MONDAY, 14 APRIL 2003
                                ____

                PROCEEDINGS OF THE NATIONAL ASSEMBLY
                                ____

The House met at 14:02.

The Chairperson of Committees took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS - see col 000.

                          NOTICES OF MOTION

Mr R S NTULI: Chairperson, I hereby give notice that I shall move on the next sitting day of the House:

That this House debates the discussion document on religion in education prepared by the Department of Education. HON MEMBERS: Hear, hear!

Mnr G B HERANDIEN: Mnr die Voorsitter, ek gee kennis dat ek op die volgende sittingdag sal voorstel:

Dat die Huis die onstandighede rondom die ontslag van voormalige lede van die SAKK bespreek. (Translation of Afrikaans notice of motion follows.)

[Mr G B HERANDIEN: Mr Chairman, I give notice that I shall move at the next sitting of the House:

That the House discusses the conditions with regard to the dismissal of former SACC members.]

                             PRECEDENCE

                         (Draft Resolution)

USOSWEBHU OMKHULU WEQEMBU LENINGI: Sihlalo, ngiphakamisa isiphakamiso esibhalwe ngaphansi kwegama lami oHlwini lweziHloko, kanje:

Ukuthi, ngaphandle kokubalula kwemininingwane ekwimiThetho ephathelene nokuqhutshwa kwemisebenzi yale Ndlu, ikakhulukazi umThetho 29(8), ngoLwesithathu, mhla ka-16 Ephreli 2003, ngeke kuqalwe ngemiBuzo. (Translation of Zulu draft resolution follows.)

[The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That, notwithstanding the provisions of Rule 29(8), Questions shall not have precedence on Wednesday, 16 April 2003.]

Agreed to.

EXTENSION OF PERIOD OF OPERATION OF SECTIONS 51 AND 52 OF THE CRIMINAL LAW AMENDMENT ACT, 1997

                         (Draft Resolution)

USOSWEBHU OMKHULU WEQEMBU LENINGI: Sihlalo, ngiphakamisa isiphakamiso esibhalwe ngaphansi kwegama lami oHlwini lweziHloko, kanje:

Ukuthi le Ndlu mayinike uMongameli imvume yokumemezela kwiGazethi ukwelulwa kwesikhathi sokusebenza kwezigaba 51 no-52 zomThetho-siChibiyelo wokuBhekana nobuGebengu, 1997 (umThetho 105 wango-1997), ngokuhambelana nesigaba 53(2) salo mThetho okukhulunywa ngawo, kuze kuphele iminyaka emibili kusukela ngomhla ka-1 Meyi 2003. (Translation of Zulu draft resolution follows.)

[The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move the draft resolution printed in my name on the Order Paper, as follows:

That the House gives its consent that the President by proclamation in the Gazette extends the period of operation of sections 51 and 52 of the Criminal Law Amendment Act, 1997 (Act No 105 of 1997), in terms of section 53(2) of the said Act by a further period of two years, with effect from 1 May 2003.] Agreed to.

                IMPROVEMENT OF PUBLIC HEALTH SERVICES

                        (Member's Statement)

Mrs M M MALUMISE (ANC): Chairperson, the ANC Government restructured the health profession training and development grant in 2002-03. This restructuring is aimed at the recruiting and training of medical specialists in underserviced provinces. This intervention seeks to undo the unequal distribution of medical personnel between and within provinces as this is an obstacle for equitable access to health service.

The ANC Government is expanding community services in 2003 to include health professionals such as clinical psychologists and various therapists. These professionals will also be deployed to rural and underserviced areas. This move by the ANC Government is part of a comprehensive programme to ensure that health services are available to all. It is a demonstration of the commitment of the Government to ensure that the lives of the people are improved for the better through the provision of basic services.

We commend the Government for working tirelessly to develop efficient and quality health services for all our people. [Applause.]

The CHAIRPERSON OF COMMITTEES: Order! Can all members please be seated. Order! Can all members terminate their private meetings and be seated.

       WITHDRAWAL OF DEFAMATORY ALLEGATIONS BY NEW NP MEMBERS

                        (Member's Statement)

Mr M J ELLIS (DP): Mr Chairman, following a court ruling today, the New NP and its top officials have unequivocally apologised and expressed regret for any embarrassment, injury or damage to Mr Tony Leon’s reputation that they may have caused. [Interjections.] They have also unreservedly withdrawn all defamatory allegations made against him and have acknowledged that no foundation existed for these allegations.

The New NP and its officials, Renier Schoeman and Daryl Swanepoel, settled with Mr Leon, following certain defamatory allegations made against him in media statements in May last year. This settlement proves that the tactics of smear, character assassination and defamation have no place in our politics. [Interjections.] It is a timeous lesson for all political parties as we prepare for next year’s election.

The New NP crossed a grave line and we trust that this will now put an end to their smear and fear tactics. This complete collapse and capitulation leaves their leadership further in tatters. The DA welcomes this unreserved clearing of Mr Leon’s name and reputation. Thank you. [Applause.]

                     PRAYER AT SCHOOL ASSEMBLIES

                        (Member's Statement)

Prince N E ZULU (IFP): Mr Chairman, that prayer may be banned at school assemblies sent shockwaves to many religious practitioners, and conflicting responses were noted from many quarters. Prior to this there was the contentious issue that prayer and worship at schools need not be based on a single religious practice, as all religions are accepted as equals.

There is another notion that says religion came to this country before formal education, brought by missionaries and traditionalists, and therefore an intertwining element exists between the two. The Constitution of the country gives freedom of conscience even in matters of religion and worship, but the question is: Are students and pupils big enough to distinguish between prayer and meditation as a way of worship? It is their youthfulness that requires prayer to be instilled in their minds during assemblies as a matter of practice. Prayer and worship during assemblies have a positive influence in the lives of children and need to be protected at all times. I thank you.

                  EXTENSION OF CHILD SUPPORT GRANT

                        (Member's Statement)

Mr P M SIBANDE (ANC): Chairperson, the ANC Government has embarked on expanding the social safety net in the past five years. The number of total grant beneficiaries doubled from 2,5 million at the beginning of 1997 to over 5 million by the end of 2002. The implementation of the child support grant since 1998 has led to over 2,5 million children benefiting from this grant.

The ANC Government is implementing the phased extension of beneficiaries of the child support grant to poor children below the age of 14. The extension of the beneficiaries to 14 years is a response to the high level of deprivation and poverty that many children experience. This extension means that another 3,2 million children will benefit from the grant.

The provision of the social net to our people is a reflection of the ANC Government’s commitment to fighting poverty and building a better life for all South Africans. We call on all sectors to contribute in the struggle to roll back the frontiers of poverty.

                     ONE NATIONAL SPORTS EMBLEM

                        (Member's Statement)

Mnr S SIMMONS (Nuwe NP): Dankie, Voorsitter. Die Nuwe NP steun die idee dat een embleem gebruik moet word vir al ons nasionale sportsoorte en sportlui wat Suid-Afrika verteenwoordig. Ons verwelkom ook die idee dat die springbokembleem in dié stadium voorkeur geniet as Suid-Afrika se sportembleem, aangesien die meeste sportadministrateurs van mening is dat die protea nie as plaasvervanger vir die springbok die mas opgekom het nie.

Die Nuwe NP glo dat een embleem vir ons nasionale sportmanne brûe sal bou tussen gemeenskappe en ook tot voordeel van nasiebou sal strek. As samebindende faktor sal dit nie net ‘n eenvormige identiteit aan die verskillende nasionale spanne gee nie, maar dit sal ook patriotisme onder die verskillende sportspanne én die publiek aanvuur. Dankie. (Translation of Afrikaans member’s statement follows.)

[Mr S SIMMONS (New NP): Thank you, Chairperson. The New NP supports the idea that one emblem should be used for all our national sports codes and sportspeople who represent South Africa. We also welcome the idea that the springbok emblem at this stage takes precedence as South Africa’s sports emblem, considering that most of the sports administrators are of the opinion that the protea was not succesful as a substitute for the springbok.

The New NP believes that one emblem for our national sportsmen will build bridges between communities and will be to the benefit of nation-building. As a binding factor, it will not only give a uniform identity to the various national teams, but also encourage patriotism amongst the various sports teams and the public. Thank you.]

                     FUNDING FOR ANTIRETROVIRALS

                        (Member's Statement)

Ms N C NKABINDE (UDM): Chairperson, the Government has been proclaiming, for quite a long time, the lack of financial resources as the main reason for its failure to provide antiretrovirals to HIV/Aids patients.

The UDM noticed with regret that over the weekend the chief executive director of the Global Fund, Prof Richard Featchum, left our country disappointed after the South African Government had failed to sign an Aids agreement to accept US$41 million from the Global Fund, despite its complaint about funding problems.

Government has delayed and bickered about this massive grant for a whole year now. This clearly demonstrates that Government lacks the will and the determination that is required to stop the social suffering and genocide that is caused by the Aids pandemic in our country. I thank you. IMPROVEMENT OF HOSPITAL SERVICES

                        (Member's Statement)

Mr E N MTHETHWA (ANC): Chairperson, Government has been embarking on ongoing programmes to improve the quality of hospital services. These programmes focus on infrastructural improvement, management improvement, norms and standards for service delivery, and an increased use of public- private partnerships in the operations of hospitals.

The significant progress in implementing hospital revitalisation programmes is evident in a large infrastructure project such as the Inkosi Albert Luthuli Hospital which is managed by the innovative public-private partnership.

Government has made more resources available to address backlogs in service delivery in public hospitals. Government plans to upgrade 18 hospitals over the medium term. The improved service delivery is part of Government’s programme to provide a better life for all people. We commend the ANC Government for remaining steadfast in its mission to ensure that public health services are available to all. Thank you, Chair.

                  ALLEGED ABUSE BY TAIWANESE COUPLE

                        (Member's Statement)

Rev K R J MESHOE (ACDP): Chairperson, one of the most barbaric and diabolical criminal acts ever perpetrated by an employer against an employee was reported in the newspapers this past week. It was reported that a 15-year-old girl from Ivory Park on the East Rand, a domestic worker for Taiwanese employers, was allegedly forced to perform countless sexual acts with the family’s Rottweiler dog. Besides the serious physical injuries caused to this young girl by her cruel employers, she must have suffered terrible psychological and emotional trauma.

The ACDP therefore proposes that the following measures be taken to ensure that justice is done in this case:

That -

(1) a charge of rape against the suspects has to be added to the charges already laid against them;

(2) the Taiwanese couple involved in this heinous crime must be made to pay for this girl’s medical expenses, and the relevant counselling therapy she should undergo;

(3) the dog that was used in the brutal rape must be put down, as it would be a danger to other innocent girls;

(4) the Taiwanese couple must be declared undesired immigrants, and thrown out of the country after they have served their jail sentence; and

(5) a formal investigation must be done by the Department of Labour to look into other accusations that are being made against the accused by residents and workers in the Kempton Park area. These include allegations that -

   (a)  the same couple beat another employee, and forced her  to  sleep
       and eat in the dog kennel; and


   (b)   another  former  employee  was  allegedly  locked  up  in   the
       refrigerator in the family's backyard for almost two hours.

[Time expired.] [Applause.]

The CHAIRPERSON OF COMMITTEES: We would also like to caution members to pay attention to the sub judice rule that might apply to certain statements that members wish to make in the House.

           VENDETTA AGAINST LANGUAGE AND RELIGIOUS GROUPS

                        (Member's Statement)

Mr J P I BLANCHÉ (FA): Chairperson, in view of the newspaper reports of this weekend in which it was confirmed that three Afrikaans-speaking newscasters have received notice that their services will be terminated by the SABC, I call on Parliament to debate the issue whether Government should be called to book for allowing its departments, parastatals and Minister to continue its vendetta against Afrikaans-speaking white males and certain religious groups. [Interjections.]

It must now be obvious to every member of Parliament that the Minister of Education and the Minister of Communications are doing nothing to bring about reconciliation between language and religious groups, and that the ANC-New NP Government has no intention of continuing with the nation- building policies which Mr Mandela advocated.

When this happens, Parliament should also have the opportunity to hear the excuses of the New NP members who are silent partners of the ANC.

            CONFLICT IN THE DEMOCRATIC REPUBLIC OF CONGO

                        (Member's Statement)

Mr M RAMGOBIN (ANC): Mr Chairperson, several heads of state witnessed the signing ceremony towards the end of the Inter-Congolese Dialogue which worked towards resolving political problems in the Democratic Republic of Congo peacefully. This event was indeed a milestone towards the achievement of peace in the Great Lakes region.

On 4 and 5 April fighting erupted between the Mai-Mai group, Mudundu 40 and the Congolese Rally for Democracy in Goma, on the western ridge of Bukavu.

In a separate incident, an estimated number of 150 to 300 persons were executed in Drodro. The UN Mission in the DRC discovered 200 fresh mass graves when it visited this town. The ANC-led Government is concerned about the eruption of violent conflict, massacres and human rights abuse incidents, and believes these are threats to a fragile peace agreement concluded recently. The peace agreement reached at the Inter-Congolese Dialogue provides an opportunity for the people of the Democratic Republic of Congo to work for the reconstruction and development of that country. For this, the people of the Democratic Republic of Congo must make the agreement work.

In the interests and wellbeing of future generations, peace is an imperative to tackle the task of fighting poverty and creating a just and democratic social order. I thank you. [Applause.]

            POSTPONEMENT OF GROWTH AND DEVELOPMENT SUMMIT

                        (Member's Statement) Mr C M LOWE (DP): Chairman, the postponement of next month's long-awaited Growth and Development Summit, widely billed by the ANC as the jobs summit to resolve South Africa's economic ills, is extremely bad news for South Africa. Whatever the reason for its delay, it sends out the wrong message and questions the ANC's commitment to tackling the appalling unemployment figures, our country's gravest challenge.

Since the ANC came to power, unemployment has climbed from 24% to between 35% and 45%, with close to seven million South Africans jobless. We also have a serious skills shortage in key sectors of the economy. This is a crisis in anyone’s book and Government must urgently resolve it.

We require political will, fiscal leadership allowing greater fixed investment, and particularly the attraction of skills into our economy. The ANC’s track record here is seriously wanting. They must show more than mere commitment to reducing unemployment. The postponement of the jobs summit is not the way to go. Until they move beyond the school of good intentions and fancy plans, they will never roll back the frontiers of poverty.

                     ISMAIL HENDRICKS REARRESTED

                        (Member's Statement)

Mr T E VEZI (IFP): Chair, Ismail Hendricks, the former police sergeant who was arrested for the murder of five petrol attendants in Grassy Park, Cape Town last June, has been rearrested after escaping from a psychiatric hospital near Grahamstown.

Hendricks, who was declared mentally unfit to stand trial and who may not be released without the permission of a High Court judge, escaped by simply walking out of hospital despite being under the supervision of the hospital’s security guards.

It is totally unacceptable that a person who allegedly murdered five people could be allowed simply to walk out of hospital. The relevant authorities have to take responsibility and be held accountable for this incident.

We hope that the security situation in the hospital has been improved so that there is not a repeat of the incident. I thank you. INAUGURATION OF THE RAIN QUEEN MODJADJI VI

                        (Member's Statement)

Mna Q J KGAUWE (ANC): Modulasetulo, nase rena ba mokgatlo wa ANC, wa go kwešiša bogoši Afrika Borwa, re thakgetše kudu ka gore ka Labotlhano la go feta Balobedu ba Bolobedu bja gaModjadji, Sehlakong, Bolotšwi, ba be ba beya kgošikgologadi, thobela Mmakobo Modjadji V1 setulong sa borena. Ba be ba hlapile ka mapoto, ba tlotše ka maafokhatha, ba opela: ``Pese nkemele ke a tla ke sa pšhaa mapoto.’’ Ya na pula! [Disego.] [Legofsi.] (Translation of Sepedi member’s statement follows.)

[Mr Q J KGAUWE (ANC): Chairperson, today we, the ANC, the organisation that understands chieftancy in South Africa, are very happy, because last Friday the Balobedu of Bolobedu in gaModjadji, Sehlakong, Bolotswi, were inaugurating the Rain Queen, Mmakobo Modjadji VI. They washed with light beer, and smeared themselves with avocados, singing: ``Bus wait for me, I am still relieving the light beer’’. Rain! [Laughter.] [Applause.]] NEW NP SCORES FROM FLOOR-CROSSING

                        (Member's Statement)

Mr J DURAND (NNP): Chairperson, the NNP noted the profound statement by President Thabo Mbeki when he commented on the floor-crossing period. He said about the DA: It sought to frighten the national minorities with the spectre of a swart gevaar.'' He further said:Having transformed the DP into a destructive remnant representative of the past against which we fought, it renamed itself the DA. Naturally, it continues to attract to its ranks those who felt comfortable in the bossom of the NP that was led by P W Botha.’’

This is also supported by the statement of the MDC shadow minister of foreign affairs that the DA is using the MDC to bash the ANC, and the ANC Youth League referred to the racist DA and its hatred for the indigenous people of Zimbabwe.

It is clear that more and more individuals who realise that South Africa belongs to all who live in it, black and white, are abandoning the DA. Minority communities want to assist the majority and become architects of a South Africa that belongs to all who live in it. [Interjections.] This became evident over the weekend when over 500 DA members and some IFP members joined the NNP in Gauteng. [Interjections.] They came from racially diverse areas such as South Hills, Greater Lenasia, Greater Eldorado Park, Slovo Park, Soweto, Orange Farm, Westbury, Menlo Park, Reiger Park - members who followed Richard Pillay and Basil Douglas to the NNP. I thank you. [Applause.]

                         RELIGION IN SCHOOLS

                        (Minister's Response)

The MINISTER OF EDUCATION: I can’t help it, Chairperson. A very famous Frenchman once said ``This is a very funny kind of animal. When it is attacked, it defends itself.’’ So, I will defend, on behalf of my party and my Government. Two statements were made. So, there will be two discrete and different responses. I welcome the intervention by Mr Zulu of the IFP. I think it is enormously important to recognise what is happening and what will happen in our country. The spiritual element in education is central to the curriculum development, particularly with regard to the national curriculum development of Grade R to Grade 9. There is no question of banning prayer in school assemblies. There has never been a case to do that.

Of course, one is not responsible for the kind of interventions being made from a very partisan political position. I think we are playing with fire when we do those things. The process that has emerged is as follows: Under the Presidential Council of the Interfaith Community, I presented the proposals for bringing back religious education into the curriculum, which has been largely accepted. The issue of religious observances is a matter under active consideration. We don’t have Anglican, Muslim, Catholic and Jehovah Witnesses’ schools. We have South African schools. That is the first point to remember.

Secondly, there are some religions that have been demonised in South Africa. The Zion Church, for example, has never been able to get recognition as far as school presence is concerned. I met the bishops of the Zion Church which has 4,5 million followers. They welcome that for the first time we are applying the constitutional principles of equality, fairness and equity.

What we are now saying, finally, through the National Advisory Council … [Time expired.]

                        LANGUAGE AND RELIGION

                        (Minister's Response)

The MINISTER OF EDUCATION: The second response is that the hon Mr Blanché is like the Bourbons: He’s learnt nothing, and forgotten everything. [Laughter.]

This is a classic example of this. I am surprised that the DA benches, for their own reasons, clap when he says this. [Interjections.] It is nothing liberal, hon Mr Delport, that he has said, because your leader said in Stellenbosch five months ago: The function of the ANC is to destroy the Afrikaans language in Stellenbosch. [Interjections.] Stop your bleating, hon Delport, because I think you are passé. [Interjections.]

The CHAIRPERSON OF COMMITTEES: Order, order!

The MINISTER OF EDUCATION: What is now uniformly, comprehensively accepted is that where there is a primary need for education in a language, it will continue there. However, all universities and technikons now must prepare a language plan. That refers to the indigenous languages which have been largely ignored by higher education. So, where Afrikaans is the primary language of instruction, it will continue in that way, much more than it is at Stellenbosch at present. [Interjections.]

On the other hand, everybody has accepted it now, but in a multicultural and a multiracial society, you cannot use language to exclude people simply on that basis, particularly because they once were deprived from the state institutions which have an enormous amount of investment. The language issue in higher education is settled now. There are no hosannas of praise for the Government. We don’t expect that from you, but we expect you not to make inflammatory statements that Education and Communications want to abolish Afrikaans.

We will act on the basis of advice from the National Advisory Committee on Religious Education. They have said that where there is a need for prayer, it must be a multireligious prayer. That is all. It must be multireligious, in keeping with the Constitution. That is the liberal approach. I denounce the idea that the DA stands for any kind of liberalism. You are the biggest lot of opportunists I know! [Applause.]

                    GROWTH AND DEVELOPMENT SUMMIT

                        (Minister's response)

The MINISTER OF TRADE AND INDUSTRY: Thank you, Chairperson. It’s a pity that the DA’s spokesperson is making a rather trivial and inaccurate political point around the Growth and Development Summit. This decision was not taken by the ANC at all. That is totally inaccurate. I think it shows a disrespect for the National Economic, Development and Labour Council to suggest that their decision, taken by them jointly, should just be ascribed to the ANC. I think this is a bad mistake.

