Africa today as far as the provision of food is concerned? I need not spell it out to hon members. Control therefore plays a substantial role in seeing to it that we in South Africa are self-sufficient as far as food is concerned.
Let me furnish the figures with regard to the number of people on control boards. There are 22 control boards, and 2 500 people are employed by them. They handle a turnover of between R3 billion and R4 billion. I would therefore welcome it if the Competition Board would look at these aspects very pertinently, in view of the extended powers that it is now being granted. I welcome the amendments being effected to the Act, since I believe that this will prove to all our people that control could be a tremendous asset to the country if it is implemented correctly.
Mr Chairman, it is not a privilege for me to speak after such good speakers, since once they have made their speeches, there is very little left to say. One almost feels like the Biblical dog that has to be satisfied with the crumbs from the table. It is significant that of the four speakers on the NP side who spoke on this Bill, three are farmers. This is a very clear indication that the Maintenance and Promotion of Competition Act deals largely with farming matters, and will have a great deal to do with them in the future as well.
In South Africa we have a dual problem. We have foreign exchange control so that large companies cannot take money out of the country. They have to keep their money in the country. What else are they to do with it other than to purchase other businesses and become increasingly larger? That is one part of our problem.
There is another side to the problem. If one looks at a country like West Germany one sees that 60% of the gross national industrial product is produced by small business undertakings that employ fewer than 15 people. In Japan it is as much as 80%. In South Africa it is not even 20%. This summarizes the dilemma of our country in a nutshell. That is why there is a Competition Board to try to ensure that—as a previous hon speaker rightly said—we get more people to be active in the economy.
I want to confine myself in this discussion specifically to the composition of the Competition Board. I want to point out that this board is composed, on the one hand, of people who are there by virtue of their posts—such as, for example, the Registrar of Financial Institutions and the Governor of the Reserve Bank—and, on the other hand, of people who are there by virtue of their particular ability, knowledge or experience in their specific fields. It is only the two members who are appointed by the Minister of Finance and the Minister of Trade and Industry who are not expected to have any specific appropriate knowledge or experience. My request today is that a convention be developed in terms of which it will be ensured that these two categories of appointment will have specific appropriate skills or specific knowledge. They must therefore have appropriate experience or skills.
If one looks at the situation where a Minister can appoint any person, one finds that the two Ministers can also appoint two officials. This would mean that this Competition Board could at most consist of six officials and only two people who can be appointed from the private sector by the Minister of Trade and Industry. In my opinion, this does not make for a very healthy situation, and I should like to say why. The time will come when the board will have to investigate the activities of the Government in the economy with a view to monopolistic conditions. The possibility exists that the majority of members on the board will be officials. On the other hand, however, a person can be appointed to the board without having the necessary knowledge or the appropriate experience in that specific field. This will mean that a person who knows nothing, is not interested in anything and who is just a burden to the board can serve on the board. I therefore ask the hon the Minister, in association with his colleagues, the hon the Minister of Finance and the hon the Minister of Agricultural Economics and of Water Affairs, to see to it that a convention is established with regard to the requirements set for people who, as members of the board, are appointed as their various nominations. The Minister of Finance and the Minister of Agricultural Economy can come to an agreement on that score. As regards appointments by the Minister of Agricultural Economy, agricultural legislation already exists in which it is provided that the person appointed by him only be appointed after consultation with the SA Agricultural Union. The SA Agricultural Union is regarded as the representative body of the South African farming community. However, there are three factors against the SA Agricultural Union being regarded as the nominated body that has to make recommendations to the Minister regarding appointments. During the discussion of subsection 3(g) in the Standing Committee, it was felt that there should be a representative on the board who is familiar with consumer affairs and that the nominating body should be the Consumer Council. However, the problem was raised that a body like the SA Consumer Council could be dissolved and that this could make recommendations for appointment difficult. Secondly, the recent trend has been that autonomous speciality organizations that are only affiliated to the SA Agricultural Union are established. This could mean that the SAAU as an autonomous body may not be as representative of the agricultural sector in the future as it is at present. The third factor counting against a specific designation by the SAAU is that as more and more speciality organizations are established these organizations will be able to exercise increasing pressure on the Minister to appoint someone from their ranks to the board. If one could obtain a definition of the person the hon the Minister can appoint to the board from the agricultural sector, he would be relieved of this pressure. It would also relieve him of the controversy, discord and politicking with regard to this matter.
