Master Plan for the Steel and Metal Fabrication Sector, with Minister

Meeting report

The Committee Chairperson was unable to connect to the virtual platform. The Committee elected Ms J Hermans (ANC) as the Acting Chairperson.

Opening remarks
The Acting Chairperson presented the agenda and invited Minister Patel to make his presentation on the Steel Master Plan.

Briefing by the Minister of Trade, Industry and Competition (dtic), dtic and Steel Industrialists
Opening remarks
Minister Ebrahim Patel was pleased to unpack the Master Plan for the Steel and Metal Fabrication Sector for Members of the Committee as it was an important aspect of the Master Plan programme of government. The past number of months had seen a focus on getting the economy moving to a higher plane and so it was fitting for him to be given an opportunity to unpack the Steel Master Plan.

He stated that steel was critical in any industrial country. Not only was it important as the industry made the products used in the country but the industry also made the products that made the products. Many countries strived to have at least a basic steel industry and a high level of sophistication in downstream steel industries to ensure that the country was able to produce essential products. That was why steel was a big part of economic thinking across the world. Many of the newly industrialised economies had invested very heavily in steel over the past decade.

In the case of SA, the steel industry was an important user of the iron ore produced in the country in quite significant quantities. The steel industry had been impacted fairly significantly by the domestic and global challenges that had faced the industry throughout the value chain. In SA, upstream steel production had been produced by ISCOR, a state-owned company and supported by the Industrial Development Corporation (IDC) but ISCOR had been privatised many years earlier. For some decades now, SA had had a privately owned steel value chain but steel was still the biggest sector in manufacturing and accounted for a large number of jobs and was a very effective multiplier. Steel created wealth and enabled wealth across the economy.

Global context of steel
The steel industry globally had to deal with global over-supply, climate change, volatile prices and significant government interventions in the steel industry. Across the world, primary steel was in oversupply on aggregate, although there might be shortages in niche markets. One explanation offered for the oversupply was that when the world went into the big global crunch in 2008, China had invested very heavily in infrastructure, which had kept global demand buoyant. However, that was done on the back of an intensified steel-making capability in China and when the infrastructure programme had started to level out, China still had its enormous steel-making capability. In the G20, unusually for a manufactured product, all the steel ministers, including the South African Minister, had formed a committee of steel ministers. It was the only product in the world that was receiving such attention and had led to very significant trade tensions. The US under then President Donald Trump had used extraordinary security measures to protect the steel industry in the USA. The argument was that the US national security and military industrial complex was dependent on a supply of steel and the global oversupply could destroy American industry and leave America vulnerable as an importer of steel for key parts of the economy as well as the military industrial complex. Presidents and prime ministers became involved whenever there was talk of a steel mill closing in a country. The allegation was that there was very strong government involvement in and support of the steel industry.

In respect of climate change, steel was a sector that was “hard to abate” because it used enormous quantities of energy 24 hours a day.” The SA government had introduced a temporary shield of trade protection while it developed the steel industry in the country. The aim of the Steel Master Plan (SMP) was to bring partners together to bring about a conversation of what each partner could do. Each partner had a different aim: business wanted returns for shareholders, trade unions were looking for jobs, government was looking to build the economy and improve employment rates. It had to be noted that Africa was largely an importer of steel: that was an index of Africa’s underdevelopment. He had recently returned from a visit to Nigeria, Cote d’Ivoire and Ghana with the President and had discovered that those countries were looking at developing their own steel capacity. The countries in Africa with relatively large steel industries, by comparison with other African countries, were Egypt and SA. The advantage in SA was that the steel industry also used local mineral resources and so was a driver of beneficiation.

The Minister had met with all players and a huge challenge was that one producer supplied everyone else downstream and the industry was at war with itself. He had informed the industry that government could not listen to arguments about various players but was willing to become a partner in the rejuvenation of the industry. The Minister had appointed Dr Bernie Fanaroff as a facilitator of the steel industry. Discussions had led to a set of agreements about how to go forward and those agreements had been incorporated in the Steel Master Plan that had been circulated to Members of the Committee before the meeting.

The Minister explained that when he had been given the opportunity to present the Plan to the Committee, he could have done it himself in the traditional way, but government had co-partners in getting the steel industry up and running and so he had invited the steel industry to attend the Portfolio Committee meeting and some of them would make contributions to the presentation. As it had been launched six months previously, he did not want to focus only what was in the Master Plan but also on how the difficult issues of implementing the plan, dealing with day-to-day challenges, etc. had been handled.

Minister Patel informed Committee Members that he was joined by
Ms Malebo Mabitje-Thompson, Acting DG of the dtic
Mr Stephen Hanival, Chief Economist,
Ms Thandi Phele, Acting Deputy Director General of Industrial Competitiveness and Growth
Mr Sagren V Moodley, Chairman & CEO at Metpress (Pty) Ltd
Ms Philippa Rodseth, Executive, Manufacturing Circle
Mr Johan Strydom, Chief Executive Officer at Columbus Stainless
Ms Nonkonzo Molai, Executive Director, Corporate Services, Abedare Cables
Mr Harry Kassel, Chief Operations Officer, Reclamation Group
Mr Charles Dednam, Independent Strategist and Consultant
Mr Johan Burger, Chief Executive Officer of Evraz Highveld Steel
Mr Irwin Jim who was representing the two trade unions, NUMSA and Solidarity
Mr Godfrey Baloyi, Executive, SA Revenue Service,
Mr Meluleki Nzimande, Chief Commissioner of the International Trade Administration Commission of South Africa (ITAC)
Ms Joanne Bate, COO, Industrial Development Corporation (IDC)
Ms Jody Scholtz, Administrator, South African Bureau of Standards
Dr Bernard Fanaroff, Facilitator

Having given an overview of the SMP, the Minister handed back to the Acting Chairperson who, in turn, handed back to the Chairperson.

The Chairperson stated that he was working from his phone and asked that the whip continued to act as Chairperson.

Presentation of the Steel Master Plan
The Minister asked Ms Phele to introduce the presentation. He stated that she would invite members from the various streams of the Steel Master Plan to present parts of the presentation.

Ms Phele began with the objectives on slide 10 as the Minister had covered the first few slides in giving the challenges that faced the steel industry. The key focus of the Master Plan was on continuous improvement and collaboration between industry, government and organised labour in order to maintain the sustainability of the steel and metal fabrication industry. 73 implementation actions were intended to guide the implementation plan which focused on key areas: supply-side; demand-side; AfCFTA/export markets; resource mobilisation; transformation; and HR development. The action-oriented plan was based on identified competitiveness improvements in the firms, measures to reduce levels of imports and repositioning of the industry to be resilient in the intense global pressures.