This Growth and Development Summit is not a job summit, per se. It is a summit where we intend to take certain actions, and all parties agree on this, possibly with the exception of the DA, that we will try and make it real and concrete, activities that civil society and Government would act together on to try and find means of speeding up the growth process.

If the parties in Nedlac decide in their wisdom that they should delay this in order to prepare better, I would prefer to accept their wisdom, and I am sure this House would also, rather than the trivial point made by the DA. [Applause.]

                         APPROPRIATION BILL

Debate on Vote No 32 - Trade and Industry:

The MINISTER OF TRADE AND INDUSTRY: Thank you, Chairperson. Hon members, chief executives and chairpersons of the DTI group - many of whom are here today - ladies and gentlemen, today the DTI’s Budget Vote is tabled in this House against the backdrop of considerable global uncertainties, but with the South African economy poised for sustained growth and development. A report on the real economy is also being made available today. This juxtaposition is a complex situation that we must manage.

The DTI’s mandate is to lead and facilitate access to sustainable economic activity and employment. Vote 32 provides the means by which the DTI will pursue that mandate over the next three years. Let me begin by referring to this complex situation I have just mentioned and evaluate our plans in the light of recent global events. It is critical that we consider the ramifications of these events, including the war in Iraq, for our own efforts to reconstruct and develop our economy. The global economic downturn and uncertainty, with delays and investment decisions, falling consumer confidence in major markets, volatile oil prices, etc, are adverse factors that we have to contend with this year. However, our current economic strength places us in a relatively favourable position to respond and mitigate the effects on South Africa.

However, what is of very great concern is the potentially lasting damage that may have been done to multilateralism as a means of global governance and achieving common goals. Interdependence and multilateralism are cornerstones of global peace and prosperity. The undermining of international rules and norms is one of the most disconcerting aspects of recent events. The implications are manifest in several important areas, including the Doha development round of trade and negotiations; Nepad and the market access negotiations between SACU and the USA. We are hopeful that the SACU negotiations with the US will remain on track. Negotiations will commence in May and technical work has already been done to prepare us for what will be a tough, but ultimately beneficial process.

Another consequence of the events in Iraq is that the attention of developed nations and flows of development assistance and investment may turn away from Africa and Nepad. Whilst we are sure, as the President indicated, that the USA administration will not turn away from Africa, it would be naive to think that it will be a priority. The actions of the United Kingdom will also have the effect of preoccupying the European Union with its own internal policy coherence.

Nepad is critical to the successful economic development of our continent, and its successful implementation is based upon innovative partnerships between African nations and the rest of the world. Whilst we must not allow world attention to be diverted from this enormous task, we must realise now more than ever that Africa’s future lies essentially in our own hands.

At the Doha ministerial meeting of the World Trade Organisation at the end of 2001, multilateral trade talks were acknowledged as a primary mechanism for pursuing global equity and development. Unfortunately, the Doha development round is at an impasse. There have been no resolutions to a range of issues that are critical for developing countries, such as Trips, public health and many other implementation issues. The refusal by the US to agree to a mechanism that would allow our countries to legally import medicines for public health reasons under compulsory licences is posing severe constraints to developing countries that cannot afford the cost of expensive drugs. A further point of tension is that at the end of March there was no agreement on how to advance the negotiations on agriculture - perhaps the most crucial issue for developing countries and indeed for the success of the development round.

The rich and industrialised nations are failing to demonstrate leadership and are putting this very important multilateral process in jeopardy. The Doha development agenda needs to be put back on track and the major powers bear a disproportionate responsibility to do so. Concluding the Doha round negotiations is crucial to supporting continued growth in the world economy, and without this, there will be no development for the majority of the world’s people. This is a profound problem that should be the real focus of humanity’s attention at present. South Africa will not shirk its leadership responsibilities and will argue these points vehemently in the forthcoming WTO ministerial meeting to be held in Mexico. It is now clear that we will seriously have to activate the South-South alliances that we have advocated for some years.

Despite these global uncertainties, they are not cause for us to change course. We must continue on the path towards growth, employment and equity that we have embarked upon. The DTI will continue to lead and facilitate access to sustainable economic activity and employment for all South Africans through high levels of investment, increased access for South African products and services in international markets, and the creation of a fair, competitive and efficient market place for domestic and foreign businesses, as well as for consumers.

The DTI’s strategy is set out in its medium-term strategy framework which has been tabled in this House. This strategy framework underpins the budget that is presented here today. We have assessed our strategy in the light of recent global events and we believe that it remains relevant. Our priorities for the MTEF period fall into several categories - the new policies and legislation to give greater direction and certainty to enterprises and other economic activities, more financial support to enterprises, more information about economic opportunities and new partnerships to lever greater outcomes than we achieve by working alone.

During this year, the DTI will formulate and publish policies and strategies on consumer protection in general and consumer credit in particular, as well as the development of co-operatives, and we will update our small enterprise development plan. In addition, the implementation of the integrated manufacturing strategy will be elaborated, and customised development strategies for priority sectors will be formulated. We will shortly start work on the simplification of South Africa’s tariff regime. The new international trade administration commission, which will be officially launched in June, will administer this important process.

This year, in addition, the DTI will introduce into Parliament amendments to the National Small Business Act, the National Gambling Act, the Manufacturing Development Act, the Lotteries Act and the Intellectual Property Laws Act. New pieces of legislation to be introduced also include the Black Economic Empowerment Bill a Liquor Bill, and a Co-operatives Bill. In addition, a corporate law reform project will be prioritised.

Over the next three years, the DTI will provide approximately R1 billion of financial support to enterprises through the Small and Medium Manufacturing Development Programme, the Competitive Fund, the Sector Partnership Fund and the Export Marketing and Investment Assistance fund. In addition, we will provide financing for critical infrastructure to support designated industrial development zones, one example of this being the John Ross Highway in Richards Bay. Other forms of financial support provided to enterprises include tax incentives through strategic industrial programmes, export credit guarantees, as well as R300 million this year for the taxi recapitalisation programme.

Additional financial support has been made available through the IDC, Khula and the National Empowerment Fund. In February the Minister of Finance announced that R10 billion would be made available to finance BEE over the next five years. The National Empowerment Fund will complement the work already done by other state development financing institutions. The National Treasury and the DTI are working on the details of this new NEF process and will make the announcement later in the year.

The DTI is committed to providing its customers and stakeholders with relevant and timely information about economic opportunities in a user- friendly and accessible manner. In recognition of the important role played by parliamentarians in communicating information to their constituents, the DTI has launched a new resource centre in its office on the 6th floor at 120 Plein Street. I take this opportunity to invite you to that centre.

The manufacturing advisory centres that have been established in a number of towns and cities in every province in South Africa have become a critical tool for reaching our customers. In recognition of this success, we will be increasing the budget allocation to this programme by over 300%.

The DTI continues to seek to leverage a wider impact than it can achieve alone through forging strategic partnerships with important stakeholders and role-players, including other Government structures, sectors and specific enterprises. Later this year we will launch a new sector-based forum to promote partnerships between Government and priority sectors. I have written to the chief executives of several sector associations to invite them to participate in this important initiative.

Government has identified several priority sectors that we believe have untapped potential to contribute to the acceleration of growth in output, employment, value addition and equity in our economy. We strongly believe that there are many opportunities in agro-processing, in the beneficiation of minerals and metals, in the expansion of the auto industry’s success into component manufacturing, in the aerospace and boat-building industries, and in exploiting niche markets in pharmaceuticals and other chemical products. We also believe that there is significant potential in high-value-added service sectors, including call centres and back-office business processing, as well as in certain areas of software development that South Africa has pioneered. If you have a look at our exhibition through there, you will see some fascinating examples of this software.

Government is calling on enterprises in these sectors to organise themselves and partner with the DTI in removing the remaining impediments to realising their full potential. Allow me to emphasise that the DTI is not pursuing an export-led strategy at the expense of those sectors that produce basic goods for the domestic market. Economic growth, the creation of jobs and the pursuit of economic empowerment for historically disadvantaged persons require that we support all enterprises that seek to expand and grow in a sustainable manner. However, we must recognise that South Africa is still a relatively small market compared to that of Brazil and India, for example, and the expansion of output needed for growth means that we must have access to markets larger than just our domestic market. In short, we must export.

This does not imply that the nontradable parts of our economy are not important. There is obvious potential for growth and employment in this part of our economy. The DTI has been challenged to do more to develop this potential, and this is something that we will grapple with over the next few months. Greater attention will be paid to the production of basic wage goods, to ways in which more labour-intensive production can be encouraged, as well as to the industrial policy elements of providing basic service delivery.

I am confident that the DTI will deliver on the commitments that I am making today. I have reviewed the commitments made by myself on behalf of the DTI with regard to previous Budget Votes and I am satisfied that on 24 out of the 28 commitments the DTI has indeed delivered, and significant progress can be reported regarding the four remaining matters.

Let me select a few highlights. About 3000 small and medium-sized enterprises have received grants through our small and medium-sized development programmes introduced in 2001, generating 31 000 new jobs. Twelve projects have been approved in the strategic industrial programme, introduced only last year, generating new investments of R2,9 billion, creating 1 700 direct and 8 085 indirect jobs. As a result of the expansion of the Motor Industry Development Programme to 2012, the automotive industry has announced expansion plans totalling R5 billion.

The National Industrial Participation Programme has also been very successful. Approximately R2 billion’s worth of investments thus far and new jobs have been created and generated R7 billion in exports and domestic sales. About 155 projects are currently being financed through this programme.

Our vision for the South African manufacturing economy was set out in the integrated manufacturing strategy released in April last year. This strategy underpins all of the DTI’s work. A few weeks ago, the broad-based black economic empowerment strategy was launched, and the Black Economic Empowerment Bill will shortly be tabled. We have appointed the task team that will help set up the advisory council and have started working with the Treasury, as I have indicated, on the MEF. The IDC has played and will continue to play a critical role in this. According to the Ernst & Young report, the IDC provided some 23% of all BEE financing in 2002 - R2,7 billion of a total of some R12,4 billion.

South Africa’s strong export success has been actively supported by the DTI. We have been pleased with the massive uptake of our product in this area, including R150 million to support through the Export Marketing and Investment Assistance Programme and nearly R2 billion worth of export credit guarantees provided by the Export Credit Insurance Corporation. The DTI has reorganised its foreign offices to provide an improved service and to allow for greater private sector involvement.

In March we hosted the first awards recognising champions of South African consumers. The Companies and Intellectual Property Registration Office is now successfully operating as an independent agency. The National Lottery has allocated 85% of the funds available for good causes, just three years after its inception.

I believe we have transformed ourselves into a more customer-focused organisation. Our customer care centre, which I launched one year ago, now receives more than 30 000 calls per week from enterprises seeking assistance. In October last year, the DTI business express made its inaugural journey, making many stops, from Empangeni to Mhlathuze, De Aar, Upington and Kimberley, and reaching almost 4 000 enterprises for the first time. Our capacity to deliver on this mandate has increased significantly over the previous three years with underspending being brought down to just 1% of the total budget of nearly R3 billion.

In recognition that we can still do more as a department, a learning centre has been established to build the competencies of our employees on an ongoing basis, allowing us to provide service excellence to our customers and leadership to our economy.

In conclusion, allow me to thank the Portfolio and Select Committees on Trade and Industry for their consistent support and the very real contributions they make to the work of the DTI to build an economy in which all South Africans can meaningfully participate. Likewise, our partners in the economic and employment cluster within Government have always been willing to put the shoulder to the wheel in order to ensure that the Government’s economic agenda is implemented in a coherent and integrated manner.

I would also like to thank the leaders of the 21 agencies that make up the DTI group, or the Council of Trade and Industry Institutions, for their efforts in aligning themselves in support of our common objectives of growth, employment and equity.

I express my personal thanks to Deputy Minister Lindiwe Hendricks for the support she gives me in our immense workload and for the many areas of leadership that she provides in the department and its work. Both of us must pay a special tribute to the director-general for a remarkable achievement of leadership in making the DTI what it is. Around him he has an outstanding team. I am very, very proud of the people of all ages, gender, race and creed who are the staff of the DTI. It is my privilege to work with them as we build the new South Africa. Just this week the DTI, along with the national Department of Agriculture, received the Mpumelelo Award for the best Government departments.

As the President has said, the tide has turned. Vote 32 is placed before this House today and I ask hon members to support it. I thank you. [Applause.]

Dr R H DAVIES: Chairperson, the DTI is an extremely important Government department with a very broad mandate covering many of the critical areas in the real economy. Since 1999 this department has been involved in a major restructuring exercise, which was driven by a recognition that the inherited systems and structures were inadequate to confront the challenges facing it.

The restructuring has aimed, in the first instance, at transforming the personnel and the demographic character of the department. As a result of this exercise, the DTI is now staffed by a team of highly dedicated young professionals and is ahead of Public Service guidelines in terms of targets set for race and gender employment equity.

However, the restructuring has also aimed at bringing about major institutional rationalisation and organisational reform. This exercise has not been without its cost and casualties, but in my judgment, and having watched it closely now for four years, it has yielded significant and real benefits which are measurable in a number of ways. For example, in the past the DTI was a department known for significant underspending. As the Minister indicated just now, there has been a significant turnaround in this, with around 98% of the funds budgeted for 2002-03 having been spent, according to information provided to us in the committee.

There is a closer alignment of expenditure categories and activities. Efficiency has improved, whether measured by the sharp increase in the number of dropped phone calls or the appreciable reduction in the time required to register a company or a close corporation. The department’s publications, website and physical premises are now all much more accessible, user-friendly and informative. In due time, the DTI will move to what has been termed a new campus, which will break decisively with the old image of a grey bureaucratic Public Service department. These sorts of changes may be seen by some as small or peripheral, but they point to a department that is building real capacity to confront major new challenges.

The department’s medium-term strategic framework is based on a number of assumptions. These include that the linkages between economic growth and greater levels of employment and equity are not automatic. The state must therefore develop and strengthen these linkages and it therefore has an activist role to play in ensuring that economic growth and development benefit all South Africans.

Based on this, the strategic framework highlights a number of key performance areas. Some of these include an increase in economic output, employment and the contribution of small enterprises, progress in achieving broadbased black economic empowerment, with emphasis on black women, and a more equitable geographic spread of economic activities. These, in the view of many of us in the portfolio committee, must become the defining priorities for the period that lies ahead as the department settles down from the restructuring and seeks to consolidate on the gains made in this process.

It is not that goals like these have not been objectives in the period up to now, nor is it that no progress has been made in achieving these. Of course, employment, empowerment and small business development have all been objectives since 1994 and significant advances have been made in terms of giving effect to all of these strategies. Some of these gains were referred to in the speech by the Minister and I will also join him in suggesting that people should go and look at the exhibition which shows concretely some of the gains which have been made.

However, in the immediate post-1994 period there were also a number of other pressing challenges. The department has argued that we inherited an economy that faced the major threat of de-industrialisation. The manufacturing sector inherited from the apartheid era was a typical import substitution enclave, dependent on foreign exchange earned by the sale of primary products, orientated to the production of consumer goods for the upperincome, mainly white segment of the domestic market and dependent on high tariff walls.

With major global pressures to reduce tariffs, the department found itself focusing considerable attention on encouraging and cajoling often reluctant established manufacturers to embark on restructuring, adapt to enhanced competition and increase their involvement in export trade. These efforts have resulted in significant gains in competitiveness and export performance.

There was also the issue of reinserting South Africa into the complex and changing mosaic of multilateral, regional and bilateral trade arrangements. It was not that apartheid South Africa was not involved in international trade; clearly, despite sanctions, it was, but it often traded on the worst terms available and was excluded from a host of preferential trading arrangements to which comparable economies had access.

The period after 1994 saw much energy expended on often difficult negotiations that have resulted in improved access to more favourable trading arrangements. In practice, issues like these often competed for attention with other objectives and commanded a degree of de facto if not de jure priority attention. Such issues will of course need to continue to receive serious attention. As the Minister indicated just now, anyone who has followed the progress of the WTO negotiations since the third ministerial in Doha in November 2001 cannot but be dismayed at the lack of progress in advancing to anything that could credibly be described as a developmental round. We are also, as he indicated again, going to have to take stock of the new global environment that is being created by the flagrant overriding of multilateralism which the assault on Iraq represents. However, the biggest and overriding challenge facing us in South Africa in the phase that lies ahead must surely be to consolidate on the successes and gains made in earlier phases, and to move more effectively and decisively in massively increasing employment and income-earning opportunities for large numbers of our people facing poverty, unemployment and marginalisation.

We may be seeing a welcome small turnaround in the trendline of formal sector employment, with net job creation being recorded in the third quarter of last year for the first time in a long time, but this needs to be seen against the background of a substantial loss of formal sector jobs in the period since the 1980s. True, there may have been expansion of informal sector activity, but, as a recent study by Stats South Africa has indicated, much of this has been low-quality and low-income activity.

How we understand this reality is critical in developing an appropriate response. Poverty, marginalisation and unemployment are the products of deep-seated structural weaknesses of the inherited economy whose effects will not be corrected, and indeed may be exacerbated, by the operation of market forces alone. The industries, primary or secondary, that grew up in this country under colonialism and apartheid depended on the exploitation of cheap and unskilled labour power obtained from the majority of colonised people through various coercive and exploitative mechanisms. That accumulation model was from the 1980s onwards thrown into a deep crisis by a combination of domestic struggles and global processes.

Thousands of unskilled workers on whom the accumulation process previously depended have been discarded and marginalised as industries restructured, while demand for new employees has increasingly sought people with skills. Luddite resistance to the emergence of a more knowledge-intensive economy will not provide any solution, but neither, as the DTI strategy document acknowledges, will mere passive resignation to the logic of market forces. Markets may encourage competition and innovation, but are also notorious for polarisation, widening inequality and marginalisation.

Turning this reality around is fundamental to our endeavours to place our economy on a higher growth path. Those very few developing countries that have achieved some measure of success in promoting growth and industrialisation, have all either been characterised by relatively low levels of inequality or have taken active steps to reduce poverty and inequality. Unleashing the productive potential of thousands of our people currently unemployed or marginalised is the only route to sustainable prosperity for our country.

Transforming this reality will require an activist developmental state working smartly to address constraints to growth and development, and to mobilise all stakeholders behind a national development programme. As the ANC, we have set ourselves the target of halving the numbers of our people who are unemployed by the year 2014. Only part of the jobs needed to achieve this can be expected to come from the growth of the existing formal economy. Realising this goal will require massively expanding income- earning opportunities for people in townships and rural areas.

The DTI has identified a number of new initiatives it needs to make to contribute to accelerated transformation. The integrated manufacturing strategy, the expanded and refined small business strategy, and the broadbased black economic empowerment strategy are all critical interventions which, if appropriately focused and effectively implemented, can significantly expand opportunities for many thousands of historically and currently disavantaged people. To achieve their potential, these interventions must expand and improve services which support and nurture initiatives and must also find creative new ways to remove long-identified barriers to successful ventures such as access to finance. Initiatives like the Nedlac financial sector summit and the forthcoming growth and development summit must be built on to cajole, if not persuade, financial institutions to come to the party. Within the broad area of enterprise development, co-operatives have a particular significance. Co-operatives, as collective ventures, have the potential to draw large numbers of people into productive activity. By pooling scarce resources and skills, they are potentially more accessible to poorer people and communities. By operating on a collective and co- operative principle, they build on the strong sense of community that exists among our people. Co-operatives are of course created by social movements and not by Government departments, but in developing countries in particular, a high level of government support and facilitation has been essential to foster the emergence of a viable co-operative movement. Indeed, in my view, it is critical that co-operatives are accorded a measure of priority and preference in entreprise development programmes.

I hope that we do not get into a fruitless chicken-and-egg debate about which needs to come first - the co-operative movement or a supportive Government programme. We have an embryonic co-operative movement in this country, and the department has recently established a division to focus on co-operatives and is due to present legislation on co-operatives to Parliament this year. I would urge both the department and the co-operative movement pro-actively to push forward with dialogue and engagement, and to work creatively together to develop and implement an appropriate programme.

The DTI has a very modest budget to carry out these tasks - a little over R2,5 billion this year, which the MTEF envisages rising to R3 billion by the year 2004-05. The ANC will of course support Vote 32 of the 2003-04 Budget. If and when the DTI needs more financial resources to carry out and implement its important tasks, I am sure it will receive the support of both the present Portfolio Committee on Trade and Industry and also of its ANC successor in the next Parliament. I thank you. [Applause.]

Mr C M LOWE: Chairman, the DA is concerned that the DTI, as currently structured and focused, remains unable to achieve its vision, meet its mission statement or reach the goals it has set. It is an open secret that it has not coped over the past years, despite the excuse of restructuring, and I feel that whatever the benefits of its latest reincarnation, it remains unable to cope with current challenges, let alone the far-reaching regulatory implications of its black economic empowerment strategy.

Radical surgery at the DTI is required, with a new focus on doing much less but far better, if we are serious about rolling back the frontiers of poverty. Three examples of where the DTI is failing are its BEE strategy, the National Lottery Fund and the South African Bureau of Standards, newly renamed Standards South Africa.

