MINISTRY OF TRADE AND INDUSTRY
14 September 2000
MEDIA BRIEFING
Appendix 1:
DEPARTMENT OF TRADE AND INDUSTRY
For Immediate Release 14 September 2000
PARLIAMENTARY MEDIA BRIEFING
The Department of Trade and Industry continues to work towards realising the objectives outlined in the President's State of the Nation address in February this year.
Transforming the South African economy is a daunting task. Government is committed to grow the economy to provide jobs for our people.
INVESTMENT INCENTIVES
Last week, we unveiled a new suite of investment incentives. These incentives are a result of Government's comprehensive overview of South Africa's position as an attractive investment destination guided by an extensive study of perceived impediments to Foreign Direct Investment and a National Enterprise Survey on Fixed Investment in South Africa.
The new incentive programmes increase the range of investments qualifying for incentives. The new Small and Medium Enterprise Development Programme (SMEDP), caters for assistance on an investment in qualifying assets of up to R100 million.
In addition, the SMEDP expanded the sectors eligible for support. New and expansion projects in manufacturing, tourism, certain business services, information and communication technology investments, high-value agricultural projects, agro-processing, recycling, biotechnology industries, aqua-culture and cultural industries may now be considered for assistance.
Another programme, Skills Support Programme (SSP) is a cash grant to the value of up to 50% of the costs of training new staff, resulting from an expansion or new project. The grant, which is paid on a performance basis up to three years, will be capped at 30% of the annual wage bill and requires an approved training programme.
The Skills Support Programme makes further provisions in the form of a capital grant for training equipment, and a facility to develop the content of and course materials for training programmes before training begins.
It is DTI's view that a number of South African Industries are poised far for growth. One of the sectors is the clothing and textile sector. Growing out of the Presidential Job Summit of October 1998, a Clothing and Textile Sector Summit was held on 29 August 2000 in Durban. The Summit followed a series of consultations and workgroup meetings spanning three months.
This Summit brought together government, business and labour in a partnership aimed at moving the industry in the right direction through identifying the challenges facing the industry and the steps necessary to grow local and external markets by improving market access and productivity.
The SADC Protocol on Trade, implemented at the beginning of this month and the opportunities presented by the U.S. Africa Growth and Opportunity Act, find the South African Clothing and Textile industry in a better position to utilise and access the benefits presented by these developments.
Among the achievements of the Summit, two new websites were launched. The websites provide information on the Southern African textile pipeline, a database of the industry and empirical market research data on all 14 SADC countries.
Other sectorial developments are increasingly positive. Over the last seven years, the stainless steel industry has grown over 13% per annum in fabricated products, more than twice the world average. The export of fabricated products show a growth rate of up to 40% per annum and now exceed domestic consumption. In a joint venture between government and industry new future targets have been set to initially treble the local conversion rate, which would see about 10 000 jobs being created. A considerable amount of momentum for this increase in local manufacture will come from the defense purchase off set programme.
The Mid-Term Review of the Motor Industry Development Programme (MIDP) for light vehicles has been finalised and was implemented from 17 July 2000. The extension of the programme until 2007 will provide the necessary policy stability and a platform for the industry's future planning.
Total industry exports in rand value terms increased by 46,5% from 1998 to 1999-an average annual rate of increase of 37% since 1995 when the MIDP was introduced. The expansion of automotive component exports has also been rapid with an average annual rate of increase of 31% from 1995 to 1999. Component exports continued their rapid expansion and increased by 22,5% to R9,674 billion from the R7,9 billion in 1998. Growth during 2000 is expected to continue and projected to be in the order of R11 billion.
The successes in these sectors area a result of forging relationships between all stakeholders to come together to improve production costs, efficiency, quality and service.
The process of, the restructuring of the Department continues. We anticipate completing the process by March next year. We have appointed two new Deputy Director-Generals, with a third appointment anticipated soon.
LOTTERY AND GAMBLING
After consultation with relevant Ministers, the distributing agencies for the National Lotteries Distribution Fund are being formed. The regulations will be published in early October. In the interim the National Lotteries Board will effect an early disbursement of grants to charity institutions who face problems as a result of the termination of other lotteries.
The Department and the National Gambling Board issued a draft Request for Proposal for a Central Monitoring System for limited payout machines. The final RFP will be issued during the first week of October 2000. The entire tender and adjudication process for the appointment of the systems vendor should be completed by the end of January 2001. Given this timeline, an operator should have the system operating in one province in a test basis by March 2001.