Mr Kassel presented slides 16 and 17 and spoke to the Committee on scrap metal interventions. He made a correction to slide 17 which should have stated six months, and not 12 months. He added that Minister Patel’s Price Preference System (PPS) policy had saved the local steel industry and had saved jobs and facilitated a situation that had led, in November 2021, to the long steel products produced in SA being the cheapest in the world. The PPS policy, together with the SA export tax, had saved the steel industry. SARS, ITAC and customs had done an excellent job in protecting an industry that was very rapidly moving towards a point of collapse prior to the Minister’s intervention. Currently, some of the publicly listed companies were showing their best performances, particularly those in the recycling sector.

The greenest and most precious raw material was scrap metal and he pleaded that scrap metal be kept in SA to nurture long-term benefit in the sector. Nearly every industrialised country in the world was currently retaining its scrap metal, particularly in the face of carbon taxes globally.  Those carbon taxes could put the SA steel industry at risk if SA did not implement a green steel policy. If SA steel did not go green, it could impact on the downstream industries, such as the auto industry and others.

Mr Kassel’s plea was for the sector to be managed via legislation and not just regulation as that would create certainty in the sector and encourage investment. He noted that SARS, ITAC and customs had done an excellent job in protecting the industry and requested that the Portfolio Committee play its strategic role of creating legislation. He maintained that retention of the steel industry would bring much needed jobs.

The Minister requested Mr Godfrey Baloyi to present the background to the role that SARS was playing in levelling the playing fields.

Mr Baloyi stated that SARS recognised steel as key industry that needed monitoring and SARS had committed to rooting out illicit activities in the industry. SARS would monitor 35 tariff headings, with input from industry, although SARS made the final decision. SARS believed that there was a need to improve collaboration in the industry and was exploring ways and means of sharing its work with the industry, without revealing the names of people being audited or investigated. SARS was monitoring declarations to ensure that reference prices were current and confidential. The entity had noted a drastic decline in applications since the introduction of permit applications, and that would mean mis-declarations.

He added that the steel industry had offered to train SARS officials, and was doing so, although the Covid pandemic limited the number of people who could be trained. He stressed that, like all revenue authorities, SARS had to monitor that exports/imports were within legislation, using the World Trade Organisation (WTO) regulations and the reference pricing that had been developed, and which was one way of detecting under-invoicing in the steel sector.

Success stories
Ms Phele pointed out that Annexure A to the presentation showed some examples of those black industrialists that had benefitted from the funding provided by the Industrial Development Corporation to support black industrialists in the steel industry.

Mr Johan Burger, Chief Executive Officer of EVRAZ Highveld Steel, the company running the Highveld Industrial Park, was invited to brief the Committee. He explained how Highveld Steel had been in business rescue since 2015 and had almost been lost as an asset. However, in an attempt to retain the assets, Highveld Steel was converted into an industrial park and began producing structural steel in 2017. Recently Robusteel, a black-owned company, had acquired the iron-making facilities and the plate-building facilities. Once fully commissioned, 2 400 people would be employed in the industrial park.

Ms Phele informed the Committee that CISCO Steel had come out of business rescue when it had been taken over by a Tanzanian company, Kamal Steel, which had made an investment of R290 million and was evidence of SA working in a coordinated manner with investors on the continent.

Ms Phele provided examples of successes in the localisation programme, noting that SABS was playing a very supportive role in the facilitation of the process.

Progress reports on six focus areas:
-Mr Dednam presented a high level briefing on the supply side of steel.
-Mr Moodley briefed the Committee on the demand side.
-Mr Strydom addressed Resource Mobilisation.
-Ms Molai spoke of her work as a Human Resources practitioner with Productivity SA.
-Ms Phele addressed the strategy for exporting to the African Continental Free Trade Area (AfCFTA).
-Ms Phele explained that transformation of the industry was a work in progress. There had been no plans in that regard in the first six months but she would present that strand at the next meeting as transformation was considered an important aspect of the Steel Master Plan.

Conclusion by the Minister
The Minister explained that the Steel Master Plan was a work in progress but he believed that it had a huge potential for success. He acknowledged the excellent work done by Bernie Fanaroff, Irvin Jim as the General Secretary of the National Union of Metalworkers of South Africa (Numsa) and Elias Monage, Black Business Council President.

The Acting Chairperson thanked the Minister and the team for the presentation, which she noted was a work in progress. She opened the meeting to Members of the Committee.

(See Presentation)

Discussion
Mr M Cuthbert (DA) stated that he had a lengthy input as a lot of content had been shared in the meeting. He was still perplexed by the (President) Trump argument. The former dtic DG, Mr Lionel October, had argued that if the USA had a primary steelmaking capability, then why did SA not have the same? To him, it just showed the concurrent thinking on the left and the right of the political spectrum. He found it a position that was particularly problematic and devoid of an understanding of basic economics. If the Minister had read through the 83 pages (of the Steel and Metal Fabrication Master Plan) which he had the pleasure of reading in June 2021, he would also see that there was a eulogy to ISCOR and how it was supposedly successful, but there was often a misunderstanding of its success as it had been operating in a closed market as a result of sanctions and therefore there had been a requirement for local supply that no longer applied in a globalised and inter-dependent economy.

He noted a large emphasis on clean energy but as the Minister would know, a number of AMSA (ArcelorMittal South Africa) plants were quite outdated, with the most outdated one in Saldanha, recently closing. The only way that one could combat emissions was through direct air capture or carbon capture. It was quite an expensive process and as far as Mr Cuthbert was aware, there was no facility that had that process in SA. For every one ton of steel produced, one 1.8 tons of carbon or carbon equivalent were produced. If SA were to rely on solar and wind as a clean energy source, the greening of the steel industry would be particularly challenging, considering the high dependence on coal and that the energy supply was rather unstable, as well as the lack of after-market ability to reduce emissions.

A key opportunity had arisen for steel producers and he would like to pose to the Minister the question of self-generation. What had been the response of steel manufacturers and other industry players to making use of the opportunities offered by the recently amended regulations for them to self-produce up to 100 MW of electricity generation and what were their plans moving forward? That would be a unique opportunity to address the energy problems that had been a challenge in the industry for a very long period of time.

He asserted that, despite all the protection offered to AMSA, the company regularly shed jobs and now, as a result of cost-cutting measures, it was turning a profit but that did not translate into jobs, nor expansion of the industry while the company was still using the same old, outdated mills. It did not appear that AMSA had adhered to the commitment made at the time that it was fined for failing to comply with the regulations that had been put in place by then-Minister, Rob Davies.