President Mbeki’s fundamental shift on black economic empowerment in his weekend letter on the ANC website is instructive. We agree that BEE is not about displacing those who are skilled and white with others who are newly skilled and black, but rather about translating into reality the vision of a country that belongs to all who live in it, where all South Africans, black and white, have the opportunity to help realise and contribute to the sustenance of what he terms ``the South African miracle’’.

We support Government’s intention to legislate on a coherent, consistent and transparent BEE policy, because it is the key to our nation’s future stability and prosperity. The question is: What will it take for BEE not to go the same way as the RDP policy - full of good intent and purpose, but which ultimately came to nought?

Ten years after the ANC took power, in many respects nothing much has changed. While we have seen massive enrichment of the same elite few in the name of what has passed for empowerment, for the vast majority of black South Africans the promise of a better life has failed and they are just as excluded as ever they were. [Interjections.] And if the President really believes his own nonsense that the DA is a party of the right, then for once he may just be correct. For if he visits the DA website, he will see that the DA is right about the urgent need for job creation, about HIV/Aids and about Zimbabwe and the DA has been right about Iraq. [Interjections.]

We seriously question the financing and economic growth aspects of the strategy. The admission that the finance task team only met for the first time three weeks ago makes section 3.6 of the strategy at this stage nothing more than an idealistic statement of intent. Until Government addresses these two fundamentals, its BEE strategy remains in doubt.

I remain deeply concerned that Lotto funds are not reaching those most in need, particularly charities. Only 16% of funds available for distribution last year actually reached the applicants. Since its inception a paltry 7% of funds has been paid out. Welfare organisations are floundering and people are starving while bureaucrats in sharp suits and paid top-drawer salaries build lavish empires to distribute other people’s money and proudly show us, by way of high-tech presentations and glossy brochures, how they have workshopped, strategised, visioned and planned - yet they are unable to produce an income statement to show how the money has been spent.

Despite its exemplary history, Pinetown Child Welfare lost its grant this year because it erroneously omitted two annexures from its application. Last year they received R500 000. This year they will receive nothing because the men in suits say so. Mr Minister, will you come to Pinetown with me and explain to this community and the communities of Claremont, KwaNdebeka and Marion Ridge how this can be?

We also need to rethink the current distribution policy that ignores the community chests - saying they are distribution channels - when they should be used as institutions with the infrastructure, the expertise and the integrity to quickly get the money to where it is needed most.

I now turn to the SA Bureau of Standards where something is terribly wrong. Complaints about poor service and suspect management of the bureau abound, with business and industry up in arms at the empire the bureau’s CEO has created. They charge that he openly states that he is above the law, regardless of what the legislation says, and that the DTI is running a whitewash on the accreditation system. If the bureau is so concerned about the standardisation marks, why does it not concentrate on the illegal mark holders who are not being regulated? Is this perhaps deliberate?

It is obvious that the bureau staff are too intimidated to speak out for fear of losing their jobs. Only last week the bureau issued a confidential memo to all staff, threatening that no information can be divulged without the CEO’s authority and that they are bound by the Standards Act and their employment contracts. The memo said that should the police or Scorpions contact them, staff must tell them that they are not authorised to divulge information and are to inform the CEO immediately. Should staff receive a court order they must take it to legal services who will ``deal with it’’.

Industry representatives are also fearful of speaking out. This month the chairman of Namsa’s technical committee was declared persona non grata at bureau meetings for stating that the motor industry’s relationship with the SABS had reached its lowest point. The electrical industry and the fire industry have voiced similar concerns, but the CEO has sidelined the bureau council appointed by the Minister.

The dictatorial style of the bureau’s CEO is central to the myriad of problems. He has effectively cut out all middle-management expertise and is over-riding all their findings and proposals. Where individual employees have lifted the lid on the bureau’s top management, with considerable evidence of highly suspect foreign travel expenses and leave irregularities confirmed by the internal auditors, financial wrongdoing, fraud, sexual harassment charges and even allegations of child pornography, they have been intimidated, suspended and charged with leaking confidential matters to outside sources. Several cases are before the CCMA. Allegations against the CEO include receiving a R40 000 discount on his Mercedes 4X4; perverting the course of justice by making a false statement about his role in a drunken driving accident that left one woman dead; awarding a company, Eurotype Test Centre, apparently financed by the DTI to the tune of R40 million and which has dodgy auditors and questionable ownership, the SABS contract to test Mercedes and BMW vehicles; that R75 million in the reserve fund may have been depleted; and that the DTI has not acted because the CEO has an extremely close personal relationship at the highest levels of the DTI.

Mr Minister, you will agree with me that these are extremely serious allegations, and I ask that you urgently investigate and use your authority to establish a ministerial commission of inquiry into the SA Bureau of Standards, and particularly the activities of the CEO. We cannot allow this matter to continue. I thank you. [Applause.]

Mr P F SMITH: Thank you, Chair. In the few minutes I have, I’d just like to look at South Africa’s international trade relations and also black economic empowerment. Colleagues, it is true that the DTI is a central actor in our economy. The DTI’s role, and one with which we concur, is to ensure that we play a meaningful role in the global economy and that we reap the benefits from doing so.

Clearly, international trade has never been more important for South Africa. This is particularly the case since we have been making large strides in moving away from an import substitution economy to an export-led growth strategy. The Government and the DTI should therefore be congratulated on the level of export successes, and in particular on the new lease on life given to the manufacturing sector. In fact, I think it is fair to say that the South African economy has been undergoing a fairly fundamental restructuring exercise in the past seven or eight years, and that we are far more resilient and better placed than ever before to engage with the global economy. However, we still find ourselves a developing nation and in our foreign trade relations there are still barriers to trade in respect of our exports.

The question of agricultural subsidies to the developed world is of course a perennial problem that we are trying to grapple with. We want to urge the Minister to use the next round of WTO talks really effectively to seek to address these protectionist practices by the rich nations of the world. In fact, we agree with his assessment that the rich countries of the world lack leadership in this respect. We urge the South African Government to fulfil this role on behalf of the South.

However, we do note that if one is looking at the export opportunities in particular, there is a common perception that South African exporters are not making enough of trade opportunities that are being created by Agoa. Textile manufacturing in particular does seem to be taking advantage of the agreement, but other sectors apparently do not. Perhaps the Minister could assist us with this one.

Trade alliances, too, are becoming more and more important in the globalised economy, and we want to encourage the Minister and the Government to pursue these regional and international trade alliances with the same vigour as was the case with the European Union free trade agreement.

When it comes to black economic empowerment, I think it is true to say that there is an urgent need - and all of us in this House will recognise it - to increase the level of economic participation by historically disadvantaged South Africans. It is almost inconceivable, in fact, to think that a fledgling democracy like ours, which is undergoing a process of consolidation, will be unable to withstand massive social upheaval caused by deep-seated poverty and the economic exclusion of those who have, historically at least, been virtually excluded from the economy. We welcomed at the time the Minister’s announcement - I think it was on 19 March - of a broadbased BEE strategy.

We also welcome the approach taken in the Mining Empowerment Charter, which went beyond pure ownership participation to include human resource development, employment equity, enterprise development, preferential procurement, skills development and transfer, and management participation. So there is a whole package of things.

As far as investment is concerned - I think the Minister indicated R10 billion over five years to assist the BEE process - it is something that we would endorse, as well as the scorecard approach to ensuring compliance. We also support the creation of enabling legislation and the establishment of the BEE council. By and large, we are on board with the Government in respect of that.

If one takes a global approach to the department - there are so many facets to its jobs, as the chair of the committee made reference to earlier, it is difficult to give a global overview, but if one had to do so - I would say that the DTI is in fact doing a good job, especially in respect of export promotion and the rejuvenation of the manufacturing sector, but the results are patchy and uneven. However, most critical of all - and I know it is not directly a job creation department - when one looks at job creation, which should be one of the most important outputs of the department, it really has to be accepted that we are failing dramatically as a Government across the board.

The DTI has a role to play in this, but it is not the sole actor responsible for job creation. If one looks at job creation, it is true that some of the agencies have in fact been creating jobs, but across the board, the large-scale job creation that is required is simply not there. We trust that the growth and development summit will in fact come up with creative solutions to address these problems, because the department cannot do this alone. Thank you.

Ms J MOLOI: Chairperson, hon members, respectable guests, I must say that I am shocked by the ignorance of the DA. Nonetheless, I take it that perhaps these issues are too complex for their understanding, and to engage them on this level would be a waste of time. Maybe we should move forward.

As we engage with the Budget Vote of the Department of Trade and Industry, it is important to acknowledge and appreciate the broad scope of work faced by this department. The Department of Trade and Industry forms the backbone of the South Africa’s economy. Jointly with the departments that constitute the economic cluster, they are faced with immediate challenges requiring intervention with regard to higher rates of investment, job creation, economic restructuring and improved efficiency and productivity, and largely with regard to social equity in order to balance racial inequalities, integrate gender segregation and close the wide gap between the two worlds that exist within our society, that is, the world of the poor and that of the rich.

Significant progress has been achieved in a number of key areas identified by the DTI and those that were announced by the President in his previous addresses and this year’s state of the nation address. Let me cite a few examples of areas of achievement with regard to investment and the economic infrastructure.

The Integrated Sustainable Rural Development Programme is unfolding nationally and in the provinces. With regard to small and medium business development, the SMME Act, as the Minister announced, has been brought before Parliament, with particular amendments regarding major areas to ensure greater intervention in order to take this programme forward.

Regarding black economic empowerment, a broadbased black economic empowerment strategy has been finalised and announced by the department. It must be emphasised that the broadbased black economic empowerment strategy comes as a major intervention within the entrepreneurial sector, and is well received. Discussions are taking place broadly on taking this strategy forward for the improvement of the economy in our country and the true integration of blacks within the economy.

The South African Women Entrepreneurs’ Network, Sawen, has been established and will be supported and sustained by the department. This structure is encouraged to draw up a linking strategy to rural women’s development by mentoring rural women on business skills and encouraging rural women to rise to the level of those of Sawen. Hopefully, and correctly so, Sawen will be integrated into the broadbased black economic empowerment strategy to pursue our country’s gender mainstreaming programme.

The integrated manufacturing strategy has been finalised and presented to all stakeholders after broad consultation. I must indicate that this has been an involving process that is amplified by its outcome which projects a dynamic programme that will take this country’s economy forward at national, provincial and local levels. We must congratulate the department on this achievement. The outlined integrated manufacturing strategy programme has huge potential to deliver on sustainable job creation.

The department has made good progress to improve its outlook and to market its offerings. It has been rated first in report-writing. I am sure most of us have, in one way or the other, come across magazines and communiqués describing the departmental functions and identifying progress made in various areas. I am sure also that we have picked up packages which have that kind of communiqué to reinforce what I am saying.

We have to appreciate the fact that this is a huge department, carrying out many functions. In its attempts to organise itself, it has realised the broad scope of involvement of its functions and has made wide attempts to cover its work as broadly as possible.

The department has been consistent with regard to its strategic goals, activities and objectives within the allocated budget, and has been able to amend some of its programmes to be in line with its objectives. This has been realised by its interface with 21 agencies falling within its scope of operation, for example Ntsika, having to refocus and take the current required functions. I am sure that Namac is also included.

The Portfolio Committee on Trade and Industry recently conducted public hearings on funding institutions that relate to trade and industry as a further attempt to assess the alignment of implementation to the objectives of the department. A report on these hearings is currently being processed for further presentation.

The DTI has also played a significant role in World Trade Organisation negotiations, paying particular attention to, firstly, the state of play in the World Trade Organisation; secondly, key recommendations from the Nepad meetings, including the involvement of Intra-African trade; and thirdly, South Africa’s proposal to address the impasse in the World Trade Organisation.

It is a worrying factor that special and differential treatment, as well as the implementation of Trips, as the Minister highlighted earlier, have not been resolved fully. Again, failure to meet the deadline for agricultural modalities poses a threat to the ambitious outcome which is expected in agriculture, envisaged by all WTO members as the most critical aspect to market access issues. Since the Doha agenda was constructed in a balanced manner that accommodates the interests and concerns of all WTO members, the departure from, or reluctance with regard to the implementation thereof, poses a serious threat.

Currently the war on Iraq will refocus members’ attention on military affairs and away from the important trade negotiation deadlines. This means that the World Trade Organisation members would have to redouble their efforts after the outbreak of war, if we will ever have the ``after-war’’. They will have to heal their wounds, get back to trade talks and make sure that they are on track. Of course, a unilateral decision was reinforced by the war on Iraq, but we need to reinforce multilateralism by reviving and reinforcing the WTO negotiations.

The US has recently finalised a bilateral agreement with Chile and Singapore and has started negotiations on trade accords.

I can see that the light is flashing. In conclusion, maybe one would have to indicate, as the Minister has indicated, that the Department of Trade and Industry has established an information centre located in the building opposite Parliament. This is the information centre that members can access to do their constituency work and get all the information they require. Thank you, Chairperson. [Applause.]

Dr R T RHODA: Chair, this world has become a giant high-speed computer game whose sole wish is to make money. In this game the smart money does not waste time on a long-term, high-quality commitment to productive enterprises which produce real prosperity to meet the needs of the real people. No, it seeks short-term returns from speculation in erratic markets and from near simultaneous trades involving trillions of dollars in multiple markets to profit from minute variations in foreign exchange rates.

The trouble with this is that corporations that invest in real assets, as opposed to financial assets, are forced to restructure their operations in order to maximise immediate short-term returns for their shareholders. Unfortunately, the way of doing this is by downsizing and automation, and by externalising as many costs as possible.

Localities are pitted against one other in a standard-lowering race to the bottom to offer the most generous subsidies, tax breaks and freedoms from environmental and safety standards. Government revenues dwindle, while at the same time workers are pitted against each other in a struggle for survival that pushes wages and working conditions to their lowest level.

It is in a complex environment such as this that South Africa has to compete and survive. All I can say is, thank God we have brilliant economic leadership in South Africa today. The core business of this portfolio is to provide leadership to the South African economy through its understanding of the economy, its knowledge of economic opportunities and potential, and its anticipation of the future.

The Department of Trade and Industry also seeks to represent the voice of enterprises within the Government of South Africa. The Department of Trade and Industry, in concert with its partner the Council of Trade and Industry Institutions, or COTII, works collectively to maximise impacts on the South African economy.

There is a definite improvement in all spheres - better planning and better efficiency. The resources of R2,6 billion, driven by the department with just over 1 000 personnel members, are pushed into neat implementation strategies with well-defined projects and programmes - all this to increase the outcomes of the key performance areas which will impact positively on growth, employment and equity.

I think the Minister and his department need to be congratulated for achieving eight consecutive years of steady economic growth in the face of difficult domestic and international obstacles. Considering the fact that we are a developing economy, I think we are looking at a miracle in progress. We have much to be excited about and much to be proud of.

In the past the South African economy was only thought of in terms of gold and mining, but today our economy has shifted dramatically to a high-tech, high-value manufacturing economy.

Sadly, and perhaps not surprisingly, there are those who would love to see our economy collapse so that they can blame it on bad governance. What we hear from them is not encouragement, but moans and groans about Zimbabwe, Aids, crime, corruption, joblessness and other negative statements. [Interjections.] To these people I say, for your sake and for the sake of your offspring, please drop all this cynicism. Rather roll up your sleeves and lend a hand. [Applause.] Contribute a little to help build a better life for South Africans. Stop denigrating our President and his Cabinet.

I know how you feel. It’s not easy because there is nothing harder than coming down in the world. However, formerly privileged South Africans can spare themselves much heartache if they face up to the fact that their loss of status and power is permanent. Power has passed into African hands, and it will not come back. [Applause.]

During the days of apartheid the privileged came to see government as the sole instrument to solve almost any problem, from education to crime, drought and old age. Those days are gone. Government resources will be put at the disposal of the poor, not the privileged, and those who seek the privilege of isolation will have to pay for it.

Charles Darwin said, and I quote:

It is not the strongest of the species that survives, not the most intelligent, but the most responsive to change. The past decade has witnessed a monumental change in the fortunes of our country. A decade ago South Africa was teetering on the brink of a fiscal crisis, stuck in an economic cul-de-sac.

In conclusion, I would just like to say that as far as our metal and mineral wealth is concerned, I would like to see an increase in the level of beneficiation through appropriate incentives and disincentives in order to increase employment and add more value to our natural resources before export. Miners have long lamented the lack of local beneficiation of the gold that they haul so laboriously from the bowels of the South African earth. Our gold ingots are sold to buyers overseas, where craftsmen turn the yellow metal into jewellery that is sold back to us at many times the price of the original material.

The New NP has pleasure in supporting this Bill. I thank you. [Applause.]

The DEPUTY MINISTER OF TRADE AND INDUSTRY: Chairperson, Minister and hon members, the hon Lowe really sounded like a paparazzo standing here, regurgitating all the newspaper rumours. He really did not add anything to this debate. [Interjections.]

Hon members, CEOs and chairpersons of the DTI family of institutions, and comrades, the Department of Trade and Industry has a very broad mandate to give leadership in the economy and also relating to the implementation of service delivery, finance, regulation, training and development. As I have emphasised in the previous budget address, the work of the DTI covers a wide range of economic activities, and these can only be achieved through a number of different institutions. The challenge that we face as the DTI is the alignment of each institution in a dynamic environment and globally competitive economy. A key to the DTI’s success is the effective alignment and management of these agencies for policy coherence.

We in the department were able to make certain observations regarding the institutions that report to the DTI. Certain overlaps and duplications in their workings were evident. Some of their mandates lacked clarity and this led them to pursuing activities that were not part of their mandates. As much as the agencies were successful in their ventures, they did not achieve an equitable geographic spread in their outreach. Deficiencies in the operations of the institutions were apparent and easy access to their offerings was lacking. In addition, the criteria used by some of our institutions were very inflexible.

In August 2000 the DTI established the Council of Trade and Industry Institutions, COTII for short, in order to align them behind the microeconomic reform strategy, the integrated manufacturing strategy, as well as the DTI’s strategic objectives. In order to strengthen coherence and consistency between COTII and the DTI, four quarterly meetings and an annual leadership conference are to be held. Currently we are developing a set of performance indicators within the DTI and its family of institutions to ensure that the activities of these institutions do indeed meet the strategic objectives of the DTI. In recognition of the importance of these agencies, we are pleased that the portfolio committee is now calling them to present in Parliament in the manner structured by the DTI.

Do hon members know that there are 21 institutions that form COTII? These agencies range from big to small, from the Industrial Development Corporation or the IDC to the Proudly South African campaign. The DTI group has 6 000 employees collectively, and constitutes one of the most powerful potential forces for change in the South African economy. The DTI group has an asset base of R30 billion and they collectively receive 71% of our budget every year.

We have divided these institutions into three categories: development finance institutions, regulatory agencies and specialised service agencies. We have been working on ensuring that the mandates and programmes of these institutions are aligned and that they are co-operating and sharing information in an effort effectively to support the business community of South Africa.

I believe that each of these institutions has made an impact on the South African economy, and through better co-ordination and co-operation there will be great improvements in the products and support that they offer.

Firstly, in the area of development finance institutions we have the Industrial Development Corporation or IDC, Khula Enterprise Finance, as well as the National Empowerment Fund or NEF. Each of these institutions focuses on a different aspect in the provision of finance to businesses, including small business finance, micro business lending, credit guarantees, venture capital finance and black economic empowerment. These institutions are continually identifying new products to cater for the different needs in the market place.

In our budget this year we have proposed that additional resources be transferred to Khula and, as already announced by the Minister of Finance in his Budget Speech, substantial resources will be transferred to the NEF as part of the financing mechanism for the black ecomomic empowerment strategy. The IDC requires no funding support, as it is a self-financing and profit-making organisation.

Let me mention some of the highlights from these finance institutions. The IDC has over the past five years facilitated the creation of 70 000 jobs. It has also approved projects responsible for generating more than R20 billion in export earning per annum, which has contributed significantly to South Africa’s export orientation. Over the same period the IDC has facilitated investments of more than R21 billion into South Africa, and it has also made significant progress in support of BEE through providing loan finance to the value of R1,4 billion to black businesses. It is important to note that almost 60% of the IDC projects were in rural and peri-urban areas and that 1 200 SMEs have received loan finance from the IDC.

Coming to Khula, in the past year Khula has also made a significant impact by providing 800 enterprises with R145 million worth of credit guarantees on their loans by providing wholesale loan finance to SMMEs lending agencies for R77 million, and through these programmes Khula has contributed significantly to SMME job creation. They have also implemented a rural micro enterprise lending programme which has lent to over 26 000 micro enterprises.

Secondly, in the area of regulatory agencies we have the competition authorities, the gambling and lotteries boards, the Estate Agency Affairs Board, the Micro Finance Regulatory Council and the Companies and Intellectual Property Registration Office, amongst others. Members of Parliament should be familiar with the workings of each of these institutions, as the DTI has tabled legislation on them over the past few years.

Some of the highlights of these institutions are improvements in the registration of enterprises by Cipro, which facilitated over a 100 000 close corporations being registered in one year. Cipro has also improved the availability of registration forms for companies, simplified the procedures and improved their use of technology in the tracking and management of company documents.

