Postal Service Amendment Bill: hearings

Meeting report

SELECT COMMITTEEE ON LABOUR AND PUBLIC ENTERPRISES
21 October 2003
POSTAL SERVICE AMENDMENT BILL: HEARINGS

Chairperson: Ms Nkuna (ANC)

Documents handed out
Postal Services Amendment Bill [B40-2003]
Submission by DHL
Submission by Private Parcel Industry and South African Express Parcel Association
Private Parcel Industry Action Group: Part 1
Private Parcel Industry Action Group: Part 2
Private Parcel Industry Action Group: Part 3
Private Parcel Industry Action Group: Part 4
Private Parcel Industry Action Group: Part 5
Private Parcel Industry Action Group: Part 6
A presentation by the department
The Banking Council
The Jewellery Council of South Africa
ABN-AMRO
Deutsche Securities
Diamond Dealers Club

Summary
All the proposed amendments by private sector stakeholders were rejected because the Committee had already been through the Bill adoption process. However the Committee encouraged the private sector to continue consultations with the Department and the Postal Service Regulator. At the heart of discussions was whether courier services should constitute part of the postal service. DHL's submitted that since the stated objective of the Act was to provide only for regulation and control of basic postal services in the public interest, the Bill had no reason to provide for the regulation of value-added delivery services like courier services, because these were regulated by market forces andr other legislation.

Minutes
The Chairperson pointed out that the Bill has been tabled before the Communications Portfolio Committee and then the NCOP Committee. She noted that the Bill has been finalised at the Committee level and had been sent back to the National Assembly for a plenary debate. However, there had since been specific concerns raised by the DHL, the SA Parcel Association and the Private Parcel Industry Action Group, the Committee was sitting to hear those concerns.

Mr Setona (ANC) categorically stated that the Committee was not opening discussions on the fundamentals of the Bill, but only on specific issues raised by the private sector stakeholders.

Submission by DHL
Mr Wilson (Legal representative for DHL) pointed out that the critical issue was whether courier services constituted part of the postal service, particularly in the light of the Supreme Court of Appeal decision in Interlink Postal Courier SA (Pty) Ltd v The South African Post Office Limited. He pointed out that Judge Maria for the majority decision, noted that "a critical element of a courier service was actual delivery of an item to a named intended recipient or the intended recipient's authorised agent to accept delivery, as opposed to leaving the item at the named intended recipient's supposed address. Hence certain provisions which referred to a "courier service" had to be deleted from the proposed Bill because its objective was to provide only for the regulation and control of basic postal delivery services, and not the value-added delivery services like courier services.

Paragraph 2 of Schedule 1 seemed to refer to both value-added "delivery services to a person", on the one hand, and basic "delivery services to a place", on the other hand. There was possible confusion in the language used in that paragraph, for example, using the phrase "directed to a person" as opposed to "delivered to a place". Hence he proposed that the former be deleted and the latter be inserted so that conceptually there would not be tensions in the interpretation of the Act.

Furthermore, reference to "courier service" in clauses 22 and clause 30(5) of the Bill ought to be deleted. He further proposed that the definition of a "courier service" in clause 1 be deleted, as it did not fall within the ambit of the Bill because courier services were dealing with value-added services.

In short, DHL submitted that since the stated objective of the Act was to provide only for the regulation and control of postal services in the public interest, there was no reason for the Act to provide for the regulation and control of value-added service delivery like courier services, particularly given that the latter was regulated both by other laws as well as market forces.

Joint submission by the Private Parcel Industry Action Group and SA Express Parcel Association
Mr Du Preez pointed out that the industry supported the principles underlying the Bill. However, the submission proposed certain amendments which would clarify implications and allow the Legislature to give effect to Government's stated intention. They recommended:
- that the proposed amendment by the Department be revisited to ensure that the exclusive rights of the SAPO relating to a basic letter service, as defined in SAPO's license, was demarcated clearly not only in section 16 but also in schedule 1;
- that the services provided by couriers that were not reserved were clearly demarcated;
- that a definition of a courier service, modelled on that provided by the Court, be incorporated into the Bill in a suitable section after consultation with the stakeholders.