Mr Cuthbert stated that it was quite ironic that the Minister used the example of the hot rolled coil steel tariffs because it was only after Macsteel had taken the Minister to court that the moratorium was placed on those particular products. Tariffs were standing at 8% and would be phased out in time. Unfortunately, there was no industry that one could tariff into profitability and the government should be prepared to learn from past mistakes in that regard. It was something the ministry should be a little more honest about.

Looking at infrastructure drive that was supposedly taking place - and in the previous engagement with the Minister, the Committee had had a brief conversation about that - and the expansion in fiscal projects. Spending on those kind of things had largely been muted as a number of projects had been subject to corruption as well as other sorts of leakages where there had been over-invoicing and the likes. Even Busisiwe Mavuso of Business Leadership South Africa had noted the impact of the way in which infrastructure spend had shrunk over the last five years. That and the fact that there was little in the way of public infrastructure spend currently, meant that he found that argument in the Master Plan to be actually null and void.

A key aspect of the Steel Master Plan was localisation and he believed that his views on the topic were well-known. Localisation had proven to drive up costs, reduce quality and diminish competition over a period of time as the market was constrained and the supplier could drive up prices. He pointed out that the regulations in the industry were so demanding that the Managing Director of Duferco Steel Processing Company had said that Duferco was importing steel and would take the price on the chin because it was easier to operate in that fashion and the company was able to circumvent constraints put on it when the Saldanha plant was closed.

He added that while there was an ideological belief in supporting a steel making industry, the most important thing was cost and a focus on the downstream industry, and so that approach had to be re-considered but Mr Cuthbert had his doubts that it would occur under the current administration.

Regarding the Price Preference System (PPS), Mr Cuthbert said that no matter how anyone tried to sell it, the fact was that it was a literal copy and paste of the North Korean Juche (philosophy of self-reliance). He did not mean to sound like a McCarthyite but the fact was that the Minister had closed off the market and had tried to create an artificial market but at the same time, there was no enforcement by the SA Police Services or other agencies in terms of ensuring that rail, copper cable and other infrastructure was not stolen. One could not regulate against that problem but, in the meantime, the Minister was creating many other problems for recyclers and the like. The Minister had even accused Mr Cuthbert of being a lobbyist for scrap metal dealers. Mr Cuthbert stated that he was no lobbyist but a believer in basic economics, which, on quite a regular basis, the Department did not seem to understand.

The Minister and the people behind the PPS referred to the scrap metal ‘cartel’, but he believed that the Steel Master Plan had been created through special interest groups, not ‘social partners’ as the President had said. Those specific interest groups would benefit from the Master Plan: it had not opened up the market to the extent that he had hoped it would. There had to be real reform in the steel industry and one could not rely on more of the same. The presentation showed that it was simply more of the same. He referred, as an example, to the cost of hexagonal screws where the cost had increased by more than 50%.

Mr Cuthbert requested the Minister to consider his comments. He was particularly interested in how the vision of greening the industry was going to be implemented, considering the constraints that were in place. The proposed solutions on that front were insufficient for emissions to be reduced to the extent that the Minister envisioned, or hoped.

Mr Z Burns-Ncamashe (ANC) welcomed the comprehensive and detailed input by the Minister on the important aspect of advancing the SA industrial revolution. He asked if the Minister had been able to raise the concerns of the country with the US on measures against SA steel. The reliance on imports was a challenge to the SA economy in that it made business and consumers vulnerable to supply shocks in other parts of the world, as illustrated during the Covid-19 pandemic. The reliance on imports meant longer lead times and resulted in SA businesses being price takers in international markets and undermined SA’s strategic autonomy, creating fewer jobs at home.

Moving from the perspective that localisation could not be advanced without the revitalisation of the Industrial Parks, Mr Burns-Ncamashe asked what collaborative efforts were in place with provincial and municipal authorities to assist with industrial parks, particularly the heavy industry parks where steel products were manufactured. The industrial parks were especially important where the raw material such as iron ore was derived, i.e. the Northern Cape and Limpopo.  There was a practical value to the areas, especially as that would ensure the creation of jobs in the rural provinces. That was why it was important that raw materials were found rural provinces.

Mr D Macpherson (DA) found the presentation interesting as he had dealt with the matter for many years, starting in the previous Parliament where discussions had begun on how government was going to protect primary steel producers. The ideology really rested on the belief that SA, for whatever reason, and clearly it was an ideological reason, had to have a primary steel sector and it had to be protected at all costs. He stressed that it was an ideological belief.  It was the position of government and largely driven by former Minister Rob Davies and that had been carried over into the current administration. It really seemed an at-all-costs measure. It was harping back to the Soviet ideology of the state in control of all levers at the heart of industrialisation.
 
Mr Macpherson found the history of how the country had got to that place to be revisionist and lacking in the full picture. The steel industry was in that position because government had actively chosen to protect primary producers at the cost of downstream players. That had resulted in skyrocketing prices as he state continued to enforce anti-competitiveness by protecting a few industry players at the cost of many smaller industries and that had impacted very negatively on the creation of jobs. It was based on a command and control ideology and that was the true context in which the situation had to be viewed. How did one move forward? The Master Plan seemed to be an entrenchment of the old paradigm of a closed shop agreement at the behest of special interests. He could not find where the competition was in the Master Plan. The Competition Commission was very vocal about competition or lack thereof in the country at the moment but it was very quiet on the entrenchment of the lack of competition in the Steel Master Plan.

He stated that the government had, contrary to the Minister’s view, picked a side, that of the primary producers and it had taken a court order to stop some of the anti-competitive behaviour of protecting a few people through tariffs, which, ironically, SA screamed and shouted about when other countries introduced protectionist policies. SA did the same thing, and even beyond agreed upon timeframes. But, where would the demand come from? SA had gone back a decade in terms of investment in public infrastructure. Government had gone back a decade in terms of public investment. State-owned Enterprises were a mess. PRASA was a disaster and Eskom was bankrupt, so where did the capital come from to buy SA steel?

Mr Macpherson noted the so-called investment strike in the private sector where there was an unwillingness by investors to invest. Some might say that it was rightfully so and some might say that it was understandable because of the incoherent government approach to investment and economic policy. There was very little domestic uptake and the flat growth of 1% to 1.5% continued. Where would the domestic demand come from?

It perplexed Mr Macpherson how government had rationalised the sky rocketing prices of steel products that SA consumers and business had to tolerate. He was not sure where local producers were in terms of limiting those price increases. Under the previous agreement AMSA had agreed not to introduce price increases, but it was a complete joke. AMSA did so anyway and showed government the middle finger, while government did nothing about it. He remarked that when AMSA share prices had dropped, AMSA had even blamed Mr Macpherson for the drop in prices! No one in that industry would admit that it was their own chronic lack of investment in their own infrastructure that had led to the inefficiencies and they relied on government to rectify the situation with tariff increases and government funding. He noted that more funding was on the cards. Why was there such a heavy focus on upstream which had limited job creation potential when the downstream was where jobs would be created?