Thirdly, in the area of specialised service agencies we have a variety of different institutions. These include institutions dealing with small business development; those dealing with quality, standards, technology and innovation; and those dealing with women in business.

In the area of small business development we have Ntsika Enterprise Promotion Agency and Namac. The programmes of these institutions complement each other in the provision of business development and support services to SMMEs. Namac, which was started by Ntsika as one of its subprogrammes, has consistently offered quality support to small and medium enterprises, and the DTI proposes in Vote 32 that their allocation be increased from R43 million to R80 million in this financial year. This additional funding will see the expansion of the programme to all provinces in South Africa, and the extension of the business referral programme, called Brain, to 415 locations. It will see increased support in the provision of franchise information and the establishment of one-stop shops for business support services.

Some of the highlights from the national manufacturing advisory centre programme include support provided to 1 400 enterprises and 1 800 new jobs created in those enterprises. It has ensured that over 15 000 jobs were sustained through the interventions of the manufacturing advisory centres. Ntsika has also made its impact felt by offering business counselling, advice, training and information through its network of 170 local business service centres. In addition to this, the institution was also able to assist 78 guesthouse operators with opportunities and training during the World Summit on Sustainable Development. It also assisted with training to 100 emerging construction contractors, and over 100 crafters were supported at the craft imbizo which was an exhibition centre at the WSSD, with a further 40 crafters supported to attend an international craft exhibition in Italy.

Through the successful tender advice centre programme, Ntsika has facilitated small and medium enterprises winning tenders to the value of R87 million. This was done through the provision of advice on what tenders are available, how to complete tender documents, and accurate costing and pricing of tenders.

The institutions dealing with quality, standards, technology and innovation are the SA Quality Institute or SAQI, the SA National Accreditation System or Sanas, the CSIR, SABS, and Technology and Human Resources for Industry Programme. These institutions will continue to play a critical role in the development of South African business to support them in their efforts to become internationally competitive. As the Minister has outlined in his speech, the focus on knowledge, new technology and innovation is the direction in which South Africa needs to move in order for us to engage successfully with the global economy. It is therefore necessary that the DTI institutions continue with the excellent work that they provide in these areas. Last but not least, institutions dealing with women in business are Technology for Women in Business or Twib, which you know about, and the SA Women Entrepreneurs Network. While Sawen is not a COTII institution, it receives substantial support from the DTI, and I am pleased to announce that in this Vote an amount of R2 million has been allocated to the programme. Sawen was established, as the hon member Moloi told us, to assist aspiring and existing women enterpreneurs in the small business sector to find solutions to the wide range of gender-related obstacles that have an adverse impact on their network. The network will address these constraints by advocating appropriate policy changes, building capacity and facilitating the access of women to business and information. More details on these institutions are available at the exhibition and you are all welcome to visit this exhibition.

The CEOs of all the institutions I have spoken about have been invited to today’s presentation, and I am sure that there will be an opportunity for members to talk to them and engage them on their various institutions and what they have to offer.

I would like, at this stage, to request all the representatives from the COTII institutions to stand up so that hon members of Parliament can identify and speak to you during the exhibition. Those who will attend the cocktail function can also engage you at that time. [Applause.] Thank you. If you do not get the opportunity to speak to them today, the information on these institutions and products is available at the newly established parliamentary information centre on the sixth floor, 120 Plein Street.

Finally, at the exhibition outside there are a number of success stories of businesses that have achieved their success in part through the support of the DTI. Before concluding I would like to recognise two of them. Is Ms Maria Garcia of MG Laboratories in the public gallery? She is the founder and owner of MG Laboratories, which manufactures, develops and exports a world-class skin care range. I invite you to visit her stand. The second one is Moses Singo, the owner of Singoflora. [Applause.] Singoflora sells its products in South Africa and exports to Switzerland, Singapore, Hong Kong and the USA markets. [Time expired.] I thank you for listening to me. [Applause.]

Adv Z L MADASA: Chairperson, the high percentage of job losses in the country is a cause for concern. All those who feel for those who are suffering because of poverty should share this concern. The poor are the most susceptible to diseases and sicknesses such as HIV and TB.

Whilst the department is doing its best to help the export industry which is characterised by job losses to some extent, this should not be at the expense of locally grown industries. Exports may sustain investment and bring technology, but the department needs to be more biased towards industries that are labour intensive, for example, the metal and plastics industries. While there is clearly a need for black economic empowerment to redress the imbalances of the past and to enlarge the economy of the country, it remains to be seen whether the new black elite will endeavour to address unemployment and poverty or whether they will embark on a race of consumerism.

It will be unfortunate if they collaborate with the past elite and exacerbate the suffering of the poor. Black economic empowerment should be socioeconomic empowerment. The black elite should focus their attention on nurturing a culture of investment, saving, and the patient building of capital. There needs to be a dramatic shift from the culture of dependence and consumerism to hard work.

The funds in the department ought to be used for development and the eradication of poverty. It is a concern that units such as the PIC still have no clear policy on development and BEE strategy. The PIC must increase its capacity to spend and collaborate with other units such as the IDC.

The ACDP will support the budget and hopes that it will change the lives of the poor. Prof B TUROK: Thank you, Chair. I think we all know that South Africa is a much more open economy now than it was ten years ago. But openness has its advantages and disadvantages. In the current crisis with Iraq and the militarism that we see, South Africa becomes more vulnerable, not only to the volatility of currencies, but also to the possibilities of world recession.

Many people do not know that in the United States at the moment the basic industries are working at 75% of capacity. If one was cynical, one would say that the military industrial complex in the United States required a war in order to boost its industries and to fix the economy as far as the basic industries of the United States were concerned. This idea that the military industrial complex benefits from war is not a new one. We have known it for many years. The Second World War and many other wars can be explained by the problems of underusage of capacity in the developed world.

But the economists or the military industrial apologists may be wrong, because in the finance material that I read the speculation is that even the Iraq war will not fix the US economy because the crisis is too deep, and the rest of the world will be affected, including ourselves. Most important is that our own exports, which are so vital to our economy, are vulnerable to global forces and global challenges, and this is something we need to worry about.

Let me turn to our own assessment of our own economy. The Medium-Term Strategy Framework for 2003-06 states that the South African economy is dualistic. Many people talk about the dualism of the economy in rather bland and unsophisticated terms. Anyone who has studied Third World economies is familiar with this question of a dual economy. You have on the one side a developed economy which is competitive, and which has good infrastructure and good services. On the other side, you have an underdeveloped economy which contains the marginalised people who are poor, and where services and infrastructure are poor. In South Africa, of course, this refers to the rural areas and the townships. It is because of this dualism of the developed economy and the underdeveloped economy that you have the extremes of wealth and poverty that we know in South Africa. And it is because of the extremes of wealth and poverty that the ANC in its most recent document at its 2002 national conference stated unequivocally that the eradication of poverty and inequality remained the central challenge of South Africa. I repeat: the eradication of poverty and inequality remains the central challenge for South Africa.

But the question is: How do we overcome poverty and inequality? The DA has come out with a document, and I am very pleased that both the hon Andrew and the hon Lowe are here to listen because I am going to refer to their document.

I find this document quite useful in that quite a lot of research has been done, and I am sure that there are many positive points in the document. It is clear that some of these points have been borrowed from the ANC, but we will be generous and we will allow them to do that. [Laughter.] The DA subscribes to a market economy, but says that the state has an important role. They also say - despite the title of the document, ``It’s All About Jobs’’, indicating that they have solutions about jobs - that creating jobs is not an easy task. But what I find unusual is that the document does not refer to inequality. I would ask the hon Andrew, when he comes to speak later, to tell us why the DA document on economic policy does not refer to inequality. The ANC has made it clear that it is concerned about poverty, but we are also concerned about inequality. Where does the DA stand on inequality? [Interjections.]

I want to refer to paragraph five in the document, which refers to the requirements for faster growth. I read this with bated breath because I thought maybe the DA had solutions that we hadn’t thought of yet. What are the requirements for faster growth? Let me tell you right away. The first requirement for faster growth is a negative: an insufficient political commitment. The second one is inadequate fixed investment. The third one is a shortage of skilled people. The fourth one is an environment that is not enterprise friendly. That is the whole section. I have quoted almost all of it. It’s all about jobs and it is all about insufficient this, inadequate that and so on.

I think the DA must try to be a little more positive so that we can really learn from them what should be done.

I referred to a dual economy. The developed economy, as we all know, has gone through substantial restructuring. Gross fixed capital formation has shown real growth over the past three years, partly, let me say, because of state spending. But the private sector has also assisted. Fixed capital formation last year was 20% higher in real terms than the 1995 level. Improved productivity has resulted, and we are now closer to international standards. This of course has assisted exports.

The National Productivity Institute has provided some data about this. Multifactor productivity in the private sector has improved by 5%, which is the highest it has been in 30 years. However, the problem is that productivity increases job losses in some cases. Many other development economists and I have always felt that South Africa should pay more attention to labour-intensive industries.

But when you look at the National Productivity Institute - I hope the Minister can perhaps say something on this when he replies - we have seen that where jobs have been created in labour-intensive industries, you find productivity has declined. There is a correlation between productivity decline and employment creation, which is something of a dilemma for me. I think we need to unpack this problem of labour-intensive industries which is so important for South Africa. In terms of creating jobs, productivity problems seem to arise, and sometimes jobs are created at the loss of productivity. I don’t know what the answer is and we need to examine that carefully.

Let me, in the last few minutes that I have, turn to what I really care about, and that is the underdeveloped sector of the economy. As I have said, we have a dualism: a developed economy and an underdeveloped economy. How can this play a more significant part in our economic life? How can the marginalised become more productive? We have had a clue about this recently from the Minister when he said that we are looking at a components industry which will both export and feed the local market, but which will also have a strong downstream production process and impact, and thereby reduce dependency on imports on the one side, create jobs on the other and feed into the underdeveloped sector of our economy.

Our portfolio committee has discussed this at great length. We have come up with the idea - it is not new - that beneficiation is the key to the underdeveloped sector of our economy. Really, as the ANC statement in the last conference indicated, beneficiation is an issue we want to raise if we are going to overcome poverty and inequality - and I stress ``and inequality’’. In other words, we are not in the business of creating this elite that the DA talks about, without respect for the inequalities which plague South Africa, which undermine demand in the country and which leave so many people in poverty and unemployment.

Beneficiation is therefore an issue we want to raise. We also want to raise the issue of greater investment in the social fabric of our country in the underdeveloped areas, namely in the townships and rural areas. We have not seen enough of that. We want to see an improved and increased contribution in the physical and social infrastructure among our marginalised people, so that they too can benefit from the economy as a whole.

We also want to ask the question whether it is not time for Government to sponsor, support, facilitate - whatever word you wish to use - a mass consumer goods industry in South Africa which is labour-intensive, promotes job creation and is targeted at the domestic market. It is true that we are subject to WTO rules on competitiveness and so on. But can we not find a way within the rules of creating a mass consumer goods industry which will do the things we need? Regarding small business, I have travelled to many Third World countries and one is always struck by the vast range of small industries and small businesses that one finds in countries such as Malaysia, Nigeria, Kenya, Ghana and the countries of Latin America. Always on the periphery of the main economy you find small businesses located. Why not in South Africa? Why is it that our townships and rural areas are so barren of small businesses? To conclude, I believe we need a new initiative and a new momentum to develop the underdeveloped areas of our economy, to benefit the marginalised and the poor. [Time expired.] I thank you. [Applause.]

Dr S E M PHEKO: Deputy Chairman, in the limited time at my disposal to debate the budget of Trade and Industry, I want to declare that the PAC believes that trade is one of the most important instruments that can be used for development. The budget allocated for international trade and economic development has risen dramatically, from R17,9 million in 1999 to R1OO,2 million by 2005.

The PAC would like to see the expenditure utilised to strengthen regional integration with SADC. We believe this is essential for trade to improve among the countries of SADC.

At the international level, the PAC is concerned about the department’s trade position in the World Trade Organisation. The request and offer stage of the General Agreement on Trade in Services, or GATS has begun.

The PAC is concerned about water being traded away at the request of the European Union to liberalise basic services. The PAC reminds the Government that since 1994, 10 million people in our country have experienced water cuts. It has been shown through recent case studies that poor people often cannot afford to pay for basic services such as water, health, education and electricity if they are liberalised under GATS.

The PAC holds that Parliament and the public shoud have access to information about the current GATS and WTO negotiations, and have an input into policy-making. Many policies of GATS and the WTO have a negative impact on employment, revenue, balance of payments, eradication of poverty, social equity and emerging farmers. They hinder the growth of African business in particular. This will force many small businesspeople to abandon their businesses or be subjected to fewer preferences as citizens of this country.

Many have already gone bankrupt and urgently need Government intervention. Black economic empowernment has not touched them. The South African Government must insist that the WTO address the more than 110 deficiencies that prevent developing countries from selling their agricultural products, fishery products and finished products to industrial nations’ markets.

The PAC also warns that our country’s health care system and the provision of medication for serious diseases such as TB and HIV/Aids will continue to be undermined under the trade-related aspects of intellectual property rights agreements.

The PAC supports this budget, but demands that it must serve the country’s and continent’s interests more that foreign interests. I thank you.

Mr S M RASMENI: Deputy Chair, Minister of Trade and Industry, Deputy Minister of Trade and Industry, hon members, director-general, deputy director-generals, CEOs and the staff of Trade and Industry in general, when the ANC took power in 1994, we inherited an economy shaped by colonial dispossession and apartheid which resulted in huge inequalities, increasing poverty, rising unemployment and huge government debt. Since then our economy has undergone major restructuring in accordance with our democratic principles of nonracialism, nonsexism and equality for all South African citizens.

Affirmative action was introduced in all areas of our economy in order to redress imbalances arising from the limitations on the opportunities of black people and women.

The need for a well-coordinated approach in terms of our economic activities and good governance can never be overemphasised. This approach included both vertical and horizontal levels of integration within and across all spheres of government, Government departments, parastatals and funding agencies, which hon Moloi referred to when she spoke about public hearings conducted by the portfolio committee.

In addition, we need to strengthen economic strategies such as local economic development, integrated development planning, black economic empowerment, co-operatives, SMME development, women empowerment, black and rural development, and job creation.

The primary aim of the DTI is to accelerate economic growth, create new employment opportunities and reduce all forms of economic inequalities in our country. We are encouraged to notice the new call centre, one-stop service centres, the new information and training centre at 120 Plein Street, which the Minister referred to, and the more focused annual budget of the Department of Trade and Industry. This deserves words of praise.

On the budget itself, we hope that the increased allocations will make a difference in the lives of the most marginalised entrepreneurs in our country.

We welcome the unfolding of the broadbased black economic empowerment policy, intended to correct what the President called ``the structural fault in our economy and society’’. I quote: As a result we have a dual economy and society. The one is modern and relatively well developed. The other is characterised by underdevelopment and an entrenched crisis of poverty.

The black economic empowerment process stands as a tribute to the life and times of Comrade Chris Hani, whose life and times we are celebrating, starting last week Thursday, 10 April. He had this to say during his time:

The struggle for peace is not, and cannot be, separated from the overall struggle for national democratic reconstruction of our economy, our society, state structures and the armed forces.

In the past the failure of big business to support SMMEs has been a key weakness of the recent empowerment experience. Therefore, the black economic empowerment policy must facilitate sustainable economic activities and employment for all South Africans through higher levels of investment and exports, and increased access for South African products in international markets, to grow enterprises and help define economic policies and to create a fair, transparent, competitive and efficient marketplace for domestic and foreign business, as well as for consumers.

The President in his state of the nation address underscores this as follows:

Government will lay greatest stress on black economic empowerment that is associated with growth, development and not merely redistribution of wealth.

Growth can only be accelerated and sustained if all our people are fully integrated into the economy. We therefore need to take additional collective action in order to achieve the objectives of the Constitution and the Freedom Charter.

We welcome the amendment of the Small Business Development Act, but we acknowledge that much needs to be done to enable Government to play an instrumental role in creating an enabling environment for the development and promotion of SMMEs, co-operatives, women empowerment, job creation and transforming the economy of this country.

We must applaud the work done by our Government in ensuring that there is a cluster approach to both planning and implementation by various roleplayers and departments of Government. Indeed, there has been a shift from a situation in which different departments each planned their own programmes in isolation.

All of us, particularly the Department of Trade and Industry, must respond with action to the marching orders from the 51st National Conference of the ANC which was held in Stellenbosch, and in response to the state of the nation address by President Thabo Mbeki on 14 February 2003, that none of us can say that we do not know what to do to address the challenges that face our people.

With regard to economic growth and development, social equity and job creation, we have the policies and we have put in place the black economic empowerment strategy. With regard to the strengthening of local government and the traditional system of government, we have the policies and we have put in place the necessary legislation giving guidance on integrated development plans, so that all spheres of government and communities can participate in the economic development of our country and all its people. The ANC supports this budget. [Thank you.] [Applause.]

Miss S RAJBALLY: Deputy Chair, though locally our citizenry may view our economy as downtrodden, there are many factors that indicate otherwise.

The Government has instituted a programme of transparency so that the public may monitor Government activities and progress. The MF feels this is extremely crucial and beneficial. However, much as it is important that our failures are reported, the positives should also be reported. The negative is constantly reported in the media as the highlights of the Government’s progress. This causes dissatisfaction and a lack of confidence in our present regime.

Though it is important for us to note downfalls to motivate programmes and stronger attempts, the MF feels that the South African economy has a lot of potential.

The Department of Trade and Industry plays an extremely important part in the status and advancement of the South African economy.

South Africa has been noted as one of the most advanced economies in Africa. Being a component of this larger entity, we play an important part.

Not only do we desire ourselves to be a stronger competitor in the global market, but Africa desires the advancement of its potential as a stronger competitor. Efforts should be embarked upon between neighbouring states in respect of this sector of trade and industry.

Domestically small enterprises should be given leeway to advance their production so as to contribute to this. This is also a means of stimulating social development and overcoming poverty.

Trade and industry should not only constitute our affluent potential, but also the affluent content of persons from all walks of life, which the department is aiming its best to do.

The budget allocated is sufficient. The MF hopes it will be utilised efficiently, and wishes the department great progress.

The MF supports Budget Vote 32: Trade and Industry. Thank you. [Applause.]

Mr K M ANDREW: Chair, the hon member Turok is always so disappointing with his shallow and inaccurate criticisms. He makes a big point of saying that the DP’s policy document on economics makes no reference to inequality. Perhaps he would like to read page 1, if he can get that far. It says:

This will ensure that resources are available to address poverty, inequality and other problems in our society effectively.

[Interjections.] Two paragraphs on, he will see it says that the DP recognises the existence of unacceptable income, opportunity and skills gaps which need urgent attention. [Interjections.] I am sorry that he missed all this.

A job is often the difference between opportunity and hope on the one hand, and poverty and despair on the other. I would like today to make a specific suggestion in relation to the employment of unskilled people.

Creating productive work opportunities for unskilled people is an enormous challenge. Even with economic growth and other measures, there are likely to remain large numbers of unskilled people unable to find remunerative work.

The future success of our country is all about jobs and how quickly they can be created. Some developing countries recognised this some time ago and welcomed any industrialist who could offer large-scale employment to their millions of jobless people. We have no choice but to do the same if we want to drastically reduce unemployment and poverty in South Africa. The DA believes that export processing zones can make a significant difference to reducing unemployment among unskilled and semi-skilled workseekers. In 1970 only a handful of countries permitted such zones. This had grown to 116 last year, in both developing and developed countries.

Not all export processing zones have been successful, but as the World Bank has reported, and I quote:

Properly managed, however, zones can generate income and create jobs, especially nontraditional employment and new employment opportunities for women …

Export processing zones build human capital in two ways. Previously unskilled workers benefit from job training and learning by doing. These benefits are limited, however, because most production is low skill and low tech. Still, workers earn income and learn industrial work discipline and routine.

In South Africa, unskilled and semi-skilled workers could find employment, gain experience and, in some cases, learn new skills. This could be a stepping stone to an improved quality of life and better paid employment in the future.

We have millions of unemployed people who desperately desire the dignity and income that arise from regular work. Most would be happy to start at the Chinese starting wage of $US 60 per month, but are prevented from doing so by our minimum wage structures.

Surely, if we apply our minds imaginatively, we can find a way of creating jobs for people with limited skills without jeopardising the legitimate interests of existing enterprises and workers. For many unskilled people the alternatives are a low-wage job or no job at all.

The DA believes that export processing zones have a role to play in giving hope, dignity and some income to large numbers of unskilled and semi- skilled people. Thank you. [Applause.] Mrs B M NTULI: Chairperson, Minister, Deputy Minister, hon members, during the state of the nation address in February this year the President committed Government to pushing back the frontiers of poverty and expanding access to a better life for all. We heed the call and take up the challenge. All South Africans are called upon to make their own contribution, however big or small. Let us start in the remotest corners of this country. It can be done if we are willing and able.

The Budget for 2003 represents Government’s commitment to fighting poverty and attaining a vision. Overall, the Budget gives priority to reducing poverty and vulnerability by extending the child support grant and increasing spending on the primary school nutrition programme. This remains a pro-poor Budget.