The Department has established an implementing inter-provincial working group for the consolidation of all the comments received from the Members of the Executive Councils with regard to the National Gambling Amendment Bill, 2000.
The National Gambling Board is currently involved in negotiations with the office of the National Director for Public Prosecutions and the Commissioner of Police to establish a national task team to focus solely on illegal gambling. The National Gambling Board is also engaged in a process of formulating a comprehensive national policy on problem gambling.
The Competition Act 89/1998 came into effect on 1 September 1999. The experience of the competition authorities in working with this act and implementing it in practical terms has necessitated the proposal of certain amendments to the existing legislation.
COMPETITION AMENDMENT
The crux of the most recent proposed amendment to the Act revolves around the clarification of the jurisdiction of the competition authorities. Recent decisions of the High Court and the Supreme Court of Appeal have resulted in an interpretation of the Competition Act, which detrimentally limits the scope of the competition authorities' jurisdiction. The proposed amendments to the act have resolved this issue by stating that where there exist other regulatory authorities who have been granted jurisdiction to deal with matters that are also dealt with specifically under the Competition Act (such as abuse of dominance, restrictive business practices and merger control), such jurisdiction is to be exercised concurrently with that of the competition authorities.
Another issue of particular importance that is addressed by the amendment bill is the issue of merger control, and the setting of appropriate merger thresholds. It has been proposed that the Minister should have more flexibility in terms of how often he is allowed to reconsider existing thresholds (at the moment he can only change theme every five years). These thresholds are vitally important since they determine which mergers are, or are not scrutinised by the competition authorities. A consequence of this amendment is that a new category of 'small' mergers has been created. These mergers are those that fall below the lower threshold and are not subject to compulsory notification to the competition authorities.
A crucial development in the implementation of competition policy this year has been the setting up of the Competition Appeal Court. Appeals from the decisions of the Competition Commission and Competition Tribunal are heard in this forum. The court came into operation officially as of 1 September 2000. Since this court acts as a specialist court it is anticipated that the judgments handed down by the Competition Appeal Court will contribute to the creation of a rich jurisprudence of competition law.
SOUTH AFRICAN COMPANIES REGULATORY OFFICE
The South African Companies Regulatory Office (SACRO) experienced severe backlogs during the first few months of this year. This was caused by various factors like systems problems, the year 2000 changeover, implementation of a new system, re-hosting from the mainframe environment, network and hardware failures, staff shortages and excessive volumes of applications received. As a result the registration of new enterprises and amendments to existing enterprises were delayed significantly.
The bulk of these problems have been resolved. This has resulted in most backlogs being almost fully eliminated and the remainder systematically being brought down. The turnaround times for registrations and amendments have significantly improved and further improvements are expected in the next few months.
Similar changes are being effected in the Patents Office where applications have grown from 12000 in 1998/1999 to 56000 in 1999/2000.
SADC PROTOCOL ON TRADE
The implementation of the SADC Protocol on Trade is a significant milestone in the creation of a strong integrated regional economy. The SADC trade protocol aims to promote optimal economic growth and development in the region.
In the immediate term, the South African producers will benefit from greater cooperation between customs authorities in procedures and monitoring of trade in the region. In the long term, a strong regional economy will increase the competitiveness of the region by improving production costs, efficiency and technology transfer. All these hold great significance to improve exports to international markets and in making the region more attractive for foreign direct investment.
Southern African Customs Union (SACU) negotiations have made a breakthrough on both the revenue sharing formula and the institutional arrangements.
We continue to work towards creating equity in multilateral institutions for the benefit of South Africa and other developing countries. Our efforts to open new market opportunities for our producers are continuing. We are engaged in talks with Brazil and Mercosur, India, Nigeria, and others to strengthen our trade relations.
South Africa, for the first time ever, is hosting the International Textile Manufacturers Federation from 23-27 September 2000 in Cape Town. South Africa is hosting the conference. The conference is to look at the global challenge of the textile industries.
INTERNATIONAL EVENTS
> From 5-7 October 2000, the Department is hosting the Global Summit of Women 2000 in Johannesburg. This Summit is celebrating a decade of women's economic leadership worldwide. This will be preceded on the 4th October by an African Women Exchange, which will give women from Africa an opportunity to exchange strategies and create networks and joint ventures.
As it is Africa's turn to present the World Congress, the Department is hosting the 16th World Consumer Congress, "Consumers, Justice and the World Market" in Durban from 13 to 17 November 2000.
For further information, visit the Department of Trade and Industry website wwdti.pwv.gov.za
Issued by GCIS on behalf of the Department of Trade and Industry