Mr Macpherson stated that for 12 years Minister Patel had been at the heart of the economic cluster in the country and had exerted vast power over the economy policy but for over a decade the economy had worsened, unemployment was at a record high, there was a declining investment environment in the country and little prospect of growth. The common thread running through all of that was the Minister’s ideological stance and how he viewed the economy, economic policy and industrial policy. Was it not time, after 12 years of doing the same thing over and over again, which had resulted in worsening unemployment and worsening investment to step back from the closed shop, anti-competitive, state-controlled way of doing things and review how the country did business? If the same thing were to be done for the next 12 years, nothing would change. Something had to change: be it policy or people, something had to change.

Mr Macpherson did not believe the Master Plan would make a difference as it was rooted in 12 years of failure.

Mr S Mbuyane (ANC) welcomed the presentation by all stakeholders, government, unions and industry, because it showed what could be achieved if there were collaboration. What was the Department doing to ensure that the Special Economic Zones and the industrial parks were fast-tracked to benefit from the Master Plan? In what form was industrial finance available to support the Master Plan: grants or loans or a combination of the two?

He was concerned about transformation. If there were no plans for transformation in the Master Plan, how could the Committee gauge the process of localisation and beneficiation and the involvement of small players? The benefit of the few was not going to be looked at without a transformation plan. Was there any scientific evidence that localisation did not produce competition? He heard Members talking of localisation not being competitive.

Mr Mbuyane believed that the steel industry was vital to the country and the reckless statements of Members of the Committee, who were playing with the jobs of SA, was shocking. The Committee supported the Department and the approach of government. Without support from the Members of the DA, Highveld Steel was producing. It could not be correct that Highveld Steel was bad. What was the approach of government to promote steel making and beneficiation in SA? How were small scale players to be skilled and developed?  What was the critical intervention role played by government in Highveld, what was the role of government in salvaging Highveld Steel and what was the process to be moving forward? All of the role players were in the meeting and they could provide that information.

Ms N Motaung (ANC) asked the Minister what measures were in place to cap the dumping of cheap Chinese steel in SA. What public-private partnerships (PPPs) were in place to resuscitate the steel industry?

The Minister stated that in responding to the questions, he would ask various industry players to give input. He would deal with the comments made by the DA Members himself. He invited Mr Doron Barnes to respond to the questions on localisation by referring to his practical experience in the industry in dealing with localisation and to attest to how the Master Plan was assisting.

Mr Doron Barnes, Director at Barnes Group and CEO of Scaw Metals, stated that he employed 5 000 people, paying wages and salaries of around R150 million a month. He and his father had started a small business in 1994 and it had grown from 50 employees at that time. The company now mined iron ore, bought scrap metal and supplied AMSA with iron ore. The business spanned the entire supply chain from supplying AMSA to supplying a nail to Build-It.

He believed that Messrs Cuthbert and Macpherson were expressing their views on the input that they had been given concerning the industry and he would appreciate the opportunity to meet with them and go through what was actually happening on the ground. As a proud South African, he saw it as an obligation on all who had the capability to create jobs in SA in an environment where there was significant unemployment. He was shocked that in a country that had iron ore in the ground and scrap in the country, the two Members could stand up in front of the Committee and say that South Africans were incapable of making steel. He found it shameful. If South Africans were just given the opportunity, they would show that it could be done. SA could industrialise the country and produce the products it needed for its own people. There was absolutely no reason why SA should be importing steel products such as nuts, screws, wheelbarrows, etc.

Explaining why SA had been unable to make the products, he said that up until April 2021, China have given a 13% export rebate to all Chinese exporters of steel, and had paid 13% on stainless steel exports. His company had been up against a 13% Chinese rebate on wire and tubing. That had been going on for 10 to 15 years and that explained why Mr Macpherson noted that nothing had changed in the SA industry in the past 12 years. The 13% rebate had crippled the steel industry in SA and many others throughout the world. As a result of China deciding to get rid of the rebate earlier in the year, the world had an immense increase in steel prices. He informed Mr Macpherson that that was the reason for the increase in prices that he had seen. China was currently considering putting a tax on steel exports that would further increase costs. Had Minister Patel not supported Arcelor-Mittal through various duties and other trade mechanisms, the country would have lost AMSA. His company competed with AMSA and he had taken the company to the Competition Commission on pricing and had experienced a lot of issues with AMSA, so he was no friend of AMSA, but SA needed to protect industrialisation and a steel industry took years to put up. What was needed was a competitive steel industry.

Mr Barnes stated categorically that it was absolute nonsense that the steel industry was not creating employment, was anti-competitive and state controlled. Steel was divided into long products, used to make fencing and wire, and flat products, or flat sheets, and those products needed two different types of steel mills. The long steel market in SA was one of the most competitive long steel markets in the world – and he invited Mr Cuthbert and Mr Macpherson to visit SCAW Metals to verify his statement. At one stage, SCAW Metal was selling the cheapest long steel in the world, working on a cost basis, including a small profit, and at the beginning of November 2021, it was cheaper than it could be bought in China. It was the most incredible thing and he had never seen that since he began in the business in 1994!

He acknowledged that flat products were not competitive because there was currently only one producer but Columbus and Scaw would soon be making flat products, following the latest substantial investment in SA steel of R2 billion. It was an unbelievable change. That would create competition in the local market and that would create a competitive environment in both the up and the down-stream markets.

Mr Barnes stated that it was the first time in his 25 years in the industry that the entire industry was sitting down with government, having constructive discussions and achieving results. He was amazed. The SA Revenue Service was involved in preventing illicit imports and funding was coming in that assisted both upstream and downstream. The Master Plan also assisted downstream but to sustain downstream industries, one needed a primary steel industry in country. People had not been able to import recently, not because of tariffs or the government, but because there had been a lack of supply from China and because of the impact of Covid. When there was a global shortage, SA did not receive steel. He thanked the Minister and the dtic because the Master Plan was creating an upstream and downstream industry in SA that would be sustainable and create jobs.

The Minister referred to questions regarding scrap metal raised by Mr Cuthbert and he requested Mr Kassel to answer the questions as the Reclamation Group was in both the export scrap metal market and in local recycling markets.

Mr Kassel represented one of the larger players in the scrap metal recycling industry in SA and employed upwards of 2 500 people. He could not understand the enormous pushback against the Price Preference System (PPS). He could speak on the facts coming from working with the system rather than the noise of a select few who did find the policy suitable to them but who could go along with the policy and run extremely viable businesses that could retain the current employments and generate new employments.