Let us remember that more than 40% of households in this country live in poverty. A large percentage of those poor people are African women who are found in rural areas that are deprived of basic services needed to maintain a minimum standard of living. According to Statistics SA poverty is prevalent in the North West, Limpopo, the Eastern Cape, Mpumalanga, KwaZulu- Natal, the Northern Cape and the Free State. Recent data has shown that women and children are the most vulnerable to the effects of poverty. Similarly, single persons and women-headed households are more frequently found living under the poverty datum line.

By now you are asking: ``How does all of this relate to the mandate of the Department of Trade and Industry?’’ I submit to you that the activities of the department impact on women’s participation in the economy. Notions of gender empowerment directly impact on poverty relief programmes. Government and the Department of Trade and Industry know what they have to do. They know what their vision is and what their target is. The Department of Trade and Industry needs to ensure efficient and accountable implementation.

In the ANC, we are of the view that the purpose of building the economy is to better serve the needs of all our people. In this regard, the DTI is charged with unlocking the economy, reducing the barriers of entry for black people, levelling the playing field and ensuring that all people are able to benefit from economic activities. There should be some reward for all rather than a reward for some.

The task of the DTI is not easy. We are not driven by a false illusion. Yes, some of the challenges to the economy are structural and are going to take generations of undoing. However, let us remember that we are a consistent, persistent and, most of all, determined people. We will not fail in our task.

The budget of the DTI is an important instrument in fulfilling our objectives of making the economy serve our people. The system of apartheid systematically and purposefully restricted the majority of South Africans from participating in the economy. A more punitive action of economic apartheid was the destruction of our movable and immovable assets. This continues to hamper our people’s participation in the economy. Our people have for generations been faced with racial legislation, exploitation, inequality and humiliation. We have to turn this around. We are turning this around. Halala DTI! [Congratulations to the DTI!]

We are aware of the challenges and we do not claim easy victories. We need to understand where we come from in order to understand why we need to bring about transformation in this country. The task of policy-makers is to see beyond that which is visible to the eye. On the other hand, visible successes of the DTI budget include co-operatives’ allocation of R3,5 billion for the next three years as a vehicle for job creation; Namac’s allocation of R62 million; Sawen’s allocation of R2 million for existing businesses; Twib’s allocation of R6 million; and Khula’s allocation of R5 million for business development.

In particular, we welcome the move by Namac to establish manufacturing advisory councils. We also welcome the continued support for Sawen. However, the challenge for Sawen is to reach out to rural women and ensure that they help them in their efforts to create jobs for themselves. We ask the Deputy Minister for that.

Economic participation is overarching and addresses racial and gender imbalances. The microeconomic reform strategy of the Department of Trade and Industry addresses the efficiency questions of implementation. The microeconomic reform strategy seeks to improve the realisation of South Africa’s potential in the underdeveloped part of our economy which is characterised by weak growth; declining investment and saving rates; low levels of investment in research and development; falling formal employment; and high levels of unemployment, especially among black people and women across racial groups. These characteristics of the South African economy highlight the challenges that the Department of Trade and Industry is expected to redress.

We need to ensure that strategies promote the development of industries in a sustainable and transformative manner, especially women’s organisations which need to be taken into account in economic decision-making. Equitable participation of women in the economy, especially black rural women, is a must, and a gender perspective needs to be integrated into all other policy processes.

An effective monitoring and evaluation framework that would address black economic empowerment, small business development, employment and the geographic spread of economic activities is long overdue. We therefore welcome the amendment of the national Small Business Development Act and the upcoming hearing on black economic empowerment.

Presentations by the COTII institutions highlighted the following information. The Industrial Development Corporation reported further progress in its efforts to promote small and medium enterprise development, as well as black economic empowerment. An amount just over R2 billion, which represents a 67% increase from the previous year, was authorised for the empowerment of 191 enterprises that are owned by black people. SMEs were the main recipients of IDC financing and accounted for 80% of the number of approvals, compared to 75% during the previous year. SMEs received just over R1,8 billion, which amounts to 37% of the total value of approvals. During the previous years, SMEs received just over R1 million, or 15% of the total value of approvals.

With regard to black economic empowerment and the promotion of SMEs, the IDC has strengthened its support to SMEs. Their focus is on employment creation rather than just transfers in its BEE activities. Most of all, let us remember that the IDC remains financially strong and has had a profit of R121 million for the 2002 financial year. Mr Minister, we are still struggling with micro business financing.

We also welcome the CSIR’s input into national strategy initiatives, including work on research and development; integrated manufacturing; performance measurement of the DTI; national human resource strategy; the Advanced Institute for ICT; as well as their ongoing involvement in SADC. In addition, we also welcome their involvement in community empowerment and poverty reduction, including activities in indigenous food commercialisation; wood silk spinning; accessibility for people with disabilities; and the Northern Province arts and crafts projects.

All the above programmes and subprogrammes contribute to the department’s objective of investment promotion; skills, technology and infrastructure development; the spread of economic activity; and the promotion of black economic empowerment.

I would like to pledge my support for the DTI budget with a quotation from Lao Tsu of China who, in the year 700 BC, said:

Go with the people. Live with them. Learn from them. Love them. Start with what they know. Build with what they have. And when the job is done, the task accomplished, the people will say, ``We have done it ourselves’’.

Zenzeleni ma-Afrika. [Africans, be self-reliant.] With God, everything is possible.

Siyabonga kuwe Ngqongqoshe nePhini lakho. Siyabonga kuMnu Ruiters nethimba lakhe. [Thank you, Minister and your Deputy. We also thank Mr Ruiters and his team.]

We acknowledge the success stories of the motor industry development programme, but we want to know how many jobs have been created.

Lastly, we welcome the opening of the DTI resource centre that is managed by Jali. We thank you for your kind support. We hope that more of these centres will open in the provinces. They are a valuable resource. [Time expired.] Thank you very much. [Applause.]

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, hon Ngiba will be making his maiden speech. [Applause.]

Mnu B C NGIBA: Sihlalo, Mongameli wezwe, Phini likaMongameli, boNgqongqoshe namaPhini abo, makhosi, malungu ale Ndlu ahloniphekile nomphakathi, basebenzi bomNyango wezoHwebo nezeziMboni, ngidlulisela intokozo yami kumongameli weqembu lami le-IFP ngokuba ngibe yingxenye yomKhandlu odingida izindaba ezibalulekile zale Ndlu ehloniphekile, nokuma phambi kwenu okokuqala namuhla. (Translation of Zulu paragraph follows.)

[Mr B C NGIBA: Chairperson, President of our country, Deputy President, Ministers and their Deputies, traditional leaders, hon members of this august House and officials from the Department of Trade and Industry, I would like to express my pleasure to the president of my party, the IFP, for affording me the opportunity to be part of the council which discusses the crucial affairs of this House, and to be able to stand here in front of you for the first time.]

In recognition of the vital role played by the DTI, the IFP welcomes the increase of some R338 million in its 2003-04 budget. We want to express our overall support for the Budget Vote 32.

The Minister and other speakers before me have highlighted certain details concerning the budget. I am not going to waste time. I would like to concentrate on two interlinked issues: job creation and the taxi recapitalisation plan. Since 1994 South Africa has had reasonable levels of economic growth, in the range of 2% to 3% per annum. Most economic analysts and commentators, however, feel that we need sustained growth rates in excess of 6% per year to effectively address deep-seated poverty among a very large part of our population.

The DTI has a very important role in job creation through its incentive- based approach. We welcome this approach. However, it would only be fair to point out that it has taken a long time for its benefit to feed into the real economy. The skills-based, knowledge-based and technology-based modern globalised economy requires DTI to do more on job creation. We can only hope for the sustained creation of new jobs in the coming quarter. Allow me to turn to the so-called taxi recapitalisation programme. The DTI claims that the plan will create new jobs in the motor vehicle manufacturing sector. That may very well be true as new, larger taxi vehicles take to the roads, but the story on the ground is completely different. Taxi operators tell us that they will not be able to afford the new vehicles. They tell us that the financing options being created by the banks and Government will be unaffordable, and they tell us that they will be forced out of business as a result. They also tell us that large numbers of operators and drivers will join the newly unemployed as a result of Government’s good intentions but unintended consequences.

The phasing out of the present fleet and the scale of the scrapping allowance are questionable. The question for the Minister is therefore simple: How does the stated intention of your department of creating new employment opportunities jibe with the possibility of net job losses in the taxi industry? I thank you. [Applause.]

Mr D LOCKEY: Chairperson, may I first congratulate the hon member on a very competent and eloquent maiden speech and wish him well here in Parliament.

Chair, the central theme in this debate has been the need for us to further address the issues of poverty, inequality and unemployment in South Africa. Today I wish to focus on one aspect in this debate and that is the need for a comprehensive black economic empowerment strategy. Secondly, I wish to address some of the key issues that are of crucial importance for the success of BEE. I also want to thank all those parties that have supported the Government’s black economic empowerment strategy.

At our 51st Annual Conference in Stellenbosch last year the ANC reaffirmed its commitment to comprehensive economic transformation in South Africa. It remains our vision that all our people must enjoy equitable access to opportunities and decent working and living standards. It can never be part of our policy, Mr Andrew, that we must transform South Africa into an industrial sweatshop, where our people are paid a hunger wage of R460 per month. This is certainly not the solution to address inequality and poverty in our society.

We realise that nine years after the transition to a democratic South Africa, our society is still characterised by pervasive racial and gender inequalities. If one looks at the Human Development Index, South Africa currently measures at 0,702. This is below countries such as China, Brazil, Columbia, Mexico and Russia. Between 1995 and 1999 the HDI declined from 0,722 to 0,702, that is one fifth of one percent, despite the many progressive social policies of our Government.

Clearly more must be done to increase the operational participation of black people in the economy. Until full participation by all our people is achieved, sustainable and productive economic development and the eradication of poverty will not be possible.

Section 1(a), the very first section, of our Constitution states that our democratic state is founded on the values of human dignity and the achievement of equality. These fundamental values will remain an elusive dream until we manage to create far greater levels of economic equity in our society. For as long as the vast majority of our people live on the fringes of the economy - and that R460 hunger wage will keep them on the fringes of the economy - this vision will not be realised.

The reality is that in South Africa today there are still large disparities in income distribution, in ownership of all classes of productive assets. There are still large disparities in human capital in the form of education and training, and in managerial and entrepreneurial experience. Black people, who comprise 89% of this population, own and control a meagre 2% of the market capitalisation of the Johannesburg Stock Exchange.

Given the extent of these systemic inequalities, we need redistributive strategies by Government to deal with this legacy. It is wrong to argue that South Africa does not need empowerment and that entrepreneurship can flourish under conditions of such vast inequality. Clearly the lesson of the past nine years must be that progressive social policies by Government are not enough to address inequality. Zimbabwe is a case in point - despite years of progressive social policies in health and education, the productive assets in that country remained concentrated in the hands of a tiny minority. We all know how sustainable that situation proved to be in the long run.

Economic empowerment is about the inclusion, as opposed to the marginalisation, of the majority of all South Africans. Black economic empowerment is about giving people the power and the access to scarce resources. It is about equipping them with the knowledge, the skills and the know-how to know what to produce. It is, finally, to equip them with the skills to trade and distribute products and services in a productive and competitive economy.

In business, access creates opportunity. Unless concerted redistributive strategies are employed to create such access, our people will remain on the fringes of the economy. They will remain what those opposed to transformation and empowerment want, namely the hewers of wood and the drawers of water. They will remain subsistence spectators, rather than active participants in our economy.

The recently published black economic empowerment strategy is a comprehensive policy framework aimed at increasing the productive capacity of our economy through the full participation of all our citizens. We believe that this strategy must ensure greater equity in income, wealth and the broadbased participation by black people in our economy. We believe that empowerment is, firstly, about the transfer of skills, and the acquisition and retention of equity by BEE participants. The fact that many high-profile empowerment deals have not succeeded so far is no justification for abandoning this approach. On the contrary, it must motivate us to deal with the structural constraints that have led to such failures.

We in the ANC also believe that there must be broadbased empowerment strategies, such as collective enterprises in the form of employee share schemes and co-operatives. We believe that as these objectives are realised, we will also increase the levels of investment in our economy. We will expand the productive capacity of our economy, as well as the consumption levels of our economy.

The Government’s support for BEE thus far has come through the utilisation of the regulatory capacity of the state, and there are very good examples in minerals and in the liquid fuel industry. The second support measure must come through leveraging the R130 billion of goods and services that the state procures on an annual basis from businesses. Clearly here is room for a lot more improvement to empower and assist black entrepreneurs.

Finally, it must come through the provision of economically viable funding models for BEE transactions. In our recent public hearings in Trade and Industry, the lack of a coherent and sustainable strategy to assist in the funding of BEE ventures was identified as a clear constraint. The threshold set by funds, for example the Isibaya Fund, of a real return of 10% above the inflation rate is clearly unattainable, unrealistic and punitive to the vast majority of empowerment deals. In the five years of the existence of this fund it only managed to spend R121 million, or roughly 1% of its R10,3 billion portfolio because of this unrealistically high hurdle rate.

The motivation for the Isibaya Fund was that it was the PIC’s contribution to social responsibility, by investing in infrastructure and empowerment transactions - despite the fact that this fund is only 3,5% of the total PIC portfolio of R297 billion. A social responsibility strategy by its very nature is a pioneering investment aimed at long-term benefits. The current approach by this fund militates against this objective.

Over the weekend there was a fund announced by Old Mutual, the J&J Fund. The expected rate of return there is 10% above the riskfree rate, so it’s an interest rate in excess of 20%. Clearly this is punitive and will not assist black economic empowerment.

The IDC strategy is a far more realistic approach. Over the past five years the IDC has assisted 521 BEE deals worth R5 billion. Last year alone 191 BEE ventures were supported to the tune of more than R2 billion. The IDC also began to focus on rural development and SME development. It spent R158 million in the last six months of last year on rural development projects. The IDC is also committed to reducing the initial financial contribution in empowerment deals from 10% to 2,5%, but to defer the dividend payouts until a 10% level of contribution by the BEE is achieved. It also started a fund worth R600 million through grant-funding by the EU Development Agency to further assist BEE. We need to see more of this kind of commitment to ensure that BEE in South Africa succeeds.

Finally, regarding the issue of the balanced scorecard, the drafters of the balance scorecard have gone to considerable lengths to ensure that all elements that support a broadbased BEE strategy are finely balanced. This is laudable, but the final test for the success of a BEE strategy must be the extent to which redistribution of assets has occurred. The current weighting in the balanced scorecard of only 20% to equity can create loopholes for firms not to commit to opportunities for black ownership in such businesses. The ultimate test for us in the ANC is the extent to which capital formation amongst black people can be assisted and promoted. I thank you. [Applause.]

The MINISTER OF TRADE AND INDUSTRY: Deputy Chairperson, may I thank the hon members for their contributions. As always, with an exception I will come to, the contributions of members in this House are designed to raise issues that we should consider, and also to highlight points which are important for us to take into account. We very much value this.

Let me address some of the issues raised by hon members that were posed more in the form of a question where maybe an answer will be useful.

Firstly, with regard to the financing of black economic empowerment, a number of speakers raised this matter. I think we should stress that there are a number of sources of financing for black economic empowerment. Many of us have quoted the figures from the Industrial Development Corporation, and those from the Development Bank of Southern Africa, the Land Bank and the National Empowerment Fund will complement these. In addition to that, you have the private sector itself which would come to the table on empowerment.

As we indicated in the strategy document, Government is quite confident that the amount of resources available potentially for empowerment is adequate, particularly since we have to accept, just as a matter of economic, financial and commercial reality, that to generate enterprises, to carry out the formation of new enterprises and to do transactions where assets may change hands does take time. It is not something that you can just do overnight, at once or in one big sweep. Therefore we need finance. As we indicated very clearly in the strategy, we have outlined a financial strategy that is compatible with, and indeed part of our growth strategy and our approach to macroeconomic stability in the economy.

Our view is very clear. We are very confident that the finance is available. Where there are certain problems - and hon Lockey has just touched on some of these - we have tried to fashion or shape specific products that address the real problems that do exist in the financial sector for empowerment deals. We have tried to address those.

The hon member Mr Smith indicated that maybe clothing was not taking advantage of Agoa. I am not sure whether that is right. It is doing pretty well. If you look at the brief document on the real economy, you will see what is happening, both with clothing and textile. There are representatives of the industry up there that you may want to meet afterwards. What is interesting is that South Africa is quite capable of exporting into the US and Europe, not only because of preferences. We can export in addition to the preferences, and I think we are doing well in that respect. There is quite a detailed report on the clothing sector in the booklet on the real economy.

Hon member Ben Turok raised some interesting points. We have also dealt with them in previous reports on the real economy where the productivity improvements in the domestic consumer industries are not that high. Our view probably has more to do with the slower growth of those industries in the domestic economy. Therefore your productivity performance, even on a de facto basis, is going to be lower. This has more to do with the shift that we are now trying to bring about of increased emphasis and equity of income and opportunity in the domestic economy so that we can begin expanding this sector.

It is for that reason that as Government we would not be that keen at this point to try to subsidise mass consumer industries. We need to drive the economy through creating economic opportunities and spending in the rural areas and urban areas so that incomes begin to rise. Then the productivity we know does exist in this economy will allow the consumer industries to come in behind that. We are already beginning to see evidence of this.

The attempts to speed up consumer industry development behind high tariff barriers have not worked. What we need to bring into place is a more equitable distribution of income opportunities and that, I think, will begin to help consumer industries more.

When we talk about creating employment, I really would urge all of you once again to go and have a look at the exhibit. You will see a lot of what we are talking about in practice on the value matrix. Let me give you one example that struck me. On the one side of the narrow corridor you will see South African nylon spinners making the thread and yarn for shoes. However, if you speak to the people there, they will tell you about projects we are now working on jointly to improve the capacity to create fabrics for ropes, for sails, etc.

When you look across the corrider you will see that one of our target areas is the yacht and boat construction industry. That is what we are talking about with the value matrix, providing the material and equipment of one industry that will go into part of another industry. Throughout that exhibit you will see many, many examples of this.

Hon Pheko indicated that, with regard to the Gats agreement and the WTO, Parliament would like to know what is happening. I think there are endless opportunities for that to be the case. As you know, South Africa always prepares its WTO position by having workshops, consultations, talks in Nedlac, etc. We recently put out adverts calling for inputs on that. There are many, many opportunities, and I urge you to make contact through the DTI website, and to have a look on the sixth floor at the recent progress in the WTO areas.

The hon Ngiba talked about job losses in the taxi industry. Hon member, let’s face it: We have a structural problem in the industry. The fleet is not renewing itself. There are many reasons for this. We cannot continue with an endlessly ageing taxi fleet, because that will also stop creating jobs. We cannot allow dangerous vehicles on the road. The taxi recapitalisation is not about destroying jobs at all. It is about reconstituting the industry so that it will be viable over time, and allowing it to bring in better and safer vehicles and, we believe, economically better vehicles.

Regarding the affordability, these are processes we are working at. We are obviously very conscious of the fact of affordability. The taxi recapitalisation, I must stress, is a once-off occasion for Government. This is not something we will do every five years. That means that the reorganisation of the route licences, associations and clarifying routes has to happen.

We do not believe that this is going to be something that automatically will lead to job losses. In fact, we believe that it is a stabiliser for the industry, which is very important indeed.

Hon member Rhoda made an important point, that despite all predictions to the contrary - and I would suggest as he suggested, despite many wishes to the contrary - the South African economy has grown consistently from 1994 onwards. It has grown consistently. In fact, its performance is good. If you take into account the structural issues that many speakers have raised, including yourself, and in the face of two major international currency crises, throughout all of that we have not stopped growing. This has an impact.

I would urge - certainly my department takes this approach - not to see economic activity as something to score political points on every five minutes. We think that this is something we should all be working on together. Every party, every member of this House, can play a constructive role. It is a pity, I think, that the Official Opposition never chooses to play this role. I will come to the suggestion made in a moment. It was the first time I ever heard a suggestion being made. [Interjections.]

This kind of gutter politics of allegations, smears, shouting nonsense and everything does not really help. All it does is marginalise the party and the economy. If they want to do it, that is their choice.

Let me come to the proposal of EPZs. I am quite happy to engage in this, but we have engaged in this for ages. If your analysis was correct, that it is cheap labour that people come to EPZs for, I would expect to see EPZs in Maputo, Walvis Bay, Cote D’Ivoire and Ghana employing people. They are not! I would urge you to read our analysis of this.

There is a profound change in the structure of the world economy. Nowhere in the world now are EPZs creating employment. They are just not doing it, because the days of cheap labour and jobs are long gone. They are long gone. [Applause.] Anyone who understands … [Interjections.]

China does not have cheap labour. It has highly skilled workers too. It has highly skilled workers. So if you go and look at Guangzoo and places like that, you will see that the wage rate is subsidised by the state. We cannot do that and neither can they for much longer. You will also see that the levels of education and skill are high. There are not in these Chinese areas some kind of unskilled worker and a machine. That is not what is happening at all. Go and look at a textile plant in China. Go and look at a clothing plant in China and see what is actually happening in the world economy, and then you will not make these clichéd little comments which you hope will rescue the economy.