Whilst the present Ministers of Trade and Industry and of Finance and of Agricultural Economy hold their portfolios there is no need to set specific conditions with regard to the appointment of people to the board, but long after none of us is here any longer the legislation will still be on the Statute Book and we do not know what the situation will be then with regard to the Ministers concerned. I am of the opinion that it is in the interests of the South African farming community that the convention be established that someone with the necessary knowledge and/or experience of co-operative affairs be nominated for appointment as a member of the board by the Minister of Agricultural Economy. My motivation is based on the following facts: At present there are 262 agricultural co-operatives in South Africa. These co-operatives have a membership of 293 000. This means that if one were to assume that there are 70 000 farmers in the country, each farmer would belong to an average of 3 or 4 different co-operatives. In contrast, the South African Agricultural Union has 43 000 members, whilst the maize speciality organization has only 4 500 members. It therefore appears that the co-operatives, as a real common factor, are much more representative of the farming community than Nampo or the South African Agricultural Union.
Piet, old chap, you must silence him.
Mr Chairman, it is very clear to me that this hon friend who has just spoken has a great deal more experience on these benches than I have, but he knows a great deal less about farming affairs than I do. [Interjections.]
Why are you not the Minister of Agriculture then?
For the same reason that the hon member is not the Minister of Finance!
Mr Chairman, another point in support of my argument is the fact that agricultural cooperatives are recognized by the various branches of organized agriculture as being the business arm of agriculture. As such, these people are closely involved in the consumer aspect of the farming community, since almost 90% of agricultural production and agricultural requirements are provided or financed by co-operatives. It is therefore essential that a person who is skilled in, and has experience of co-operatives should occupy such a post. I want to emphasize once again that I am asking the Minister that a convention be established that the person nominated by the Minister of Agricultural Economy and of Water Affairs either has experience of co-operatives or in-depth knowledge of them so that we in this House can benefit from their knowledge and use it to the benefit of South Africa.
Mr Chairman, one sometimes wonders whether the hon the Minister and this Government are really serious about the promotion of competition in South Africa. The greatest proponent of monopolistic tendencies is the Government itself, for example in the Transport Department for one as well as in the control boards that cover such a large portion of the agricultural and food industry. So, as I say, one wonders just how serious it is. However, I propose to support this Bill because I believe it is one of the very, very small steps in the right direction of getting away from monopolistic practices, of getting away from the uglier faces of capitalism whereby the monstrous organizations take over and plough under the smaller, otherwise competent businesses.
The hon member for Langlaagte raised the issue of mineral water factories. I cannot but agree with him that they are among the biggest rogues in the world when it comes to making money for nothing. I cite in particular and specifically the question of soda water. Soda water—I ask you! They charge approximately 70c for a liter of water with about 1c worth of gas in it. That is the sort of thing one finds. They would not be able to do that if there were competition, but there is no competition because the whole of that business or industry throughout South Africa has now been taken over by virtually three companies—that is all. As all the prices are at the same level, I am quite sure that they have some price maintenance arrangement. I obviously cannot prove it, but I must assume that to be the case.
Why is there no competition? I remember that in the city of Durban alone a few years ago there were about half a dozen manufacturers of mineral water, but all of them were wiped out. They were undercut or bought out. As a result there is no competition and these people are really robbing the public blind with these cold-drinks, including even Coca Cola, if one likes, and any so-called fruit drink, which in most instances is not really a fruit drink at all. A liter of such a cold-drink probably consists of 100 ml of some sort of syrup and 900 ml, the rest, of fresh water provided by the local municipalities at a very, very moderate cost. Yet the manufacturers have the effrontery to charge the prices they do. I accept that there are certain taxes. I accept that they have expenses. I would be a fool of a business man if I did not realize that. In addition, however, they cart their stuff around in those colossal vehicles, double-parking in the streets in all the major cities. It seems to me that they must have some arrangement with somebody to be able to break the law 50 to 100 times a day in many of the larger cities. This is the sort of thing one gets with monopolistic practices. I heartily support the attitude of the hon member for Langlaagte in regard to the companies manufacturing mineral water.
Let us turn to the building trade. Buildings are another major cost of the community. What has the Government seriously done about breaking the monopolistic practices in the building trade? There are three primary products in the building industry: bricks, cement and timber. In respect of all of them there are almost monopolies. Certainly there is very, very little competition. The result is that the prices have been rocketing, which naturally percolates through to the builders and in turn to the people who have to pay 25% on home bonds and who are being hammered right, left and centre.
The question of benevolent monopolies was raised in respect of this industry. As the hon member for Bezuidenhout said, there are no more benevolent monopolies than there are benevolent dictators, because absolute power will ultimately corrupt absolutely. This is the sort of situation which, I believe, we also have in the building industry, as a result of which the prices of homes are rocketing for the poverty stricken people who are living in “pondokkies”.