He asked which scrap recyclers were not doing well and which had closed. He was in the industry and he had not heard of any scrap metal businesses that had closed or which were in peril. The PPS had saved the steel industry and recyclers were forced to further invest in infrastructure to create beneficiation, rather than simply exporting for profit without re-investment in their businesses.

Mr Kassel stated that the reason for SA selling the cheapest long products in the world was largely a result of the PPS intervention. There was a perception that the PPS was a downstream cost but, if SA downstream was producing the cheapest long steel products, the downstream industries had to be reaping the benefits of the PPS and had to be doing well. As Mr Barnes had said, there were two main sector in the steel industries: primary steel producers of flat metal and scrap metal and there were cost drivers very different from the long steel producers at the mini-mills that worked with scrap metal and direct production iron ore. Those produced long products produced at the cheapest prices in the world but the flat product producers could not deliver at reduced prices. The cheap long products were as a result of the PPS. PPS was an excellent policy. Two Members had complained about the policies over the past 12 years but numbers did not Iie: significant players in the recycling and scrap sector showed that they had enjoyed bumper profits. Those industries, outside of AMSA, that used scrap metal were pumping and that was the result of PPS, which had been incorporated in the Steel Master Plan.

The European Union was embarking in the same direction with a new regulation. In order to flout World Trade Organisation rules, the EU policy had been developed under the guise of not dumping waste on developing countries, whereas the SA policy was open and transparent. Everyone knew that scrap material was precious for greening the steel industry. Companies in the EU were really securing their green steel products and maintaining their employment figures. Without the government’s interventions, the steel industry would have closed down with a massive jobs massacre. One had to take the 30-year long-term view; SA industries needed to have the space to re-invest and green the industry. Without the PPS and the Master Plan, all aspects of the steel industry would be dead. Mr Kassel asserted that everyone in the industry was benefitting from the Master Plan, not just a select few. It was an extremely competitive industry.

The Minister responded to Mr Cuthbert and Mr Macpherson’s issues, suggesting that their comments, which overlapped, were actually opinions, not questions. Regarding government’s commitment to retain the steel industry, Mr Cuthbert regarded it as a North Korean philosophy and Mr Macpherson called it Soviet ideology. Name calling occurred when one had lost the argument as Messrs Macpherson and Cuthbert had. Was it an ideology that drove the belief that, for a country to develop, it needed to have a diverse economy and manufacturing sector and that within that economy, there should be a manufacturing capability and a primary steel making industry from which the African continent could benefit? If that was ideological, so was the thinking of USA under different Presidents, UK, India, Russia, Brazil, Indonesia, South Korea. Those countries differed vastly in political views and ruling parties but all believed in locally produced steel and all sat down with him, Minister Patel, in the Ministers Committee on Steel, to discuss how they could address the global crisis in steel and each one could, separately, ensure that they had a primary steelmaking capacity in their own country. None of those countries had accepted the simple economic theories touted by Mr Cuthbert and Mr Macpherson, even though he had listened very hard to hear those comments.

The Minister stated that the question was why such countries did not just rely on imported steel from the cheapest supplier. It was possible Mr Cuthbert and Mr Macpherson were right and the world was wrong, but it was more likely the two DA Members were wrong and the world was right. They should supplement their reading and study the steel industry, speak to steel producers, get a more rounded view of the problem, avoid being lobbied by only one company and come up with a more balanced position and a more mature view of how SA had a steel industry that had both upstream and downstream players.

Minister Patel noted that the two Members had said the problem went a little further. They said that the Minister was backing special interest groups and Mr Macpherson had accused him of protecting upstream at the expense of downstream industry. However, the trade-related measures taken in the past few months all related to the downstream industry. He had expected them to send him boxes of locally made chocolates and congratulate him on protecting the downstream industry. However, the two Members changed the drum according to what government did and would move on to support something else rather than acknowledge a success. His advice was that the Members needed to find consistency in their arguments and listen to the facts. Government listened to the industry and adjusted where there was a need to change course. Government had recognised in the early stages, as Mr Kassel had pointed out, that steel mills could not just be put up and taken down. A steel mill was a considerable investment and was long term issue. When a country lost its primary steel capacity, it also lost skills, machinery and investment and that could not easily be replaced. In the first phase, the focus had been upstream to stabilise the industry; in the second phase, a lot more of the work focussed on downstream.

The Minister noted that the two Members had aligned their arguments that the Minister had been taken to court by Macsteel to change his approach to tariffs and he wished to compliment the DA researchers on ensuring that the arguments of their Members were aligned. Unfortunately, the truth was a little different to the advice given to the two Members. During COVID, ITAC had proposed a provisional extension of the safeguard duties. He had agreed, as long as the request was accompanied by an additional report setting out detailed information to which he could apply his mind. Having heard the problems and challenges with regard to accessing steel and having heard about the problems that AMSA was experiencing at its mill in Newcastle, he had taken the view that it was not warranted to continue the safeguard duty. It was therefore very easy when Macsteel came to him with their application to inform the company that he was of the view that the safeguard duty should not be extended. It was not a court finding but he had proposed that the report be submitted to the court and the matter was settled via court proceedings.

Regarding the shrinking of public infrastructure spend, Minister Patel agreed that it was true, as he had pointed that out in his opening remarks. He was glad he and Mr Cuthbert could agree on something. They should celebrate. He noted that even during the period of significant infrastructure spending, the Economic Development Department had produced a report that showed leakages in infrastructure spending. The first leakage was the result of corruption. A portion of every R1 billion made available in the budget, was skimmed off by middlemen and persons like the Gupta family and others. The Department had put some figures to that in 2017 on an assumption of skimming causing a 10% leakage as a result of over-payment on contract and the Department had calculated what the result would have been on jobs and GDP. The report had also shown that a significant part of the infrastructure spending was mopped up by imports. Mr Cuthbert would know that, in determining the GDP of a country, one subtracted imports and so those imports had acted as a brake on growth until under the new administration of President Ramaphosa, the re-imagined industrial strategy had been developed. Other leakages had absorbed a number of the benefits of infrastructure spending. Minister Patel was in discussion with the Minister of Finance, Minister Godongwana, and others in the Ministers’ Committee and all were in agreement that public infrastructure spending had to increase. He could point Mr Macpherson to the relevant parts in the Steel Master Plan - which he said he had read in June, but perhaps it was time for a refresher course – because that would point out where he and the Department saw value in the market. They were talking to the automotive industry. As that industry stepped up its own local content, they had asked the industry to consider using more SA steel and products made with SA steel. They had also identified the mining equipment area, the yellow metals area, the new technologies of the greening of the economy, etc.