I would urge you to meet some of the people in this economy. I urge you to read the book, because at the end of the day the economy is about real people working bloody hard. We should support them and not sit and snipe at every little thing that moves. [Applause.] Debate concluded.

THE IMPORTANCE OF FIGHTING CORRUPTION AT ALL LEVELS AND IN ALL SECTORS OF OUR SOCIETY AS A PART OF THE STRUGGLE TO CREATE A BETTER LIFE FOR ALL IN SOUTH AFRICA

                      (Subject for Discussion)

Mr P J GOMOMO: Deputy Chairperson, hon leaders of our political parties and hon members of Parliament, Ministers and Deputy Ministers, today we meet in this House to discuss one of the most critical and important matters that affect governance and the ability of Government to deliver on its development mandate. Corruption was not invented in our days. The fundamental texts of the world’s greatest religions bear testimony to this fact. Moses urged the people not to accept bribes because bribes blind the wise and make the one who speaks the truth mumble. The Qur’an also makes reference to corruption when it urges believers to cherish justice and not to sin by taking something that one is not entitled to. As old as these sayings are, so are the corrupt acts. It therefore gives me great pleasure to participate in such an important discussion.

Acts of corruption are inherently undemocratic. They involve the abuse of public duties contrary to the wishes of the electorate. In the past developing countries were always perceived as being corrupt, but recently developed countries with well-established democracies have come under the spotlight. Corruption is, however, more harmful to a developing country such as ours with limited resources and unlimited needs. It therefore becomes very important to use an institution such as Parliament to try to fight these evil acts.

It was, of course, in this very same building during the apartheid era that Parliament passed laws that denied the public access to information, thereby denying them an opportunity to know how public funds were spent. This, without any doubt, made it easy for corrupt acts to be committed and for the public to keep on guessing how severe corruption was during the apartheid era. Some of you sitting on my left actively participated in these actions of ensuring secrecy in the name of protecting the country. The same goes for those who would like to claim that they were just observers, for they did not do or say anything to stop such laws being passed.

The introduction of this democratic Government led to the drafting of the Constitution which, amongst other things, endorses and protects the right of the public to have access to information. Must I remind you that the Constitution I am referring to was written by the South African public, some of whom did not possess formal education, but understood democracy and its importance to development.

The ANC’s position is clearly articulated in our policy documents. Let me add that such documents are readily available to anyone who needs them. The ANC fought for, amongst other things, access to information; hence our Constitution endorses that Parliament and parliamentarians have a crucial role to play in setting an example of integrity, and in striving to hold Government accountable for its actions. We meet in this House to represent the interests of people who voted for us, as this is reflected in the policies we have passed for the past nine years.

The ANC has the political will, both inside and outside Parliament, to combat corruption. [Interjections.] Hon members must listen and stop mumbling. The ANC’s commitment is evident if one looks at the support we have given to adopting policies created to combat corruption, as well as the institutions for fighting corruption that Government has created since

1. Parliament can pass anti-corruption legislation, but it will be largely useless if the political will to use the legislation does not exist. Should I remind hon members that it was the ANC-led Government that introduced legislation geared towards financial reform, established a code of conduct and introduced transparent pay levels so that today you know how much our hon President earns? I wonder if you knew how much the former president earned during the apartheid era. All this is done to try to ensure transparency when using public funds, promote efficiency and effectiveness, and reduce the level of corruption.

The challenge of combating corruption will increase, given the rate of development in our country. In seeking to control corruption, Parliament must come to terms with the size and scope of modern governance and contend with the increasingly complex issues that globalisation has introduced into policy-making. Giving more powers and responsibilities to committees in the new democratic Parliament shows the commitment to good governance, a principle that the ANC fought for and still maintains. Committee meetings are open to the public and the media so as to achieve the fullest possible exposure, and committees have access to Government accounts, records and other documentation to ensure accountability in Government expenditure and the administration of programmes and services.

Complementing the work of Parliament are institutions such as the Office of the Auditor-General, the Public Protector, the Public Service Commision and many more that report to Parliament.

The complex role of Parliament in the budget process is the most important tool available to legislators who are seeking to counter corruption in a systematic and ongoing manner. The budget process sets spending and revenue patterns for all sectors of Government. To ensure an effective role for Parliament in the budget cycle, we engage in annual debates on the Government’s goals. Today we have a budget committee with a full complement of members, and this is a move which will have a very positive impact in combating corruption and ensuring service delivery to the public.

The biggest challenge lies ahead of us. South Africa’s complex economy has given rise to several forms of corruption. Our Parliament has members who are destructive critics, rather than constructive critics, people who find it hard and difficult to refer to the South African Government as their own. We always hear people saying ``your government’’ when asking the President and the Deputy President questions. It is as if these people are visitors or do not have the best interests of this country at heart. We obviously seem to have more spectators than participants, people who are looking for faults and not success stories. If South Aftrica is going to deliver fruitfully on its development mandate, such people need to make a paradigm shift.

The ANC is committed to the protection of the democracy we fought for. It will defend this democracy. We know how hard it is to live under an undemocratic government, characterised by secrecy and a lack of access to information.

Compliments should be given to the Government with regard to the work that has been done so far. The creation of institutions aimed at fighting corruption and strengthening democracy is a giant step towards a corrupt- free country. The recent launch of the country’s corruption assessment report by the Department of the Public Service and Administration and the Portfolio Committee on the Public Service and Administratrion is further proof of the commitment of this country to fighting corruption. This report is the result of a joint effort by the Government of South Africa and the United Nations Office on Drugs and Crime.

The report will serve as a baseline to measure progress in combating and preventing corruption. This report for the first time provides a comprehensive overview of the phenomenon and nature of corruption in South Africa, as well as the response to it.

In conclusion, let me take this opportunity to remind those who are quick to forget some of the good efforts of this Government in fighting corruption, and in doing that, let me also thank Cabinet, all Government employees who participated in any effort to combat corruption, and particularly the heroic policemen and women who have repeatedly refused bribes which are in excess of millions. They do all this in the name of good governance and service delivery.

The following are some of the highlights of Government’s performance in fighting corruption. The year 1997 saw the adoption of a code of conduct for the Public Service, and the establishment of an interministerial committee on corruption, tasked with the development of a national anti- corruption campaign.

The year 1998 saw a moral summit held by religious and political leaders, and the adoption of the code of conduct for leadership, as well as the Public Sector Anti-corruption Conference which adopted key points for fighting corruption in a partnership manner.

The year 1999 saw the national anti-corruption summit which adopted parameters for the development of South Africa’s national anti-corruption programme and the hosting of the 9th International Anti-Corruption Conference. In 2002 the Cabinet adopted the Public Service Anti-Corruption Strategy.

It is the responsibility of Parliament to ensure that all these efforts are well monitored for the benefit of the communities. The corrupt are running out of places to hide. I thank you. [Applause.]

Ms R TALJAARD: Colleagues, on 24 March this year Lord Falconer, Home Office Minister in the UK, had the following to say when introducing a tough new draft Bill outlining plans to simplify and codify corruption offences in his country, and I quote:

We need to be constantly on our guard against corruption. It is a complex crime, by its very nature insidious, and its effects stretch across international borders. Corruption worldwide weakens democracy, harms economies, impedes sustainable development, and can undermine respect for human rights by supporting corrupt governments with widespread destabilising consequences.

It is clear that globally in both the developing and developed world the anti-corruption drive is gaining momentum. This is the case in both the public and private sectors with corporate reform finally receiving the attention it is due. My colleague Dr Rabie will address these matters. An internationalisation of corrupt transactions and actors is well under way. Fortunately, so is the internationalisation of anti-corruption efforts and responses.

The renewed global focus on corruption is due, in part, to the new UN Convention on Transnational Organised Crime, adopted in November 2001, and the negotiations on the elaboration of the UN Convention against Corruption.

As is the case with global financial regulation in the wake of September 11, the world is fast becoming ever smaller in the global fight against corruption. These trends are all related and we are affected by it and must respond.

A recent country study of South Africa by the UN Office and the Department of the Public Service and Administration has revealed the discrepancy between the perceived levels of corruption in our society and the actual incidents of corruption. We must not take any comfort from this finding or use it as a basis to negate that there are continued challenges we face in winning the war against the scourge of corruption. This finding is but cold comfort and much needs to be done.

While the foundations have been laid, South Africa is still an anti- corruption construction site. The fight against corruption is a fight that must be waged on two fronts. We need to deal ruthlessly with incidents of corruption when and whenever they occur, but perhaps even more crucially, we need to combat the insidious and damaging perceptions of the levels of corruption that exist in our country as revealed by this study itself.

One can dismiss this by stating that there is, yet again, a large discrepancy between experiencing low levels of corruption while having a very high perception of its incidence. However, perceptions do matter. Perceptions move markets and motivate money-making decisions.

Only tough action and a zero-tolerance approach can address the perception problem in a meaningful manner. Moral equivocation will not do. This is the key challenge confronting our Government. For example, while the clouds of suspicion remain around the Deputy President, the Government’s moral regeneration campaign will face a credibility crisis and feed into existing negative perceptions.

In fighting corruption perceptions, it is imperative to act against high- profile leaders who fall foul of acceptable standards of conduct and into the realm of criminal proceedings. In these cases Government must show not only moral conviction - or, dare we say it, the moral high ground - but a steely-eyed resolve to act. Yes, always subject to the law.

We must act, even if this means speaking out against the behaviour of former struggle icons. It is here where the political will has been lacking. We must speak out when former Chief Whips have been convicted of serious offences and have held this House, and indeed the legal process itself, in utter contempt. We look forward with bated breath to the first ANC utterance of substance or consequence on this matter. All we have seen is prevarication.

We must speak out, indeed, as our Speaker has done, when Mrs Winnie Madikizela-Mandela’s conduct showed sheer contempt for this House. In this ongoing saga our Speaker has our unqualified support to bring this matter to a seemly close.

We must speak out againt the Tony and Winnie spectacle that has rolled across our television screens in our lounges. We must speak out, because their conduct does not hold court with principles of accountability or respect for this Parliament of the people. If we fail to speak out, our Parliament will be the first and primary victim of public derision of politicians, at great cost to our democracy.

We need a code of conduct and executive ethics, and a cooling-off period for members of this Cabinet and the previous cabinets - unfortunately we did not have it. We need clear and tough new sanctions for members of Parliament who breach their responsibilities in terms of codes. The Rules Committee has its work cut out for it in this regard, and we will work diligently with all parties in this House to craft appropriate sanctions.

The Portfolio Committee on Justice has been slaving away, crafting an impressive new Prevention of Corruption Bill which follows best international practice by unbundling or breaking down the concept of corruption, and reinstating the common law offence of bribery. This will constitute a significant improvement on the limp-wristed Corruption Act of 1992, and I owe the chairperson a word of thanks for including the elements I raised in my Private Member’s Bill to criminalise misuse of public office.

SADC and the African Union must deal with the challenges of corruption effectively. By any standard the SADC efforts have been more impressive than the country-specific efforts. The SADC Protocol against Corruption is a very important first step, but many member states are struggling to meet its exacting standards or to ratify it. We call on the AU and Nepad to expedite the draft African Union Convention on Preventing and Combating Corruption.

What is required across the globe are more uniform definitions of corruption and sanctions for corrupt behaviour, backed by mutual legal assistance instruments and extradition agreements to break the back of corruption globally.

However, all the legal instruments in the world will fail if we fail to act, fail to lead and fail to demonstrate the political will and courage to deal decisively with the scourge of corruption. This is where the key challenge for South Africa and this ANC Government lies and continues to lie. I thank you. [Applause.]

Dr U ROOPNARAIN: Hon Chair and hon members, at the outset we need to emphasise the importance of this debate. The prevention of corruption is a defining priority of the IFP. It is often said that corruption is worse than prostitution. The latter might endanger the morals of an individual; the former endangers the morals of an entire country.

Over many years corruption has served countless times as an illicit means of achieving wealth, obtaining privilege and securing and sustaining political and economic power. I am therefore tempted to say that corruption is part of the human condition. Corruption blatantly flaunts the rules of equity and justice, and thrives on profit outside the realm of law and economics.

Within the Southern African region, corruption is of growing concern as a developmental issue. For developing and underdeveloped countries, the economic consequences of corruption and the perpetration of organised crime are highly damaging to the political and economic systems. Corruption begins to gnaw the democratic system like a plagued rodent. Among the most significant problems caused by such criminality is a breakdown in the delivery of services to the poor and the deterrence of potential foreign investment.

Hon members, the phenomenon of corruption is like garbage; it has to be removed daily. Further, corruption delays the consolidation of democracy and restricts economic growth. South Africa also recently tabled the Prevention of Corruption Bill. This draft legislation tabulates corrupt practices and offences more comprehensively and spells out more than 20 offences and penalties. The Bill also seeks to punish the corruption of witnesses and to reinstate common law bribery.

The DEPUTY CHAIRPERSON OF COMMITTEES: Order! Hon members, please lower your voices. Thank you.

Dr U ROOPNARAIN: The current anti-corruption legislation is complemented by measures to enhance transparency to improve access to information. The IFP fully asserts, like many other commentators on corruption, that any serious attempt to deal with corruption needs to address the interrelated questions of leadership, transparency and accountability.

The presence of 12 agencies designed to detect, investigate and prosecute corruption - these agencies include the National Prosecuting Authority, the Auditor-General, the PSC, the Independent Complaints Directorate, the National Intelligence Agency, and the South African Receiver of Revenue Service - is proof that there is an expressed will and resources to fight corruption. Also, the media has not been coy in reporting corruption. The media is essentially fearless and has no inhibitions about publishing details of corruption and scandal, and running exposés thereof.

The country corruption assessment report released by DPSA and the UN Office on Drugs and Crime underscored the need for clearer, firmer and more exacting corporate governance legislation covering both the public and private sectors. The corruption report was the first of its kind and a lot of quantitative research went into it. It proposed workable ways to deal with corruption. It argued that a more structured approach to the problem was needed, along with accelerated public education programmes and the training of public servants charged with monitoring corruption. However, the report does acknowledge that the setting up of the formal blacklisting was already fraught with danger, not the least of which was the prospect of legal action by companies claiming that they had been wrongfully accused of bribery and corruption by vindictive officials.

The Government’s preferential procurement policies, seen to be a key to encouraging black empowerment, contained many pitfalls and indicated the need for strict supply-chain management in Government departments to ensure value for money. The report is highly critical of civil society, calling for civil society to play an active role in monitoring and preventing corruption, with trade unions not doing as much as they could, despite their widespread contacts and links with both the public and private sectors.

However, the question that I grapple and wrestle with is this: Is corruption as widespread as is often alleged? The report says that this was more a question of urban legend or perception, rather than of hard fact, and a great deal more research would need to be done to quantify the problem. Even so, it is disturbing to note that 62% of businesses agreed that bribery was becoming an acceptable business practice, with a further 90% of respondents agreeing that once a precedent had been set, a company was open to further demands. Corruption, however, is insidious, hence the need for watchdogs and whistle-blowers. Perhaps we need an oversight committee on fraud and corruption, a hotline with multilingual capabilities which operates 24 hours a day, seven days a week.

During the launch of the report, Madam Speaker spoke about a national ethics plan. The IFP would like to add its voice to this plan by advocating the following: the role of ethics in public life is changing. We need to see a new moral consciousness emerging, a kind of moral ecology. At the same time there is growing recognition that the private virtues of micro ethics that build character, like self-discipline, compassion, courage, honesty and faith, need to be fostered. However, the environment dictates that this list needs to include public values which often put profit ahead of principle.

Ethics are used to transform, domesticate and humanise power, but I would say ethics are synonymous to power. Also, too much focus tends to be placed on financial reporting. However, we need to look at matters such as labour standards, environmental impact, contribution to communities, quality of governance and corruption policies - not simply figures, but also facts.

The IFP is strongly of the opinion that the building blocks of any anti- corruption strategy must include the following: strong political will; effective anti-corruption legislation; provision of adequate law enforcement tools - not just paper justice, but translation into enforcement; provision of adequate human, financial and physical resources; and an independent skilled and corruption-free judiciary. Here I just want to add that the case of 200 police dockets missing is totally unacceptable and blatantly flaunts access to justice. There also needs to be an effective public education and awareness programme, a skilled and free media, and tougher sanctions for perpetrators.

Perhaps it would be fitting to end with something like this. It is a quote from 1864 and goes something like this:

I see in the near future a crisis approaching that unnerves me, and causes me to tremble for the safety of my country. Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of people until all the wealth is aggregated in a few hands and the Republic is destroyed.

This was said by Abraham Lincoln in 1864, and it is analogous to the corruption that’s facing our country. I thank you very much. [Applause.]

Mr A Z A VAN JAARSVELD: Deputy Chair, before 1994 there was a struggle by a people in this country: a struggle for their freedom, a struggle of a people that were deprived of their basic human rights, a struggle for human dignity and pride, a struggle for equality and fair opportunities, and a struggle to get hold of a better life for all in this country.

In general terms, 1994 epitomised laduma, a new, clean beginning, washed clean by the results of the will of the people. Today we need to ask ourselves whether the expectations of a new life brought by the reign of freedom have born sweet fruits of a better life for all in South Africa.

In his 8 January speech, the President condemned corrupt officials who deprived the poor of a better life. We need to ask ourselves: Is it a better life if a woman struggles for three years to get a pension? It is her only hope to be able to take care of her family, yet an official of the Government in that same department enriches himself by defrauding the department of millions of rands. Is it a better life when a hungry child goes to school, where the expectation of a piece of bread with peanut butter is shattered because the teachers feed themselves first, and steal the rest of the resources?

We do not have to go on quoting examples. We all know about these situations, and every member of this House could give at least one example of one or other incident where corruption adversely affected somebody.

I believe we should be very clear about the definition of corruption, and I want to use the definition of the new Shorter Oxford Dictionary that defines corruptions as follows:

1. Moral deterioration; 2. depravity; an instance or manifestation of this; perversion (of a person’s integrity in the performance of duty or work by bribery, etc); a change for the worse of an institution and a custom; a departure from a state of original purity.

This definition therefore describes corruption as behaviour, expecially by public officials, which ranges from perversion and moral deterioration to bribery.

During February 1999 a global conference on fighting corruption and safeguarding integrity was held in Washington DC. South Africa was part of this conference where the following declaration was made:

We are on the eve of a new millennium. As never before the world’s people need officials of their governments to serve them with unquestioned integrity. Corruption of justice and security officials especially betray this trust. Corruption can no longer co-exist with democracy and rule of law. Corruption misallocates resources, hurts the poor, and weakens the economies and societies.

We emerge persuaded that corruption is not inevitable. It is made by the actions of men and women. Governments and their people can act and can succeed in our struggle against it, if only we have will and determination to do so.

The New NP believes that this declaration should form the basis of our own approach to corruption. When we talk about corruption we immediately think of public servants who make themselves guilty of fraud, nepotism, bribery and theft, to name but a few. These terms are clouding the real issue of corruption, and are useful tools in the hands of irresponsible politicians who use incidences of corruption as a useful tool to score political points. Cheap political point-scoring does not contribute one iota to solving the problems of corruption.

It is unfortunate that several important issues are lost in an emotional debate that usually arises when corruption occurs. There is a wrong perception that corruption only relates to the conduct of public servants, whilst any other official, whether he or she is a public servant, a politician, a chief executive of a company, a lawyer or a banker, is capable of being corrupt. This has the effect that people think that it is the sole responsibility of Government to fight corruption.

The problem is that the focus is usually on the corrupt official, whilst we tend to ignore the person who offers the bribe, or the person who boasts about the way in which he has conned Minister Trevor Manuel with his tax return. Don’t people always brag about the contacts that they have to short- circuit the processes and procedures? Is it not a fact that a benefactor never really admits his or her role in the acts of corruption?

Although one must acknowledge the fact that corruption is not only limited to Government and the Public Service, we cannot deny that the perception exists that the organs of state represent corruption in South Africa. Therefore it is important to acknowledge the role of the Minister of the Public Service and Administration and the Public Service Commission in the effort to fight corruption.

The Public Service Commission embarked on a programme of improving professional ethics in the areas of risk management, monitoring projects, and promoting other projects. This is done in an attempt to promote a high standard of professional ethics in the Public Service; to engage in research and the monitoring of ethics practices; to promote a culture of risk management to prevent corruption; and to investigate remunerative work outside the Public Service in the health sector. Other projects include best practice on the implementation of the access to information Act, whistle-blowing and gifts; a survey of the efficacy of the code of conduct; implementing proposals on best practice regarding hotlines, as in the Eastern Cape; translating the explanatory manual into all official languages; and developing and presenting a telematic course on professional ethics. We can go on and on; there are quite a few more.

Furthermore, the Public Service Commission has already initiated anti- corruption actions to identify and eliminate weak management systems and inadequate controls; to conduct selected investigations to root out corruption; to investigate institutional and systems risks in the procurement and distribution of state medicine, and quite a few others.

In the final analysis, the responsibility rests with us. It is our task not only to combat corruption, but to fully take part in the process. Only then will we be able to unite in the fight against poverty. I thank you. [Applause.]