The Chief Whip of the National Council of Provinces requested the Committee to adjourn and reconvene after the Plenary because the Motion on the Bill was before the National House.

After the Members returned, the Chairperson noted that the National Assembly had adopted the Motion and it had been referred to the Committee for further consideration.

Discussions
Ms Ntwanambi (ANC) pointed out that the Committee has debated the Bill and it has gone through the formal voting process. She then asked the stakeholders to lead the Committee through the process that had to been followed by the Department to effect the proposed amendments.

Mr Setona (ANC) also noted the Committee welcomed the submissions proposed by the industry but the integrity of the Legislative institution had to be taken into account. The Bill arose from a specific policy trajectory and a process of consultation had already taken place. By allowing the proposed amendments, the Committee would be setting an unwise precedent because the Bill had already been passed. He thought the industry submissions touched on the fundamental issues of the Bill and it would be reckless for the Committee to make further amendments. He advised the stakeholders to continue consulting with the Department but the Committee would proceed to pass the Bill.

Ms Nzimande (Deputy Director-General) responded that the Department had to ensure that postal services were affordable to low-income households. Hence the Department had to strike a balance between the interests of the poor as well as those of the industry. The proposed Bill was in line with international legislation because South Africa was a member to the UN Postal Service Union that governed universal postal services. In Germany, the Postal Act of 1998 allowed for a statutory exclusive licence to the Deutsche Post ,more specifically in value added services.

She then outlined the policy determination process which lead to the proposed Bill:
- 1997: A Green Paper on Postal Policy was published for public discussion;
-1997 - 1998: The Department held public consultations;
-1998 (June): A White Paper on Postal Policy was published and it culminated to the proposed Bill.

The amendment to clause 16(5) of the Bill was intended to bring the Act in line with the stated national policy and to remove the confusion around licensing and registrations. There would be no threat to business activity.

Mr Wilson (DHL) asked, if the intention was to regulate the private sector, what consultations had taken place with the Competition Commission on issues of concurrent jurisdiction. Furthermore, if the courier service was going to be part of the postal service, what would be the constitutional implications of deleting clause 16(5)?

Ms Nzimande pointed out that a process of consultation was taking place with the Competition Commission and the Postal Regulator. However, the manner and the process of regulation was going to be deterrmined by the Postal Regulator. She then invited to DHL to take part in that consultative process.

Mr Du Preez (Private Parcel Industry Action Group) pointed out that the industry supported the policy trajectory behind the Bill. However, the form and the manner of regulating the industry still needed to be further discussed. The industry did not want to find itself operating illegally and therefore it was requesting clarity on the laws within which they had to operate.

Mr Setona (ANC) pointed out that he welcomed the sentiments raised by the industry but it would be unfair to expect the Committee to make amendments at this stage. However, consultation could take place at other levels.

The Chairperson proposed that the meeting be adjourned for ten minutes to make the necessary recommendations.

After the adjournment, Mr Wilson (DHL) pointed out that they were not saying that the industry should not be regulated, but were asking what public interest or greater good was achieved by regulating courier services. Courier services were not about universal service, but about value-added services.

Ms Nzimande pointed out that the propositions made by DHL fell within the realm of the Postal Service Regulator. Again she invited DHL to take part in that process.

Mr Setona (ANC) noted that as the lawmakers, they were guided by certain issues, taking into account the converging socio-economic challenges. Hence they were not prepared to discuss the constitutionality of the proposed Bill.

Mr Wilson (DHL) referred to clause 22 of the Bill and asked why the industry had to be regulated in relation to those issues: "why did it matter that a client should receive a product by one o'clock of the following day?". The Bill was about basic service delivery. However, if it was about consumer protection, that had to be spelled out clearly in the Bill.

The Chairperson proposed that if there were further issues with regards to the Bill, they had to be raised through the Department.

Mr Nogumla (ANC) concurred and pointed out that the legislative process was a continuous process. He encouraged the stakeholders to continue consulting among themselves and if they wanted to propose further amendments, they could do so through the Department.

The Chairperson thanked the stakeholders for coming to the Committee to raise their concerns. Further amendments could be made through the Department and the Postal Service Regulator.

The meeting was adjourned.