In addition to domestic demand, Minister Patel stated, consideration was being given to external demand and the AfCFTA now had Rules of Origin for the steel industry so that was a potential market, especially as Africa produced less than 1% of the steel produced worldwide while the population of Africa constituted 17% of the world’s people. The rest of the steel was produced in Europe, America and Asia. The government wanted to change that and he had found, having spoken to the Presidents he met on President Ramaphosa’s recent tour of Africa, that all Presidents had the same message, which would be uncomfortable to the ears of Mr Cuthbert and Mr Macpherson, because it was a message of industrialisation and of building Africa’s industrial capabilities to break the neo-colonial pattern where Africa was only a producer of raw materials.

The Minister had heard that passionate appeal from that proud South African, Doron Barnes, who had asked why SA could not produce those things. SA had to lose its inferiority complex that said SA could only import steel from China or Europe. Mr Macpherson should be a proud South African because the country could produce steel. If steel were produced more competitively in SA, it could be exported to Africa. Some of what Mr Barnes had said was helpful, but the Minister wanted to see steel produced across a wider range of firms. The low prices were needed across the entire industry.

Mr Cuthbert had raised the issue of self-generation and it was an important area because steel making and energy were fundamentally intertwined. The challenges of Eskom had impacted greatly on SA’s steel making capability and prices and was an area that had to be addressed. The President had announced the addition of self-generation rules of 100MW per generating firm.

Regarding AMSA, Minister Patel was really happy that Mr Cuthbert was taking the side of the ruling party, the ANC, in saying that profits should not be based on job shedding. He hoped that Mr Cuthbert remembered that in other instances when it was not politically convenient to make that point. Government understood the pressures that businesses experienced and that they could go completely out of business if they did not find competitive ways of operating and if the labour force was not aligned to the production output. However, it was always a sad day when jobs were lost because it was ordinary South Africans who suffered. He wanted to celebrate businesses that created jobs and he had been very critical of AMSA, in public, about their actions in respect of employment. He had taken that view, not when it was politically convenient, but on a consistent basis. Looking at the example of Saldanha Steel, he was pleased to say that the DA in the Western Cape had been much more pragmatic than the DA representatives in the National Assembly. The DA in the Western Cape had reached out to the Minister, enquiring whether there was anything that could be done to keep the plant open although Saldanha Steel was owned by Arcelor-Mittal. The DA could do their dance but the government did what was right for the SA public.

He informed Mr Macpherson that, contrary to his assertion that the Competition Commission was quiet about the steel industry, the single biggest fine levied by the Competition Commission up to that point had been a massive fine for Arcelor-Mittal.

The Minister explained that he had taken the time to respond to opinions that had been expressed. He hoped that he had shown more clearly that there were business people who ran factories and knew their business who had a very different world view from Messrs Macpherson and Cuthbert. The Portfolio Committee discussions needed to move into a more constructive tone and that would need the support of the Members of the Committee.

Minister Patel responded to some of the more interesting questions that had come up. Mr Burns-Ncamashe asked about SA’s engagement with the USA regarding steel exports to the USA. He could see that Mr Burns-Ncamashe was interested in facts and detail and was staying away from simply expressing an opinion.  Section 232 of the USA Trade Expansion Act was a provision that allowed the USA to impose tariffs on any product where it was believed that the national interest of the country was affected. President Trump had imposed that provision on steel imports from many countries and the Biden Administration had retained the provision. Minister Patel had reached out to Ambassador Katherine Tai, the United States Trade Representative, putting forward cogently, the empirical arguments of why SA should not be affected by the provision. They had looked at the volume of trade between the USA and SA, broken those figures down into steel and aluminium and had looked at the capacity of the USA steel industry. He had made the point that, purely factually, SA was not disrupting the USA steel capability and was not the cause of the shutdown of any steel mills. He had noted that the Biden Administration had reached a quota agreement with the EU – the DA Members would squirm and be uncomfortable at that phrase, but they had not run a national government - and in that deal, the USA and EU were moving towards reaching an agreement that would settle their steel dispute. SA was now engaging with the USA at a technical level to try and identify whether there were reasons to reach an agreement between the USA and SA.

The Minister referred to Mr Burns-Ncamashe’s question as to whether the Minister had taken into account the impact of import lead times on SA industry. He had not had a chance to go into detail in the presentation but one of the real lessons of Covid-19 was that everywhere, across the globe, supply chains of steel and a range of other products had been disrupted. One of the more notable disruption had been to the supply of semi-conductor chips used in the production of vehicles. The disruption of supply chains had caused havoc across the world and so countries now had a greater understanding that countries need to build resilience into their strategy. Competitive pricing was an important consideration but so was resilience of supply and that would be a focus area in the time to come. When one sourced from diverse and far flung locations, one could get some advantages, such as price, because China had such enormous production runs, as did the EU because their internal markets were so large, but SCAW Metal had shown that it was not always the case. The government was trying to address the problem in two ways: one was the AfCFTA that would give SA markets of significant scale; two was recognising that with the advantage of pricing came an enormous disadvantage and that was the disruption of supply chains and that lead times were so long that by the time an order had been fulfilled, the market had changed. Those were basic economic arguments.

He supported Mr Burns-Ncamashe and Mr Mbuyane on industrial parks (IPs) and Special Economic Zones. One challenge was that industrial parks could not always be located reasonably close to the raw material. It often made economic sense to do so but a steel mill required a range of inputs in addition to iron ore or scrap metal. The energy systems available in a given area, the technical and managerial skills, ports and logistic facilities, etc. had to be taken into account. But where it made economic sense, one needed to consider whether one could locate IPs closer to the source. The industrial parks plan was faulty in one respect: the national government had virtually no role in it. The only role of the dtic was to act as a funding agency to make funds available. The running of IPs was left up to provinces and in a number of cases they had been run extremely poorly. The government had seen public resources not getting the return needed and that needed to be fixed. It would require quire a tough negotiation with provinces and a change to the fiscal and legislative framework was necessary to give national government a greater role to play in the running of industrial parks and turning many of them around.

Responding to Mr Mbuyane’s question on funding, the Minister stated that the IDC funding was essentially loan funding and the dtic funding was a combination of loan and grant funding. The automotive incentive scheme had a grant component and the black industrialist scheme was a grant-driven scheme. Transformation was briefly addressed in the presentation as there was not time to deal with it. A few black SA firms that been shown as an illustration but everyone agreed that there needed to be greater transformation, not only to be more equitable but the steel industry should be one that could draw on the talent base of all South Africans. He saw a growing number of senior black managers gaining experience and contributing to the competitiveness of firms in the steel industry. There were also South African black-owned firms in the industry.