Mr J T MASEKA: Deputy Chair, hon members, corruption is rife in Government departments and parastatals, as it is committed by people in positions of trust. Corruption has a negative impact on the economy of the country. The confidence of investors witnessing such immense corruption is damaged. Corruption in some instances is committed by senior members in Government departments, as the punishment of people found guilty of corruption is not effective enough to send a message to would-be perpetrators that people found guilty of such crimes will be dealt with severely. The Scorpions and the Asset Forfeiture Unit were established with the intention to arrest corruptible suspects, and also to seize assets accumulated through corruption. What needs to be looked into by the Departments of Justice and Safety and Security is the manner in which some of these cases involving corruption by officials are being dealt with, as suspects are arrested and the next moment they are found not guilty, or acquitted. In some cases law enforcement agencies are not arresting individuals involved in corruption because of their political affiliations or the position the individual occupies.

The recent Public Service survey found that many citizens did not trust the police, and this will also strengthen the perception that corruption involves patronage and empowers certain individuals. People alleged to have committed corruption are sometimes suspended for a long time before their cases can be finalised. Sometimes when these cases are finalised, suspects are acquitted and they claim an immense amount of money, which also increases the burden on taxpayers. The Scorpions Unit should improve its method of investigating corruption, as many arrests are made, but many suspects are acquitted and then sue the Government for unlawful arrests and prosecution. The UDM further questions the manner in which these arrests are made. Suspects are shown on TV when arrested. They are shown on TV being arrested and taken in Scorpions vehicles as if they have already been found guilty, yet suspects in respect of other crimes are not treated in that manner.

The suspects suffer humiliation during these arrests. The family and relatives of the arrested suspects suffer humiliation, as they have to answer questions relating to the arrest of their family members. Children are traumatised by the arrests of their parents, because these arrests are televised. The next day these children will be asked many question by friends as to the reasons for the arrest of their parents. The manner and style of arresting suspects should be looked into by the Scorpions Unit so as to avoid the trauma experienced by the suspects’ families, relatives and children. Furthermore, it should also be investigated whether the many acquittals are not to do with relationships between members of the Scorpions Unit and the suspects, and whether corruption is not committed by members of the Scorpions, the prosecution unit and the suspect to make a conviction of the suspect impossible due to poor investigation and prosecution. I thank you.

Mr M R BALOYI: Chairperson and hon House, the international community is plagued by the demon of corruption which is an act of intentional committal, or an act or the neglect thereof, with the motive to obtain material gain from such an activity or inactivity. Such activity or inactivity always results in those involved in the transaction benefiting from the exchange at the expense of ordinary people.

We all need to internalise the obligation to fight the evil of corruption. This country and the world cannot afford a situation where we pass the buck to others to fight it on our behalf. We all need to soil our hands in dealing with this scourge. It does not matter how strong and capable some organisations and individuals are in concealing their own contribution to the prevalence of corruption. It does not matter how strategically located some organisations and individuals are, to claim no responsibility to fight corruption and only take the softer stance of acting as trumpet bearers on acts of corruption.

It does not matter whether a particular sector or level can claim a lesser contribution. The fact is that the buck stops with all of us as individuals, political parties, the public sector, the private sector and the broader civil society. It is a misplaced debate to waste time on point- scoring engagements in dealing with issues of corruption. Rather, we should embrace the strategies at our disposal to fight it. We need to fight corruption because it robs the people of the justice they deserve.

All corrupt activities that are taking place in the world do so in an environment where people are aware of how bad it is to indulge in or to be a victim of corrupt practices. It is for that reason that when the perpetrators are brought to book, the community celebrates the move, except for those who stand to benefit in a situation of total collapse of the system in the face of corruption.

All responsible individuals and organisations will emulate Allan Kaiser, a United States assistant attorney, who is quoted in the New York Times of 10 April 2003, after the conviction of four former Miami police officers on charges of conspiring, as having said:

This verdict shows that justice has been provided for the community and that this is another step in rebuilding the bond between the public and the police.

Corruption erodes the economic base for effective service delivery and it robs the poor most. Let us imagine what may ultimately become of countries in the world if the pace of corruption is not drastically reduced. There would be total chaos and complete destruction of the economy. Those in charge at private and public institutions will thrive at the expense of the disadvantaged poor. We cannot afford this state of affairs; hence we are fighting this scourge.

Corruption has the potential of reversing the gains we have scored as a people and a country. We have emerged as a people-centred and people-driven democracy. In talking about service delivery, we are putting people first, batho pele, and in the process of working towards the realisation of the people’s goal, we are placing the responsibility on all of us. We work as a team. It is for that reason that we are saying that even in the process of fighting corruption, all of us should be involved, because the contrary is that we all get hijacked into the scourge. We have worked so hard to build this democracy, and we cannot at any price compromise it because of corruption.

Once more, the buck stops with us, and all of us. In our endeavour to fight this scourge, we are also confronted with the challenge of answering all those role-players who would like to know how much corruption there is in this country and whether it is on the increase or decline relative to the past.

Several factors suggest that we should not make an attempt to answer this question, one of which is the fact that it is not possible to compare what you know with what is buried in the secretive history of apartheid books.

Today we can speculate about our standing in dealing with acts of corruption, because there is transparency, even in areas that are sensitive for the defence of the state, its people and the borders, such as the arms acquisition. In the past only a handful of apartheid masterminds would deal with such issues and the public would not know anything about it.

The second factor is that the past system could justify acts of corruption as long as they could sustain apartheid. Corruption was therefore acceptable as a normal practice.

The third factor is that corruption is a complex concept to define. This makes it difficult to talk in quantitative terms about how much there is or was. This point was also highlighted in the current country corruption assessment report that has just been tabled in Parliament as the work of the South African Government and the United Nations Southern Africa’s Regional Office on Drugs and Crime.

The former South African Public Protector, in giving his final decision when the Government was cleared of allegations of nepotism submitted by the then NP in 1999, warned that whereas there was no trace of corruption in the allegation, there was a need to tighten our dealings of governance so that not even the minutest manifestation of corruption should creep into our systems. This is another point to illustrate the complexity of the understanding of corruption.

The fourth factor is the fact that in the absence of factual evidence on corruption, the only prevalence indicator is perception, and this differs from one agent to another. In a situation where you have a hostile media, more acts of corruption are suggested to be taking place and the agents know that they are not compelled to provide details of their claims.

Some of those claims, baseless as they may be, are damaging to the state as they may scare investors. What is more frustrating is to realise that even those people who have taken an oath to promote the Republic of South Africa and to oppose anything that will harm it, like some hon members in this House, are part of the negative posturing of our country.

Our argument that it is complex and not advisable to try to answer some questions on corruption does not suggest that we are saying that there is no corruption in this country. We know it is there and that it manifests itself in different ways, such as bribery, embezzlement, fraud, favouritism, nepotism and other forms of corruption.

Furthermore, the fact that we have acts of corruption today does not suggest that the Government is doing nothing about the issue. It is known that, confronted with this scourge, the South African Government initiated a national anti-corruption campaign which culminated in a national anti- corruption summit and ultimately the anti-corruption strategy in the Public Service, as well as the establishment of the anti-corruption forum.

The fact that we are dealing with the fight against corruption and we want everybody to know about that does not suggest that we are complacent about our strategies and the actions we are taking. It is for that reason that we are continuously engaging with the topic, so that we keep it alive and keep on engaging with it, for it is an evil we need to uproot.

Our participation in the project of the country corruption assessment with the United Nations is an indication of the fact that we always seek to find a baseline position on the question of corruption. The report that has been submitted to Parliament should be understood in that context so that, based on it as providing a baseline position, we should, as individuals and as parties, always be alive to questions of corruption and seek to fight it. I believe the Portfolio Committee on the Public Service and Administration, after considering the country corruption assessment report, will lead a process to get Parliament to consider some practical steps to continue our fight against corruption.

A Bill is being considered so that we can strengthen our legislative instruments to fight the scourge of corruption.

In conclusion, we want to say that in our struggle against corruption: ``Hi ta twa hi rhambu ku tshoveka.’’ [We will succeed.] As the ANC we resolved at our 51st National Conference that we need to intensify the struggle against corruption, and we are prepared to make a call to all the people of South Africa that we should take the heat of corruption to the perpetrators, irrespective of who they are. The ANC is prepared to lead by example, and we mean exactly that.

In this context, we want to urge all members of Parliament that we should use our constituency offices to assist people to understand their effective role in the fight against corruption, because it is our responsibility, the responsibility of all of us. [Applause.]

Mr L M GREEN: Chairperson, bribery and corruption is as old as human history. One of the greatest lawmakers of all times, a prophet by the name of Moses, has the following advice on the issue of corruption. In Exodus 23:8 he says:

Take no bribes, for a bribe makes you unaware of what you can clearly see. A bribe hurts the cause of the person who is right.

A wise political leader and king by the name of Solomon has the following to say in Proverbs 28:16:

Only a stupid prince will oppress his people, but a ruler or king will have a long reign if he hates dishonesty and bribes.

He continues in Proverbs 29:4 by saying:

A just king gives stability to his nation, but one who demands bribes destroys it.

One of the primary objectives of a democracy is the establishment of an open and transparent society. A nation’s integrity and security is protected when clandestine operations or secretive deals are prohibited by law. Yet, it is not sufficient to have only these laws. The effective implementation thereof is what is required to manifest Government’s control over the affairs of the state.

We have the legislative framework to combat corruption in our country. The Access to Information Act, the Promotion of Administrative Justice Act, the Protected Disclosures Act and the Prevention of Corruption Bill are examples to show that we have the framework for an open and transparent society.

However, according to the recent Country Corruption Assessment report, there is a perception among the public that government is not doing enough to combat corruption. Within the public sector, water, electricity and housing are the areas cited where corruption occurs the most. Preferential employment, discrimination and nepotism are other examples cited where corruption occurs.

Corruption is a widespread problem which includes the private sector as well … [Time expired.]

Dr P W A MULDER: Mr Chairman, some Western business leaders come to the FF and ask our opinion before they invest in South Africa. I believe that when they come to us, they have already done their homework and merely want a final reassurance. The one question they all ask is: “Are you becoming just another African country?” When I ask them what they mean by “another African country”, they answer: “Corruption and political instability”.

They quote an American president who said about US aid to Africa: “I am tired of taxing the poor people in my country to send the money to the rich people in poor countries.” I then answer by quoting President Mbeki’s strong condemnation of corruption.

I am not aware of any other African country with a Scorpion unit that successfully fights corruption. I am not aware of another African country where the Chief Whip of the governing party could be found guilty and would leave Parliament, as has now happened in South Africa. They say that some politicians are discovered, but others are found out.

Dit beteken egter nie dat korrupsie nie sorgwekkend toeneem in die privaat- en openbare sektore in Suid-Afrika nie. As ek meer tyd gehad het, sou ek baie voorbeelde kon gegee het. Dit beteken slegs dat die owerhede nog nie opgegee het nie, maar dat hulle dit steeds beveg. Dit is die positiewe sy daarvan.

Mnr Chris Hani, die SAKP-leier, het in ‘n onderhoud met Beeld op 29 Oktober 1992 gesê:

Wat ek vrees, is dat die bevryders hulle as elitiste sal ontpop, in Mercedes-Benz’e sal ry en die land se hulpbronne sal gebruik om in paleise te lewe en rykdom te vergaar.

Mag dit nie bewaarheid word wat hy daar voorspel het nie. Slegs as ons hierdie geveg voortsit en wen, kan ons met eerlikheid aan buitelandse beleggers sê dat ons nie ‘n land is waar korrupsie heers nie. (Translation of Afrikaans paragraphs follows.)

[This, hoewever, does not mean that corruption is not increasing at an alarming rate in the private and public sectors of South Africa. If I had more time, I would have been able to give many more examples. It only means that the authorities have not yet given up, but that they are still fighting it. This is the positive side.

In an interview with Beeld on 29 October 1992, Mr Chris Hani, the leader of the SACP, said:

Wat ek vrees, is dat die bevryders hulle as elitiste sal ontpop, in Mercedes-Benz’e sal ry en die land se hulpbronne sal gebruik om in paleise te lewe en rykdom te vergaar.

May what he predicted there never come true. Only if we continue with this fight and win, can we say in honesty to foreign investors that we are not a country where corruption prevails.]

US president Abe Lincoln said on public administration:

I desire to so conduct the affairs of this Administration that if, at the end, when I come to lay down the reins of power, I have lost every other friend on earth, I shall at least have one friend left, and that friend shall be down inside of me.

May this be true of everyone in this House, of every public servant and of every individual, because then we might win this fight.

Mr P H K DITSHETELO: Chairperson, the current level of corruption, occurring in both the public and private sector, poses the potential danger of soiling or denting the image of our country as one of the notoriously corrupt states in Africa.

The relationship between public and private sector corruption is so intertwined that what happens in the one sector affects the other. This is explained partly as a result of the Government being a major player in the economy. The state spends enormous amounts as a buyer of goods and services from the private sector. This relationship explains the potential source of this corruption.

We have seen in the past, and continue to witness, how private companies lobby or use public officials to gain their favours. These favours come in the form of recommendations, as far as Government tenders are concerned, and in return for gifts or kickbacks. Some public officials are even promised shares and employment opportunities in the event of their political career coming to an abrupt end. It is this type of myopic thinking and mentality that drives our public representatives to commit such corrupt acts.

There is no reason why we cannot win against corruption. It is a challenge for every South African to ensure that perpetrators are brought to book. Many people are asking why there is so much corruption when we have the best specialist detectives and powerful agencies such as the Scorpions. We have always stated that some of the people involved in corrupt activities are well known but, because … [Time expired.]

Dr S E M PHEKO: Mr Chairman, the importance of fighting corruption at all levels and in all sectors of our society, as part of the struggle to create the kind of life for which some of our freedom fighters paid the supreme sacrifice, is a subject about which there can only be unanimity. This is the position of the PAC.

Corruption destroys nations. The DRC and president Mobutu Sese Seko have provided one example. This Parliament has its own share. We have said on many occasions that this country cannot advance and deliver the fruits of liberation for which our fighters lay down their lives if corruption is not rooted out of all society. This is part of creating a culture of clean government.

From the PAC perspective, a ruling party in particular must make its members and officials distinguish between three main political organs in a nation: the party, the Government and the state. A ruling party is not a nation. The Government of the day is the servant of all citizens of the country. The property and farms of the Government and state are not the property and farms of the ruling party. The jobs of the state belong to the whole nation. They must be available to all citizens of the nation, regardless of political or nonpolitical affiliation.

There are too many people today who have experienced how jobs, tenders etcetera are mainly being awarded on the basis of what party membership card a citizen holds. These things lead to corruption and inefficiency, where people are given jobs for which they have no proper qualifications. I have received many complaints about some of the matters I have briefly mentioned. Since I have the opportunity in this House, however, I want to mention one that is absolutely unacceptable.

The DEPUTY CHAIRPERSON OF COMMITTEES: Hon member, your time has expired.

Dr S E M PHEKO: Izwe lethu! [Our land!]

Miss S RAJBALLY: Chairperson, need we even say what reported cases of corruption have done to this regime? Our system of transparency has served as a strong measure of checks and balances. As a government of the people by the people, and having taken an oath to serve sincerely, it is hard to understand how persons and bodies would invest efforts into squandering state funds.

Poverty is eating at our economy. Many are dying of starvation. How can those committing fraudulent acts not be conscious of that? It is, however, uplifting to note the efforts taken by various stakeholders to weed out those taking part in corrupt activities that hinder our state and betray our people.

Temptation is the root of all evil, but how easily have we forgotten the suffering of our people under the past regime? How selfishly have we chosen to take what is not ours?

The MF supports all efforts to do away with those who have chosen corruption as a means of income. Corruption has been traced in various sectors, departments, institutions, private and public, which is horrific. Let us join hands and embark on a clean-up campaign to do away with these scoundrels.

The MF denounces corruption in all the forms this betrayal may take, and urges Government to bring these corrupters to justice. Thank you, Chairperson. [Applause.]

Dr P J RABIE: Mr Chairman, hon Minister, hon members, corruption is a very technical and complex phenomenon, and has the potential to destroy the very fabric of our moral and social value system.

A professor at a business school I attended, compared it with cancer, because corruption, bribery, unethical business practices and tender procedures can destroy the very norms and values that our social and economic interaction depends upon. A society in which corruption is rampant experiences unacceptable crime levels, there is economic stagnation and an exodus of skilled emigrants, and unacceptable erosion of business confidence.

September 11, 2001 created a new economic world order. The penalties for transgressing any internationally accepted commercial norm by an individual, state or institution is becoming harsher, because being blacklisted by international financial and political institutions can result in total financial ruin.

A direct result of this continuing globalisation is that all commercial transactions can be traced by means of paper trails. To hide hot money'', money obtained through money laundering, embezzlement, crime, drug dealing, etc is often deposited in so-calledtax havens’’, but it is becoming very, very difficult to launder these particular funds into the ordered structured economy.

Corruption in its many forms inhibits socioeconomic growth and erodes domestic and foreign investor confidence. It can also be a systemic threat to the currency of an emerging economy. Emerging economies in particular are vulnerable to corruption. We find that there is abuse of human rights, and the independence of the judiciary is often threatened. Where these particular social conditions are not met, we also find that corruption is fairly and often deceptively common.

South Africa is part of the SADC region. The allegations of bribery, assault and police harassment of the opposition in Zimbabwe, and the abuse of human rights in Swaziland are reason for concern, and South Africa, being the dominant major power, should do something about this. Corruption can pervade all spheres of public and private life. Politicians, buinessmen and public servants who accept bribes, influence and tamper with tender procedures, as well as deliberate tax evasion and the transgression of exchange control regulations create social conditions where crime, suspicion and poor governance prevail.

Rudolf Giuliani, the former mayor of New York, implemented the notion of zero tolerance for crime, He started with parking attendants - individuals who forced motorists to pay them when they washed their windscreens - with regulations against them. One of the outstanding features of the reduction in crime in New York and the recovery since September 11 was that the mayor, Rudolf Giuliani, surrounded himself with individuals in City Hall who were loyal, honest and dedicated, and who were appointed on ability and merit.

Corruption and greed pose a very serious threat to the South African society. Allow me briefly to mention the example of the Saambou-Tigon debacle, and the accusation of market manipulation and insider trading, which is often levelled at the directors of listed companies and is reason for very serious concern.

Let us not simplify or generalise this issue. It was recently reported that 50% of the new driver’s licences issued over the past two years were indeed fraudulent. Many new identity documents are false. The Department of Home Affairs is investigating alarming reports regarding illegal immigrants who were issued with fraudulent identity documents.

The effect of the Krion pyramid scheme in the Emfuleni Municipality was devastating. Allow me to mention that 9 500 people’s lifesavings were wiped away in a scam, according to the Business Day report, page 12. This is only the tip of the iceberg. Hundreds of thousands of South Africans have lost money through illegal pyramid schemes with promises of impossibly high returns on their investments.

Korrupsie is in sommige gevalle besonder gesofistikeerd. Volgens mnr Russel Michaels van die Raad op Finansiële Dienste word bereken dat minstens 50% van buitelandse beleggingsmaatskappye wat in dié land werksaam is, onwettig sake in die land bedryf.

Die Burger van 12 April wys treffend op die geval van Graves, Stanley en Peabody wat kwansuis in Gibraltar geregistreer sou wees en wat van hoë-druk verkooptegnieke gebruik sou maak. ‘n Legio van voorbeelde kan in dié verband gemeld word. (Translation of Afrikaans paragraphs follows.)

[Corruption is, in some cases, exceptionally sophisticated. According to Mr Russel Michaels from the Financial Services Board it is estimated that at least 50% of all foreign investment companies operating in this country are doing business in the country illegally.

Die Burger of 12 April makes a striking reference to the case of Graves, Stanley and Peabody who was supposed to have been registered in Gibraltar and supposedly used high-pressure sales techniques. Legion examples could be mentioned in this regard.] The CHAIRPERSON OF COMMITTEES: Hon member, your time has expired.

Dr P J RABIE: Baie dankie, mnr die Voorsitter. [Applous.] [Thank you very much, Mr Chairman. [Applause.]]

The MINISTER FOR THE PUBLIC SERVICE AND ADMINISTRATION: Hon Chairperson, members of this House, I’d like to start out by quoting what was noted in the resolution on the transformation of the state and governance at the ANC’s 51st conference. We proudly noted at the conference that there were certain things that needed to be done in terms of the consolidation of the democratic order that requires transformation of institutions of governance, as well as a whole range of other matters.

We also noted, and I quote:

That corruption is a social scourge that cuts across the public and private sectors, and society at large, and involves a transaction between at least the giver and the receiver. Corruption and unethical conduct pose a major challenge within the public, private and civil sectors and that wherever it occurs, it undermines the values and objectives of the national democratic revolution.

I would like to thank all those hon members, led by the chairperson of the Portfolio Committee on Public Service and Administration, the hon John Gomomo, who contributed constructively to this snap debate. When we speak of corruption, we don’t speak of a technicality. It is just that this cancer is not a technicality, much as it has been referred to so. However, we speak of it as we do of any other societal aberration or ill. Hence it is essential that we examine the behaviour of those involved within the context of broader society.

