Chairperson, thank you to the hon members who contributed to the debate; they were mostly thoughtful and engaging contributions. I must say that some of the suggestions that were made about what we should and should not include in Ipap 2, do show that probably there is a little bit of homework to do; go back and read what it says.
It is clear that nobody has stood up and said that we were wrong when we said we have to make structural changes to the economy; no one has said we were wrong when we said that we now have to have purposeful action from the department through Ipap 2; and so on.
I'm taking this debate along with our engagements in Nedlac, and with what I'm hearing from the public hearings to indicate that there is a broad consensus reaching across the aisle for us to pursue this work that we set ourselves to perform.
Of course, we are doing this - as I was trying to say in my speech - with the imperfect machinery of the state; that's what we are trying to do. We are not trying to say that everything must be perfect and then we will start it, but we are saying we will perfect it as we go along.
Of course, what we want to do is to try to improve the performance of all the divisions of the Department of Trade and Industry, reduce the time it takes and so forth. That is actually a piece of work that we are getting our chief operating officer to do, that is, to try on a systematic basis to go through everything and give us a proposal on all these things.
Having said that, I must say I'm a little surprised at some of the examples that the hon van der Westhuizen gave. I don't know where he was - the Zim bid is before the portfolio committee. In fact, we had a meeting in Nedlac the other day, which I facilitated on the request of the portfolio committee. It has been referred and the decision is now in the hands of Parliament, so I don't know what the hon van der Westhuizen is talking about.
As far as the grain tariff is concerned, I don't know whether the member would prefer a system where somebody walks in, lobbies the Minister, and the Minister changes the tariff, because I wouldn't. I think the procedures and processes that Itac represents when it receives the request, takes it up for hearings, etc, and then makes a recommendation, is a very important process which we are going to defend against all sorts of other proposals for changing the tariff set in this country; and that needs to be maintained.
Hon Marais made a number of points which I would like to comment on. The first one, which various other people raised, is that if we need to do things differently in government to achieve the structural changes which we need - and we do - it means that government itself must work differently. The Industrial Policy Action Plan 2, Ipap 2, cannot succeed if it is just left to the DTI to administer those parts which work for it and there's no requirement for anybody else.
In that regard, the whole question of the IDC is that it is absolutely critical to the success of Ipap 2, and the IDC needs to be restructured and changed. The hon Kotsi has said that we are trying to imitate the Asian Tigers; we actually learnt more from Brazil in that particular case.
In fact, we are taking lessons from any successful country that pursued industrialisation and which has got its industrial finance right. That being the case, it doesn't mean that because the DTI is responsible for that, and if the responsibility for the IDC is not directly in line with the responsibilities of the Minister of Trade and Industry, that the whole thing is going to flop; not at all.
In fact, if the Minister of Economic Development can give quality time and focused attention to the task of restructuring the development finances of the institutions so that they can play their role, then that is part of the sharing of the responsibilities in collective governance.
As I said in the portfolio committee, we have walk-in rights and we do not have to write to the Minister when we want to deal directly with the IDC. This is an exercise, not of silos and empires, but of trying to work differently in government and I don't see any problems whatsoever.
Hon Marais asked about the value of the incentives that were given to the automotive industry. Well, I think the immediate value is that we got R9 billion in investments just recently and several thousand jobs have been created as a result. We are also concerned about the percentage of foreign components that is used, but let me tell him that in one of the last ones that was announced by Ford, in fact, the percentage was almost reversed. The majority of what will be produced in the new Ford investment will be produced here in South Africa from South African components.
That is what we are trying to achieve and we are engaging the companies with that; and that's what makes a difference between the 20% and 30% that people can get for the automotive investments scheme.
Yes, we want to create a components industry in this country - and we see that the jobs are there, which is exactly what we said in Ipap. But the components industry will rest on the original equipment manufacturers being in the country because when you have original equipment manufacturers in place, that's also when you stimulate a components industry.
In fact, we are discussing all sorts of things with them; how we can go about deepening the components industry by them perhaps procuring collectively from some of the components manufacturers. Those are very important things.
The hon Marais also talked about export processing zones - and here, I think we need to be careful with acronyms - yet sometimes he talked about industrial development zones. We have to review and seriously jack up our approach on how we promote industrial decentralisation. I'm sure that industrial development zones are not the only model that we are going to use. We have been talking about other models such as special economic zones and things of that sort.
What we offer through the IDC is essentially duty-free entry of goods that are used in the production of things that are exported. It is a tool for export industries and then one gets the benefits of the concentrated infrastructure and things like that. That is a model which we still need to assess and improve upon.
But the hon member was talking about export processing zones, where one suspends labour law and you have a race to the bottom and you allow the exploitation of people and sweat shop activities. The experience around the world is that even if we were to go that route - and I don't think we have a snowball's chance of being able to do so - we are not going to create the required employment. Too many countries have tried to do that and the experience of export processing zones is not at stake.
The DA should be very clear that when you go to places like Atlantis and you say that you want to create an EPZ there, tell the workers there that that is what you mean: that they must not have any rights under labour legislation. Tell them that and be honest with them and then see if they vote for you next time there is a by-election.
I believe that the real task now, since we are in implementation mode and trying to work differently in Ipap, is that Parliament should try to rejig itself so that it provides us with serious oversight on this. I would like to see Parliament holding us to account when some of the targets may or may not be missed in terms of the timeframes.
Ask some serious questions as to why that is the case and then start to think about this as being work that is beyond one department, but is being done through the totality of government. This is a very important task.
Let me now come to Cipro; it is a lovely whipping boy for Mr Van der Westhuizen. In fact, I don't think that his political career would have taken off if we hadn't had a problem in Cipro. But let me say that I am absolutely committed to making sure that we have decent, functioning, clean and uncorrupt agencies in government. This is our commitment.
The thing is that the Auditor-General's report, as I explained to the portfolio committee, made a number of observations about the Electronic Communication Network, ECN, tender, but it then required of the accounting officer, first of all, to ascertain if one of the companies had had an unfair advantage over the others. Then in the quotation used by Mr Marais - he left out the first half - he says, depending on the answer to that, we then have to come up and say what we are going to do about the tender and holding individuals accountable.
I said it in the portfolio committee, and let me return to that: We will go to Scopa on the 18th of this month, which I think is two weeks from now, and we will go there and explain to Scopa what we intend to do and how we intend to respond to this, but I'm not going to get drawn into that today.
In response to hon Njikelana, let me say I think that there is a need to come to the portfolio committee and to discuss BEE in some depth, including some of the work done by the Advisory Council, because when we were at the Advisory Council there was a study that was presented to us. You know, with the extent to which we have BEE in this country, one would think it's something that everyone is dominated by, but less than a quarter of the companies in this country are doing anything about BEE; that's what research found.
The weakest parts of that are what is called "indirect empowerment". Many of the companies are much more used to doing share transactions and stuff like that, and the points that they can earn through things like procuring from SMMEs they find much more difficult. That is where we want to put the emphasis. That is where we want to go.