Minister Patel complimented Mr Mbuyane for putting his finger on the question of whether localisation diminished competitiveness. It was an assertion and scientific evidence showed that a poorly implemented policy of localisation would decrease competition and increase prices but a well-executed policy enhanced competition and decreased prices. It was a question of whether it was purely protectionism of an industry without requiring it to compete. One of the big problems was having an upstream industry with only one player. It was government policy to expand that sector and a lot of work was being done to encourage players to move into the upstream market of the industry. Localisation was not about closing the borders but about deepening the local content of the goods which the state procured and that was allowed by the WTO. It was also about upping the percentage of local goods bought by retailers, but on the basis that those firms needed to increase the export of their products because playing global markets gave them the opportunity to become competitive. Competitiveness was not only about pricing, but also quality. He cited the example of imported corrugated iron sheets that were so thin and flimsy that they were blown away by winds and caused harm and injury and death. Reliability and the ability to respond quickly to the changing needs of the market was also essential.

Minister Patel stated that Mr Mbuyane made a good point on Highveld Steel. If there were more time, he would have like Johan Burger to elaborate on the steel industry. The Minister was reading a book given to him by the Solidarity trade union that told the story of the re-birth of Highveld Steel where Johan Burger had led a team of proud black and white South Africans who had worked day and night to get the Highveld Industrial Park up and running. Instead of selling the infrastructure to China, the industrial park been developed and it was now employing 1 500 workers with an aim of increasing that figure to over 2 000. When people worked so hard, he appreciated hearing good words about such people from Members of Parliament, such as Mr Mbuyane.
 
Asked by Ms Motaung about the dumping of cheap steel, the Minister stated that tariff measures were in place but anti-dumping measures were only used when there was evidence of dumping. ITAC did not take a specific approach to any particular country, but made decisions on a case-by-case basis. Her question about public-private partnerships was a good question: that was what the Steel Master Plan was about – a PPP. Infrastructure fell under the domain of a number of Cabinet Ministers and they were all committed to increasing the spend on infrastructure and as those projects were rolled out, Members would see evidence of the PPP.

The Minister acknowledged that there was not enough time to deal with every point raised but he hoped that he had covered enough of the points to show that the Steel Master Plan was seeking to build a new steel industry. Would it be uniformly successful? Would it be smooth going? He conceded that the answer was in the negative as he was aware there would be challenges. There was a major battle across the world where everyone wanted to keep their steel industry. Because all countries wanted to have their own steel industry, SA had to up its game and government had to be more agile and more responsive.

The Minister thanked the Chairperson for the opportunity to exchange views with the Members of Parliament. He had to leave to address a press briefing but he would respond further in future meetings. He thanked businesses for the partnerships, as well as trade unions and government agencies that had worked strongly on the different areas of the Master Plan. He looked forward to the successes, but where there were failures, he would be open and honest about it. Government and industry would pick themselves up and correct the shortcomings.

The Acting Chairperson thanked the Minister and, noting the hands of Mr Cuthbert and Mr Macpherson, she suggested that they submit their additional questions in writing and the Secretary would arrange for the Minister to follow up as he had another engagement and the Committee still had two agenda items to deal with before the afternoon session in the House.

The Committee Secretary agreed that the Members could, if they so chose, submit their questions in writing.

Mr Macpherson said that everyone had important things to do but that Members of the Committee had very little opportunity to engage with the Minister. He could put questions through the parliamentary process, if he wished to submit questions in writing.  The Minister should not have scheduled a press conference for 12:00 on the morning that the Portfolio Committee had scheduled an oversight meeting on something as important as the Steel Master Plan. Members had listened to the Minister and the other presenters for over two hours. It was not good enough because the remaining time did not provide an opportunity for robust engagement. It was not good enough. There were mechanisms for submitting written questions but Portfolio Committee meetings were intended to provide an opportunity for members to engage with the Executive on government policy, and in that case, radical government policy. To allow only one round of questions because the Minister wanted to go and talk to the media was not acceptable; he did not accept it. The priority should lie with the Committee: that was who the Minister was accountable to, not the journalists. He believed that Committee Members should be allowed to proceed with their follow-up questions.

The Acting Chairperson asked the Minister to respond.

Mr Cuthbert stated that his hand had been up first. The Minister was at the meeting on invitation of the Committee and so Committee Members should be permitted to pose their questions if they had raised their hands first, so that the Minister could respond.

The Acting Chairperson replied that she recognised Mr Cuthbert’s request to speak but she first wished to give the Minister the opportunity to respond.

Mr Cuthbert commented that the process was irregular.

The Minister said that it was important for him to respond to the issues raised by Mr Macpherson. Firstly, he had been advised that the discussion had been scheduled until 12:00 and it was well past that time. He had asked that he be excused at 12:00, which would have meant that he had spent three hours with the Committee. Mr Cuthbert and Mr Macpherson had been given an opportunity to ask numerous questions but they had not done so. Instead, they had responded with an ideological diatribe.

He added that he was not accountable to journalists, but he was accountable to the SA people and through media conferences, Members of the Executive were able to communicate important information about government to the people. Mr Macpherson should be respectful of the need for the Executive to talk, not only to him, but also to the SA public. He had set aside the time as per the Committee planning and it was tough that the two Members had not used their time well, but it was not fair to cast a slur on him. Saying that, for the convenience of Mr Macpherson, he did not want to stay and respond to questions was unacceptable. He had seen the tone of the comments descending and that was not edifying, particularly when they knew that the item was scheduled until 12:00. Now they wanted to spring additional questions on him, knowing that he had another commitment. It was not a fair way to deal with each other.

The Acting Chairperson called on Mr Cuthbert but alerted him to the fact that he had already been given an opportunity to ask questions and had raised 14 points.

Mr Cuthbert asked if he could speak without the Chairperson interpreting on his behalf.

The Acting Chairperson stated that he had already had extensive engagement and given the time constraints of the Committee and the fact that Members had to be in the House of Assembly shortly, he should submit his further questions in writing.

Mr Cuthbert stated that he had a process question that he wished to ask, unless the Chairperson wished to interpret that for him.

The Acting Chairperson asked Mr Cuthbert to go ahead, but without sarcasm

Mr Cuthbert assured her that he was just taking his cue from the posturing and sarcastic comments to which the Minister had subjected him and Mr Macpherson. He believed that he had made statements of facts, rather than sarcasm.

Building on Mr Macpherson’s point, Mr Cuthbert stated that it was not the first time the Minister had left early. He acknowledged that Committee meetings ran over schedule and other events were scheduled, but he pointed to the nature and size of the document before Committee Members which required sufficient debate on the item. If the Minister wanted to duck and dive their questions, that was fine, as long as he made that admission rather than trying to posture, which Mr Cuthbert did not find very genuine.