Try opening a brickfield in Natal!
Yes. I know of two other brickfields which people tried to open—and there may be others. Boy, were they soon closed down! They were soon closed down because the people who bought from them could not get the other clay products they wanted. One was bought out and the other closed down.
This, again, leads one to wonder whether the Government is serious when it talks about anti-monopoly measures and opening up competition. I wonder, too, whether in fact anything is being done about the food distribution industry. This is a major and very important part of our society. In every town and every city in South Africa today, one finds dozens of food distribution outlets that are being closed down. I am referring to the small grocer, the greengrocer, the butcher, the chemist, and umpteen other small stores. Together these small businesses created a cadre of up-and-coming businessmen, the sort of entry one had into the free enterprise system. What is happening to them today? They are being wiped out in dozens because of the massive supermarket and hypermarket chains that have come into being.
There have always been very large stores in our major cities. One accepts that the departmental store was there long before the supermarket came into being. However, there were two fundamental differences. The first was that the large departmental store confined its activities to the central business district and did not go out into all the suburbs, smashing out of business all the small enterprises that were looking after the local trade; and the second was that, as it generated its business in a town, it had an interest in that town, and the directors and owners of that particular business very frequently took part in the activities of that town, either as city councillors or as provincial councillors or even, in some instances, as members of Parliament. This is the type of person we are losing today. I challenge hon members to tell me how many people today are entering public life from the small and medium business sectors, as they used to 25 or 30 years ago. They are not. The reason for this is that there are too few people who are masters of their own business households. There are far too few such people; and the strength of many countries in Europe was built up on their small and medium businessmen. Similarly, the strength of South Africa was built up, in the early days, on this particular category of person. Regrettably, this is dying. In the major urban areas, about 80 to 90 per cent—I hazard a guess at the percentages— of the food distribution business is handled by four companies, whereas in the past those four companies’ business would have been handled by hundreds, probably thousands of small entrepreneurs, people who had a vested interest in making sure that the free enterprise system worked. All those business people have been pushed out of business and we are now left with just the moguls on the top.
I would say that this is a very, very dangerous practice in any country that considers itself a free enterprise society. I believe, however, that it is more dangerous in South Africa than in most other countries because we have a very, very large Black population who have shown, in the past, that they were not very enamoured of the private enterprise ethic. With regard to the Blacks’ independence, the mode of private enterprise has not stood up well against the system of Marxism or of Socialism. This is because the Black people have not been able to see any benefits for themselves in the free enterprise system. What we are doing today, in allowing the normal entry points, the retail distributive trade, to get into the hands of so few people, is making it increasingly difficult for them even to get a start in business. Alright, we know, we had the strictures of the Group Areas Act not permitting them to trade in the White areas, but there have nonetheless been areas where they could trade. However, they have not been able to do so because they have not been able to stand up against the monstrous organizations that can put many millions of rand into the business of ensuring that they can wipe anybody else out of business.
One may say that we live in a free enterprise society and that there is nothing that one can do about it, but if one takes any type of activity, good though it may be in itself, to excess, one gets something that is evil. This, I believe, is what is happening. Take for example alcohol. I find no harm in alcohol. I think it is a good thing. I enjoy my drink. I am sure the hon the Minister also does. However, taken to excess it is evil. There are also many other things. I will not go into the other vices and virtues. However, man seems to have a capacity for making almost any good thing bad by using it to excess or by abusing it. I believe if we are not careful the free enterprise system is going to fall into the same pit of disrepute as so many other things. Already there are many countries that do not subscribe to the free enterprise ethic. Why? Because they have seen the abuse of free enterprise. They have seen that a few fat cats on top grab everything and that the general run of people and the people lower down get nothing. The old saying of “Grinding the faces of the poor” was not arrived at very lightly because these old entrepeneurs did just that. Nonetheless, trade unionism came in and equalized things. One has achieved a certain stability in business. Now one finds, however, that the situation is changing. As one has been given an indication of several times, the commercial and industrial destiny of the whole of South Africa is in the hands of a very small number of people, especially if one takes cross-directorships into account. One gets the feeling that the Government thinks it governs, but when it comes to certain activities it seems to me that certain of these cross-directorate conglomerates are the people have the real say in and the real control over what goes on.