I think today we once again acknowledge that corruption is an emotive issue. However, it is critical that if we are to solve the problem, we must react not only emotively and emotionally, but objectively and scientifically. More than simply employing experts and strengthening the legislative and administrative frameworks, we need to look at the ethical framework within our society. I’m not going to go into that now, but I advise many members to look at the enlightening definitions of the words “ethic” and “ethics” in the Oxford English Dictionary.

I want to go further and say that corruption does not occur in isolated pockets within our society. It pervades all sectors, hence the challenge in fighting corruption is twofold. Firstly, we must ensure that we have the legislative and institutional frameworks that have the ability to expose and prosecute corruption effectively.

However, we also need to produce a societal shift and establish an ethical framework - a system of values that is shared throughout society, not for some but for all; where deviation from this set of values is clearly apparent and generally condemned by us; where the responsibility for maintaining these values rests with the entire society - the citizen, the government, the business community and the professional community with labour, management, buyer and seller; where organisations and institutions take responsbility for the wellbeing of the employee and the client; and where the employee or representative responds with loyalty, commitment, integrity and service.

To deal with corruption we need to know what we are fighting. We need to know where corruption is, who is involved, what is being done and what we can do to fight it. In the post apartheid era, as eloquently indicated earlier, achieving good governance and fighting corruption have become amongst the most important challenges for our country. Since 1994 we have attempted to march like a giant colossus against corruption.

I want to take us back to 10 November 1998 when our President, then the Deputy President, established the broad framework for much of the anticorruption work in the Public Service that was to follow. He said:

We need a culture of professionalism. We need political will and a shared commitment to fight corruption. We need transparency and accountability. We need clear rules of procedure. We need to institutionalise whistle- blowing. We need to reward exemplary conduct. We need managers to provide moral leadership, and we must always follow misconduct with disciplinary procedures. We must prioritise integrity and ethics training, and we must, as a rule, place public interest first.

Let me take this further. Our President, at the 51st conference of the ANC, sat in the commission on governance. ANC members in that commission said to the chair and the president: Comrade President, we need the confidence to be able to march with integrity, and the President stated there that we needed to take action through a conference resolution. The ANC is marching as a colossus, and those of you who want to march along, do so, because corruption is all-pervading and we can’t have spectators. It’s not a soccer match. [Applause.] So, indeed, we have come a long way towards achieving the guidelines that our hon President provided for this country, and particularly for the Public Service. Those who read the Country Corruption Assessment Report will see the great strides that this Government has made in realising this framework. You will also see the strides by business and you will see the attempts made by civil society. Only a die-hard pessimist will continue to deny the successes of this Government when it comes to fighting corruption.

Yes, there is much work to be done, both at the level of putting frameworks in place - such as legislation and a corruption management information system - and with implementation. We won’t argue about that because, after all, we are nine years into this democracy. As we speak, this Parliament has legislation before it on fighting corruption, and various law- enforcement agencies and departments are systematically rooting out corrupt businesses and officials.

Now, I can’t help but wonder about hon Maseka of the UDM. As he spoke, the following came to mind. There’s a socialist poet called Bertolt Brecht who wrote a poem called “Parade of the Old New”, and I quote:

I stood on a hill and I saw the Old approaching, but it came as the New. It hobbled up on new crutches which no one had ever seen before and stank of new smells of decay which no one had ever smelt before.

Brecht goes on:

So the Old strode in disguised as the New, but it brought the New with it in its triumphal procession and presented it as the Old. And the cry: Here comes the New, it’s all new, salute the New, be new like us would have been easier to hear if all had not been drowned in a thunder of guns.

Now, clearly, the hon member had either not seen or read this report. Mr Lewis from my office will deliver this report to him by tomorrow morning so that he can read that report and reread it so that he doesn’t speak the way he does. On the one hand he speaks with great confidence about perception and makes it reality. On the other hand, he says: Don’t let the Scorpions do what they’re doing because this, that and the other happens. You want the Government to instill confidence through the law-enforcement agencies, but for goodness’ sake, don’t let us see. It’s better if it’s done in the dark and under the blanket. We don’t do such things anymore. Well, nobody would like to do that.

So, yes, there is much work to be done at the level of putting frameworks in place, as I said earlier. However, I think we also should note - and I don’t want to make assumptions about anything - that only a few people, when reading the report, read it in a particular way. I was greatly disappointed. There were some who read the statistics in quite a sensational way. They read only the survey part of the Country Corruption Assessment Report. Maybe they did not have enough time. Then, not only did they only read that part of the report, but they also continued to quote it incorrectly and out of context with great confidence.

I think we need to move away from that. Let’s study the documents. It will help you in your constituency work. Maybe this is because the rest of the report is too rich in information or too taxing to absorb, or maybe it is just because some members will not give recognition where it is due as a matter of principle because that’s their principle. [Applause.]

Now let us look, for example, at the subject of management policies and practices in the Public Service. Let’s be more specific. The Public Finance Management Act put in place a framework and requirements that effectively fight corruption. That was before 9/11. Some people think the world was built from 9/11. It’s almost like post-Rubicon. It’s post 9/11. We did certain things even before then.

We acknowledged the impact of 9/11 globally, but let’s not frame our world in those terms. Let’s look at what we have done. This includes reforming our procurement system into a modern, fair and transparent system. The Act forces departments to do risk assessments and put in place fraud plans. It goes so far as to criminalise the inaction of heads of department who make themselves guilty of mismanagement. Even corrupt businesses are barred from business with the state. This was before 9/11, not post 9/11.

Look at what is being done to ensure that managers lead by example. Managers disclose their financial interests. They are subject to performance agreements. Their competencies are assessed, including their ability to act honestly and with integrity. When that doesn’t happen, it’s because we’re not applying it correctly. So let’s put blame where it should be placed.

Business and many specific sectors within business are doing their part. Some weeks ago the business sector of the National Anti-Corruption Forum presented data to the portfolio committee on its progress. I think that was three weeks ago. When looking at the results of the Country Corruption Assessment Report - the business survey - it is clear that many businesses are putting in place good corporate governance arrangements. This should be lauded, but it’s still not enough. Where there are still weaknesses in the relationship between Government and business in fighting corruption, Government is determined to address these whether directly with business or through the National Anti-Corruption Forum.

The detailed survey report, a summary of which appears in this report, will be the basis of this engagement. I look forward to our collectively implementing the resolutions on how to close the gaps identified.

I also want to add - and some members raised this, but sometimes you need to amplify something because some members here forget or don’t hear - that too often our information is based on hearsay. It’s based on a feeling rather than a fact. We heard a number of feelings today. What was true last week is not necessarily the fact today. So we need constant and consistent review of our progress, and assessment of what we are doing - the mechanisms we have in place.

Until now, information on corruption in South Africa has not been systematically collated and analysed. The common understanding of corruption is based mainly on various opinion surveys. That is what it is based on. In other words, it is perception-based. Now, we have never and will never ignore the fact that perceptions are important, but they are a problematic basis upon which to analyse corruption, because they are merely a reflection of attitudes and levels of confidence in the system.

The media has also been influential in emphasising the occurrence of corruption. At times, however, they have been sorely tempted to put less focus on the positive steps that have been taken to prevent and combat corruption. We are not saying they must not expose it. As a matter of fact, we have repeatedly stated the fact that only 8% of cases of corruption that were exposed came through investigative journalism. That is sorely problematic, and they can do better. What they choose not to say is that what they report is because of the mechanisms we’ve put in place in Government. We are saying that when you look at all these issues, also acknowledge and give credit where credit is due.

So have our perceptions become the foundation of our understanding of corruption? That is what the big question has been. One challenge which we acknowledge is that there is no central database of detected corruption incidences or cases, or of suspected corruption, or of studies of systemic weaknesses. Hence, we are working on that.

Therefore, when you study the research and analysis chapter of this report, you will note that most people interviewed through the surveys are unable to cite an example in which they were personally subject to corruption. Also, the perception surveys do not capture the extensive work which has strengthened departmental capacity to deliver services and to deal with corruption - the new internal management controls, etc. So, to overcome the gaps in our knowledge base, Cabinet has approved the Department of Public Service and Administration, my department, setting up a proper corruption management information system. This will allow us to produce and analyse data, experiences and practices from elsewhere in the region. We will be able to develop indicators to measure the effectiveness of anticorruption strategies. As Government we now intend to focus on relating experience to perception in order to make the measurements more meaningful.

The National Public Service Anticorruption Strategy identifies the collation of information as a priority. As a start, the Department of Public Service and Administration, with the United Nations Office on Drugs and Crime, commissioned four surveys for this report. They have been referred to earlier: a household survey, a business survey, a public administration survey and a client survey. You can read the rest about that. I’m not going to bore you with the details of that.

However, I want to say that the overall impression imparted by clients with regard to the services they’ve received was positive. That’s the overall impression. Then again, where it was not positive we must step in. More than four-fifths indicated that their cases were handled in a just, transparent and fair way. Satisfaction with service was significantly higher than that recorded in surveys among the general population.

This indicates that clients asked about the survey they received, and they are more positive than those who were asked about perceptions not based directly on experience. This, of course, has important implications. This has important implications for corruption surveys based soley on perception.

Let me just very quickly go on and say that I want to agree with all those who have said that corruption is dynamic in form and appearance, and the fact that the modus operandi changes. As one loophole is closed and controls are strengthened, corrupt persons and officials throughout society find other routes. The collated information and learning must therefore also be dynamic to meet these challenges. Anticorruption strategies and programmes must be continually improved and evaluated.

It has also emerged from this initiative that civil society lacks cohesion in its approach to corruption. Many civil society organisations make a positive impact on combating corruption. This can be seen in their contribution to policy discussions, research expertise, and monitoring, and their raising awareness of and assisting in keeping the issue of corruption on the public agenda.

However, in spite of their good contribution we believe they can do more, because we don’t want them to act as pit bull terriers only. They must also attempt to engage in this regard. This is welcomed by the public and private sectors concerning broader systemic approaches to combating corruption.

Another revelation of the report is that business has in place very sophisticated mechanisms to manage corruption internally. However, this sector cannot isolate itself in its initiative, because corruption is not only multifaceted, but also crosscutting in nature. Therefore, we urge business and other sectors not to operate in silence to combat and prevent corruption.

Government is committed to fighting corruption with all the mechanisms that it has and can develop and, as a result, we would like to work with the private sector to close the gaps where they occur.

I do want to say this afternoon that in spite of the good governance arrangements in place in business, we are experiencing various scandals, such as allegations around Galahad Business Solutions, and we note that every sector has its bad apples. This instance does not make the whole sector bad. If not, then why does the perception continue that corruption is rife in Government, as though it is solely there? Is it because we do not handle corruption internally, but are transparent? Is is because we decisively investigate and deal with corruption? Is it because we follow due process that respects our constitutional principles of fair opportunity and process? Is it because we don’t hide it and bury it internally, hence allowing those who want to go for one sector and not for another?

It is time for all members of this House to go into their constituencies and identify all those across the sectors who are abusing their positions and engaging in corruption, and to expose them. It is also time to stop using corruption as a political weapon, citing cases of Government officials who have been dealt with for their corrupt practices as evidence of a corrupt government. It is time to stop thinking in terms of them and us, but rather to stand together to build a national integrity framework.

Agb Mulder, ek het geluister na u - baie nou geluister. U het gepraat van wat besighede van die buiteland sê en vra of ons net nog ‘n Afrikaland is. Ons is inderdaad deel van die Afrika-vasteland, en daarom is ons vasbeslote om seker te maak dat ons ‘n raamwerk sal ontwikkel.

Ons het dit ter tafel gestel deur Nepad, wat daar vir die hele vasteland gaan wees, want ons wil ons geensins anders sien as in deel van hierdie vasteland nie. Ek wil egter graag saamstem met u dat ons almal moet saamwerk, en ek dink u positiewe woorde van wat u tereg gesê het, val warm op ons hart. Maar ons moet positief saamwerk, want ons kan nie soos diegene wat op die buitelyn wil staan, wel daar staan nie. (Translation of Afrikaans paragraphs follows.)

[Hon Mulder, I have listened to you - listened very closely. You have spoken of how businesses from abroad say and ask if we are only just another African country. We are indeed part of the African continent and therefore we are determined to ensure that we shall develop a framework.

We tabled it through Nepad, which will be for the whole continent, because in no way would we see ourselves as being something other than a part of this continent. I would, however, like to agree with you that we must all work together, and your positive words so rightly spoken, warm our hearts. But we must work together positively, because unlike those who only wish to stand on the outside, we cannot just stand there.]

So we can’t choose to characterise as some would wish - some in this House

• as rogues and a rogue gallery, because if you are part of the rogues’ gallery, why don’t you leave? [Time expired.] [Applause.]

Debate concluded.

                           EXPLOSIVES BILL

            (Consideration of Bill and of Report thereon)

There was no debate.

Bill agreed to.

CONSIDERATION OF REQUEST FOR APPROVAL BY PARLIAMENT IN TERMS OF SECTION 231(2) - SADC PROTOCOL ON EXTRADITION

                         (Draft Resolution)

There was no debate.

Southern African Development Community Protocol on Extradition approved.

         CONSIDERATION OF REQUEST FOR APPROVAL BY PARLIAMENT   IN TERMS OF SECTION 231(2) - SADC PROTOCOL ON MUTUAL LEGAL ASSISTANCE IN
                          CRIMINAL MATTERS

                         (Draft Resolution)

There was no debate.

Southern African Development Community Protocol on Mutual Legal Assistance in Criminal Matters approved.

CONSIDERATION OF REQUEST FOR APPROVAL BY PARLIAMENT OF NOTICE IN TERMS OF INTERIM RATIONALISATION OF JURISDICTION OF HIGH COURTS ACT, 2001

There was no debate.

Notice in terms of Interim Rationalisation of Jurisdiction of High Courts Act, 2001 approved.

  CONSIDERATION OF FIRST OF FIFTEENTH REPORTS OF STANDING COMMITTEE
                        ON PUBLIC ACCOUNTS -

                      ZOOLOGICAL GARDENS OF SA
                    WAR MUSEUM OF BOER REPUBLICS
                    SA HERITAGE RESOURCES AGENCY
                        BUSINESS AND ARTS SA
                   ENGELBURG HOUSE ART COLLECTION
                         FREEDOM PARK TRUST
                  PAN-SOUTH AFRICAN LANGUAGE BOARD
                       SA BUREAU OF STANDARDS
                   FINANCIAL AND FISCAL COMMISSION
                      FINANCIAL SERVICES BOARD
                     DEVELOPMENT BANK OF SA LTD
                                ESETA
                             MAPPP-SETA
                          COMPENSATION FUND
                                CETA

Mr F BEUKMAN: Chairperson, thank you very much for the opportunity to introduce these reports on behalf of Scopa. I first want to thank the two groups of Scopa which were involved with that. The main report is from the group of Mr Don Gumede, and I especially want to thank his group for their hard work, people such as Mr Billy Nair, Mr Laloo Chiba, Mr Pierre Gerber, Mr Nigel Bruce and others who participated in those resolutions. I also express thanks to the other group, led ably by Ms Nomvula Hlangwana and Ms Kereng Mothoagae, also for their hard work.

In terms of the new work method of Scopa there is a new categorisation of audit reports being referred to the committee. Those reports that are tabled today are the so-called category B and C reports. Those are reports that do not need a further interaction or hearing, but they are issues that we refer to the executive if, hopefully, they have been adopted by the House, for follow-ups and intervention, if applicable.

I would like to speak shortly to the most important issues before the House. With regard to the first report, dealing with Zoological Gardens, it was the opinion of the committee that there should be no hearing, but it is noted that the Zoological Gardens incurred a loss on investment held in a private bank which was subsequently placed under curatorship. Through the intervention of the SA Reserve Bank the loss was reduced to R60 000. The Zoological Gardens received an interim distribution of 44c in the rand on 8 April 2002.

Scopa recommends that the management make every attempt to recover the outstanding balance from the appointed curator and that funds be securely invested in future.

With regard to the second report dealing with the War Museum of the Boer Republics, there are no problems and we are of the opinion that no hearings should be held.

With regard to the third report dealing with the SA Heritage Resources Agency, the committee notes that sound financial statements submitted to the AG’s Office on 14 June 2002 contained several over- and understatements which were referred back to the management. These were subsequently adjusted and resubmitted on 26 July 2002. Scopa recommends that management avoid a recurrence of this lapse in 2003.

The fourth report of Scopa is the one on Business and Arts South Africa. The committee notes that the annual report was tabled in Parliament on 9 September 2002, thereby constituting noncompliance with section 65(1)(a) of the Public Finance Management Act. Scopa also in this case recommends that no hearing should be held.

The fifth report deals with the Engelburg House Art Collection, and the committee notes that due to the limited activities of this organisation, an internal audit department and audit committee were not established for the past two financial years. This is contrary to the provisions of the Public Finance Management Act, and Scopa recommends that management attend to this issue urgently and that the Auditor-General report thereon in his next report.

The sixth report deals with the Freedom Park Trust. Scopa notes that sound financial statements were only submitted on 12 July 2002 and not 31 May, as prescribed by the Public Finance Management Act. The committee recommends that management avoid a recurrence of this matter in 2003. Scopa recommends that no hearing should be held.

The seventh report is with regard to the Pan South African Language Board. The committee notes that the annual report was tabled in Parliament on 16 September 2002, thereby constituting noncompliance with section 65(1) of the Public Finance Management Act. Scopa also recommends that no hearing should be held.

The eighth report deals with the SA Bureau of Standards for the year ending 31 March 2002. Scopa notes with concern that accounts receivable are not followed up on a regular basis to ensure timeous recovery thereof. Sixty- seven percent of accounts receivable were outstanding for longer than 120 days, whereas the SABS’s normal repayment term is 30 days only.

The provision for doubtful debts is currently in excess of R10,5 million, which represents 49% of the total outstanding amounts and which seems unacceptably high to the committee.

The committee further recommends that the accounting authority furnish Parliament with a progress report on the above recommendation by 30 April 2003, namely that, in terms of section 51(b)(1) of the Public Finance Management Act, the accounting authority take effective and appropriate steps to collect all amounts timeously.

The ninth report deals with the report of the Financial and Fiscal Commission. Scopa notes with regard to the internal audit: that the Financial and Fiscal Commission received approval from the National Treasury on 22 October for sharing the internal audit function with the National Treasury, and that the internal audit function was not operational during the financial year under review because the National Treasury had obtained exemption until 30 April 2002.

Then there are certain matters raised by the Auditor-General with regard to the state of financial affairs with regard to the IT server network. With regard to the accounts, it is indicated that a net surplus of R422 000 has been earmarked for capital expenditure during the 2002-03 financial year. Also, the committee notes that the revamping of the FFC’s IT server network will take place in the next financial year.

The tenth report of the standing committee deals with the financial statements of the Financial Services Board. Scopa notes and welcomes the following aspects in relation to internal controls: that management maintains a comprehensive system of internal controls, including a risk- based system of internal accounting and administrative controls designed to provide a reasonable assurance that assets are safeguarded and transactions executed and recorded in accordance with generally accepted business practices and the board’s policies and practices; and that these controls are implemented by trained and skilled personnel with appropriate segregation of duties. It is also the opinion of Scopa that no hearing should be held.

The eleventh report deals with the Development Bank of Southern Africa. With regard to risk management, the committee notes that a risk management framework is being implemented for the entire bank, which will consolidate risk management, oversight to include all risk categories across all business and functional areas. It is anticipated that the framework will be fully operational during the next financial year. It is also the opinion of Scopa that the fact that the CEO indicated the extent to which external auditors of the DBSA provide consulting and other advisory services to the bank is welcomed. The twelfth report of Scopa deals with the Energy Sector Education and Training Authority or ESETA. With regard to the internal audit Scopa notes that no internal audit was conducted during the year under review. This is contrary to section 51(a) of the Public Finance Management Act. The committee notes, however, that an internal auditor was officially appointed only towards the end of the financial year and therefore was not in a position to conduct an internal audit. No hearing is recommended in that case either.

The thirteenth report deals with the Media, Advertising, Publishing, Printing and Packaging Sector Education and Training Authority, the so- called MAPPP SETA. A few problems are mentioned by the AG in his report, for example with regard to value-added tax. The committee notes that no proof could be submitted for audit purposes that reconciliations had been performed between the VAT 2001 returns and the VAT control account. Also, with regard to post-retirement medical aid benefits, the committee notes that disclosures have not been complied with in the MAPPP SETA’s financial statements for the year under review.

With regard to internal control, the committee notes with concern that there are certain shortcomings in MAPPP SETA’s internal control measures. The committee welcomes management’s assurance that the necessary steps will be taken to place the relevant checking and control measures on a sound footing.

The fourteenth report deals with the Compensation Fund. There are certain issues with regard to control that we believe should be given attention.

The fifteenth report of the Standing Committee on Public Accounts deals with the Construction Sector Education and Training Authority. We are also of the opinion that no hearing should be held in that case. Thank you, Chairperson. [Applause.]

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move that the first to the fifteenth reports of the Standing Committee on Public Accounts be adopted.

Reports adopted.

The House adjourned at 18:27.