Mr Cuthbert proposed that sufficient time be set aside for discussions with the Minister and, if it could not be accommodated in one Committee session, it should be scheduled across two days so that there was substantial time to engage with the matter. It spoke to the whole way in which the matter had been handled.
Considering the fact that the Steel Master Plan had been made public in June, it had taken the Minister six months before he had presented it to the Committee and given Members the opportunity to discuss the matter. That meant that the Portfolio Committee had sat in the dark, apart from what they had read in the press or in statements from the dtic and that showed that the Minister was not acting in good faith and, whatever his protestations might be, that was a fact. If the Minister had taken the Committee seriously, he would have called an urgent meeting to discuss the matter, but he had chosen not to do so.

Mr Cuthbert stated he was not interested in submitting questions in writing; he had wanted the opportunity to engage verbally with the Minister. If he wished to back out to do what he considered more important than engaging with Members of the Committee, then that was on the Minister and not on Mr Cuthbert.

The Acting Chair stated that she would submit, to the Portfolio Committee management committee, a proposal that engagements be scheduled over two days and that the Minister be invited to return to continue the conversation. The management committee would look at arranging a further engagement with the Minister.

Mr Burns-Ncamashe said that the direction given by the Acting Chairperson was the right approach because no amount of gaslighting or narcissistic posturing would take the Committee forward. The Minister was supposed to be at the Committee meeting until 12:00 and the Members were required to be in the House of Assembly at 14:00. More than being accountable to the Committee, the Minister was accountable to the people of SA, and if he had to address them through the media, that was an important priority. Members of Parliament could not ignore the people who had elected them to the positions that they occupied and the people should not be undermined.

The Acting Chairperson thanked the Minister and his team.

The Minister asked to be excused and was granted permission by the Acting Chairperson.

Programme for First Quarter of 2022
The Committee Secretary flighted the Committee Programme for First Quarter of 2022.

Mr Cuthbert noted that Members were in a hurry to conclude the meeting and he had perused the document, so he proposed that an addition be made to the programme in that the Special Investigating Unit (SIU) be requested to present a report on progress in the case of the malfeasance and corruption at the National Lotteries Commission. In response to his parliamentary questions, he had been told that the first report was to have been completed by June and the second by 31 December 2021. It was important to get the SIU to come and account so that the Committee could get a better sense of where the SIU was in terms of prosecutions, asset forfeiture and the likes. The Committee had been consumed by the Copyright Amendment Bill, but it was time to receive a report from the SIU.

The Acting Chairperson asked if he was supporting the programme.

Mr Cuthbert agreed that he was, with the amendment, if possible.

Mr Mbuyane stated that the Committee needed to agree to the programme before it could be amended.

The Acting Chairperson asked the Committee Secretary to advise on procedure.

The Secretary explained that there had been a proposal for an addition to the programme. A seconder for the addition was required and then the Committee could decide whether or not to approve the addition.

Mr Macpherson said that he was comfortable with the proposal made by Mr Cuthbert. He cautioned the Committee about its approach to such things. He explained that any Member of the Committee could call for an entity of the state to account before a Committee and the secretariat had to make that happen. Members of the Committee could not vote for or against as that would be a fundamental violation of the Member’s right and duty. It was a right enjoyed by all Members of the Committee. The Committee had to leave it up to the Secretary to schedule a time for the requested engagement.

The Acting Chairperson thanked Mr Macpherson for the clarification. She did not believe that there was any Member who objected to receiving an update on the NLC matter but called for counter proposals. As there were none, she asked that the secretariat accommodate the additional item. Did Mr Macpherson second the programme that had been tabled?

Mr Macpherson confirmed that he did.

The Committee Programme was adopted.

Advertisement for public inputs on the Remitted Bills
The Acting Chairperson asked Mr F Mulder (FF+) to present the substantive issue that had caused him to sponsor the agenda item. She added that Adv van der Merwe was on the platform to respond.

Mr Mulder explained that the agenda item related to the invitation to members of the public to make submissions on the proposed additional definitions and amendments to clauses on the remitted Bills that had been issued the previous Friday. In his view, the text was incomprehensible, so much so that it would be incomprehensible to the public. The new text on which comment was sought came on the back of numerous changes to the Copyright Amendment Bill, many of which were not in the advertisement but were relevant to those making commentary. Members of the public that relied only on that text to submit comments, would have no knowledge of the extensive changes made. He cited the example of someone who wanted to comment on the Technology Protection Measures (TPM): the person would only see new definitions and not the changes to the sections. Members of public who wanted to comment on the exceptions for the disabled (section 19D) would not know that the definition of “accessible format copy” had been changed. The notice should have shown the entire document but, instead, members of the public who responded to the invitation would make mistakes that would be caused solely by the inadequacy of the consultation document.

Mr Mulder moved that that the invitation be withdrawn until the entire Bill with all the changes could be published.

Adv Charmaine van der Merwe, Senior Legal Advisor, Office of Constitutional and Legal Services, Parliament, responded to Mr Mulder’s concerns. She had taken a look at the document and had worked through all the amendments that had been proposed, and those amendments had been presented to the Committee. Members had to bear in mind that the amendments proposed to the Committee were in the public domain and it was not as if members of the public were not aware of those amendments. The advertisement also provided for access to the Bill as it had been passed by both Houses and also provided for Committee support if there were any queries.

Adv van der Merwe reminded Members that it was a very focused consultation with the public. The whole Bill was not open for comment. It was a section 79 process and that limited the Committee very significantly. The advertisement explained what each amendment was about and that was what they were being consulted about. They were not being consulted generally. However, she could present the entire Bill to the public if that were the decision of the Committee although that was normally only done after the Committee had voted for the Amendments but she understood that the Members wanted to ensure the public had a clear understanding to be able to provide the best input they could in order to guide the Committee.

She proposed that the entire document as presented to the Committee, which included technical amendments and amendments already approved by the Committee, be added to the advertisement as a supporting document.  It would have to be made very clear that it was a supporting document and not a document open for comment. It was normal practice when a Committee undertook such a focussed consultation that only the very specific wording was advertised but, if the Committee agreed, she could upload the supporting document to allow the public to make more informed comments. She requested guidance from the Committee.

The Acting Chairperson asked if Adv van der Merwe’s recommendation of uploading the document that showed all amendments, i.e. those that required public comments, those that had been approved and technical amendments, would be acceptable to Mr Mulder.

Mr Mulder said he would support that proposal and appreciated it.

Closing remarks
The Acting Chairperson stated that she was chairing the Portfolio Committee but was also the duty whip in the National Assembly and had to get to the House urgently. She asked that the set of minutes be held over until the following year. There were no objections and the Acting Chairperson closed the meeting.

The meeting was adjourned.