I am happy to support this Bill because it represents a small step in the right direction. However, if we are going to be serious about what we are trying to do I would be inclined to suggest that the Competition Board and the Trade Practices Advisory Board start getting down to it and doing some real work instead of playing around on the periphery of the problem, as I believe they are doing. I am an exponent of the free enterprise ethic. I have believed in it all my life and I have worked in the ethic as well. However, as I said earlier, capitalism—rampant, massive, large capitalism—is beginning to become too dangerous for us to say: You can have a free hand. Therefore I hope that the hon the Minister will give serious consideration to looking at some of the other points that have been mentioned.
Mr Chairman, I am grateful to hon members for their comprehensive discussion of the Bill at present before the House. To me this indicates an interest in the activities of the Competition Board and the important work being done in this connection. I should like to use this opportunity to welcome Dr Naudé, who took over as Chairman of the Competition Board about the middle of last year. This is the first occasion on which he has been present in that capacity. I believe that Dr Naudé’s strict, firm action has already become obvious in the activities of the Board. It is necessary to act firmly and strictly but with the balance and understanding demanded by the complex nature of economic life.
Under Dr Naudé’s leadership the Board has also launched various fresh initiatives. The Board is aware of the investigation into interlocking directorships, as well as the most recent investigation into price-fixing to which I shall refer again later.
Various hon members have mentioned the importance of not applying a competition policy in a fragmentary fashion, and in this respect, too, I am grateful to be able to say that Dr Naudé and the Board are doing important work in connection with the co-ordination of competition policy. Competition policy should be applied uniformly. This policy is aimed not only at the private sector, but also the public sector. There should be no activity in our economic life excluded from the surveillance of the Competition Board. For this reason I welcome the hon members’ support for this legislation, which is intended precisely to make competition policy more uniform and also applicable in all spheres.
†The hon member for Pietermaritzburg South raised some questions in connection with a very particular case, namely the alleged cartel between Iscor and Zisco, and its effect on the local downstream market. The Board received some complaints in this regard and is collecting information with a view of determining whether a formal investigation into that matter is necessary. However, I will furnish the Board with the information given to me by the hon member and I will keep him informed about the progress in that respect.
The hon member also referred to the shortage of manpower on the Competition Board. It is a fact that we can certainly use more manpower in almost every field. However, we have to restrict ourselves. At the moment, the Board is particularly in need of a few highly qualified lull-time members, but the matter is receiving attention. I hope that the board will be strengthened in the very near future. Regardless of the shortage of manpower in some respects, I must tell hon members that the Board has worked extremely efficiently and has completed many of its investigations in a very short time. Regardless of the problems in that respect the existing members have worked overtime and very hard to keep the Competition Board effective in a field where efficiency is of great importance.
The hon member also referred to cartels in respect of another matter, not only in the particular case raised by him, but generally he spoke of the negative influence of cartels on the South African economy. I should just like to remind hon members again of the very important investigation announced by the Competition Board in November last year in terms of section 10(1)(c) of the Act. The investigation concerns, firstly, any agreement or understanding constituting vertical or horizontal price fixing; secondly, horizontal collusion on other terms on which goods or services are supplied; thirdly, any form of market sharing; and fourthly, collusive tenders.
This investigation is of great importance and, as far as I can see, an important development in the South African competition policy in general. Up to now the approach has been to investigate alleged restrictions of competition first and to take action afterwards when justified. As the old approach has proved inadequate, a new approach has been adopted which essentially entails an outright prohibition of certain restrictive practices. The moment a prohibition is announced by the Minister, the contravention of such prohibition would constitute a serious criminal offence.
I think it was either the hon member for Stellenbosch or the hon member for Waterkloof who referred to the fact that this was only an enabling piece of legislation.
*This legislation does not create an offence. Should this recommendation be made to the Minister by the Board, however, and the Minister possibly accept it, in so doing a specific, definite offence is established. Subsequent implications of this are that whenever we hear of uniform price increases— whether of fertilizer, car tyres, wine or whatever—resulting from price agreements—it must naturally constitute a case of agreed prices—it would amount to an offence in terms of the legislation. Such an offence would have to be regarded in a very serious light. I therefore believe this to be a very, very important development in terms of our competition policy in South Africa.
The hon member for Wellington also referred to the fact that co-operatives and marketing boards formed part of the sphere in which the Competition Board could act. I repeat that in terms of section 6 of the Act the Board has always been empowered to investigate co-operatives or existing boards as well. The relevant provision is therefore not an extension of existing legislation in that sense. Nevertheless I also wish to make it very clear—and I do this with reference to the speech by the hon member for Paarl and those of other hon members—that there should be no misunderstanding on this matter. The board is not intent upon nullifying existing legislation with reference to co-operative movements or marketing boards.
Then I shall be out of a job!
No, the hon the Minister of Agricultural Economics may set his mind at rest on that score. This matter has already been dealt with in such a satisfactory way by the two ministries concerned that it would actually mean that the expertise of the Competition Board would be extended by the addition of people from the agricultural and the financial world with the necessary knowledge and ability. As agriculture, like the financial sphere, plays an important part in the economic life of South Africa, I believe it is essential to include on the Board knowledgeable people capable of making a specialized contribution to the uniform execution of our competition policy.
The hon member for Langlaagte referred to the soft-drink industry. It seems I would do well in future to try to speak after the hon member, as his new style—as displayed here today—is obviously to praise the hon member speaking just before him. I must say I could do with a little of the hon member’s praise. I shall therefore try to organize matters in such a way that I take the floor after him at the very next opportunity. [Interjections.] I should add immediately that the hon member for Langlaagte’s contribution was really excellent.
†What the hon member for Langlaagte said in connection with the soft-drink industry—it also applies to what the hon member for Umbilo said in his speech—is of course also true in relation to quite a number of other industries. If someone has any information regarding problems or concern relating to any particular industry it is not necessary to approach the Minister personally. The Competitions Board can be approached directly by hon members. The Competitions Board can also initiate its own investigations in view of complaints received by it. I should therefore invite hon members to make use of the opportunity which they have. Whenever information of this kind is furnished to them, I invite them to provide the Board with the necessary information. If, in the light of such information, the Board should consider it necessary to embark upon some form of investigation, it can always be done.
*I just wish to put it to the hon member for Langlaagte that although I appreciate his points of view, also as regards the promotion of another industry—that of fruit juice—he should not have spoilt a good speech by a plea for subsidies at the end of it. To put matters into perspective I wish to point out that South Africa also exports large quantities of fruit juice. For instance, there is an industry in the USA doing excellent business in this connection. I believe, however, that if we wish to try to reduce interference in the commercial sector to enable it to allocate our scarce resources in the best possible way, we should not unnecessarily disrupt market forces by means of subsidies as well. Nonetheless I believe that the hon member will concede that his remark was probably made out of perversity.
The hon member for Paarl set out the cooperative movement and the importance of control boards very clearly and competently. I agree with him. That pattern has become established world wide, and it is also probably true that without control there would be a great deal of chaos. Nobody is therefore opposed to the existence of such boards and their good work. Incidentally, I hope that the very good speech of the hon member was not made in the spirit of “the lady protesteth too much” when he spoke at such length on control.
If, as in these cases, good control is exercised, it may be subjected to thorough self-criticism from time to time. I know that the hon the Minister of Agricultural Economics may be consulted in this respect if necessary. It is necessary for all good measures which may possibly exist to be subjected to sharp criticism periodically. As with many other matters, long-standing control may become inflexible and may ultimately frustrate the original intention. It may eventually even cease to serve the interests of the consumer and the producer as well as it did initially. The hon member for Paarl agrees.
I wish to thank the hon member for Waterkloof for another thorough and well-considered contribution. In this he threw light on various aspects of the Act and I thank him for his explanations in this respect.
Now I wish to come to the hon member for Umbilo.
†The hon member referred to the Bill as a small step in the right direction. I am not quite sure which direction he is referring to. On the one hand he pleads for more competition, and for the removal of control. He mentioned a whole list of instances where competition can be improved.
He then continues to plead that we should retain a control system, which is directly contrary to free enterprise.
That is not what I said at all. The hon the Minister is distorting …
If the hon member is against shopping centres, he is pleading for restrictions on trading centres and supermarkets. We must, if we follow a particular policy, remove the obstacles. The hon member is quite correct in that free entry is the important criterion. Where free entry is hampered by the actions of either the parties involved in the market or by other restrictions, these restrictions should be removed.
It is not a question of the Competition Board not being active even in terms of Government departments or semi-state institutions. I would like to refer the hon member to the recent report on container depots, where the Board came out against the existing monopoly administered by the SA Transport Services together with a particular group in the private sector. The Board is objective and is even prepared to criticize Government agencies where they are involved.
In general, I want to thank hon members for their contributions.
*I think this debate has once again shown the importance of competition legislation in South Africa. It has shown further that the hon members of this House are prepared to support steps which will make the effective application of competition possible. In that spirit we shall continue, with the support of hon members of this House, to make it possible for the Competition Board to carry out its work as efficiently as possible. It may also inform us of shortcomings which may appear in the legislation from time to time so that we may arm the Board with the most effective legislation with a view to striving for an effective competition policy in South Africa.
Question agreed to.
Bill read a second time.
In accordance with Standing Order No 19, the House adjourned at