Business Unity South Africa | One Voice of Business
1
2
Business Unity South Africa | One Voice of Business
Contents BUSA at a glance: •
President’s Report
•
CEO’s Report
•
Performance Report
•
Operating Environment
•
Economic Policy
•
Trade Policy
•
Social Policy
•
Transformation Policy
•
Media & Communications
•
Trade Investment Promotion
•
BUSA Parliamentary Office
Page 8
Page 15
Page 17 Annual Review Steering Committee: Ms Nomaxabiso Majokweni – BUSA CEO Ms Masego Lehihi – Senior Communications Manager
Business Unity South Africa | One Voice of Business
3
Strategic Role and Positioning
BUSA leadership elected at AGM in 2012
BUSINESS Unity South Africa (BUSA) is the apex business organisation that represents organised business in South Africa. Established in 2003, the organisation boasts a good mem bership mix of about 45 chambers of commerce and indus try, unisectoral organisations, corporate associations and professional associations as well as 62 leading companies. The organisation promotes full and equal enjoyment of all rights and freedoms for all its members across industry sectors, business sizes, gender interests, and professional specialisation. Built into BUSA’s constitution are the founding provisions of the South African Constitution of non-racialism and non-sexism. Members of BUSA are unanimous in their support for the principle of consensus decision-making as a guiding principle on the way the organisation operates. VISION : BUSA aims to be a unified and fully representative organisation that contributes to a vibrant, inclusive and growing economy in South Africa. MISSION : BUSA, as an inclusive apex business confedera tion, aims to ensure that organised business plays a con structive role in ensuring a macro-economic policy environ ment conducive to economic growth, development and economic transformation. Such an environment is critical for businesses of all sizes and in all sectors to thrive, expand and be competitive at both national as well as international levels. We deliver on our mission by: •
4
promoting South African business interests domesti cally and internationally;
Business Unity South Africa | One Voice of Business
•
promoting the development of an economic and social system based on the principles of justice, a marketorientated economy, individual entrepreneurship and equal opportunities;
•
influencing appropriate legislation and policy to create an enabling environment for a thriving and dynamic private sector;
•
giving attention to the role of small and medium business enterprises in all sectors and to the develop ment of linkages between large, medium and small businesses to the benefit of the economy as a whole; and
•
advancing private sector initiatives aimed at economic transformation and job creation.
President’s Report The organisation review focussed on the following areas: • • • • • • •
BUSA’s unifying vision Governance structures and policies Constitutional implications of the organisational review Sustainable funding model Optimum membership mix for an apex organisation Registration of BUSA as a non-profit company Memorandum of Incorporation
This organisational review process is now nearing comple tion. In the interest of “South Africa Inc”, BUSA and the Black Business Council (BBC) made great strides in forging a working partnership on various key areas.
COMING into my presidency it was very clear that we would continue on the trajectory of BUSA’s vision to be a unified effective apex business organisation that contributes to a vibrant, inclusive and growing South African economy. To this end, we continued to engage both on a bilateral basis with government as well as at National Economic Develop ment and Labour Council (Nedlac).
Key among these was the memorandum of understanding signed by BUSA and BBC to maintain a single business caucus at Nedlac, with the BBC participating in that caucus. In the area of SME supplier and market development, BUSA also entered into a cooperation agreement with the BBC and the United Nations Development Programme.
In order to achieve this, it was critical for business to continue to engage with government and other social partners to find ways to collectively strengthen the econo my.
Our high levels of youth unemployment continue to be problematic for the economy. Alleviating this challenge also formed part of the October 2012 High Level Compact of Social Partners.
At the time, our economy was also under pressure due to the unabating wave of strikes that engulfed the country. It is for this reason that as business we welcomed and contrib uted towards the success of President Jacob Zuma’s timely intervention in the form of the high level compact of the social partners entered into in October 2012.
As business we made commitments on a number of game changers in this regard, including skills development, work exposure opportunities, work placement and enterprise development. As BUSA we continue to facilitate, monitor and evaluate progress being made in this regard.
“In the interest of ‘South Africa Inc’, BUSA and the Black Business Council (BBC) made great strides in forging a working partnership on various key areas.” This was a decisive leadership intervention at a time that the country was experiencing violent strikes which did not only have a negative impact on the country’s mining and agricultural sector but on the overall investor sentiment. The integrity of the collective bargaining system needs to be preserved.
I would like to thank the BUSA Council, our member organisations and companies, BUSA Office Bearers, the Chief Executive Officer, the executives and staff for their contribution to the strides made by the organisation in 2012.
JABU MABUZA PRESIDENT
In our quest to ensure a strong, inclusive and effective apex organisation, BUSA continued with the organisational review process started in 2011. Members were surveyed by an independent consultancy, BAIN & Company.
Business Unity South Africa | One Voice of Business
5
CEO’s Report In the year under review we also vastly improved commu nication with our members. These improvements were re flected in the form and content of our communication with members. To ensure that our members were consistently informed about the key decisions taken by MANCO, we be gan allocating space in our monthly newsletter to announce MANCO resolutions. We also intensified our external strategic communications both at the level of targeted media campaigns on key issues such as the review of labour legislation, eTolls and electric ity rate hikes - as well as in a thought leadership role such as running a monthly column in the Business Times, leading to greater visibility and positive feedback from readers. Due to the challenges experienced in social dialogue in 2012, a review exercise to improve the effectiveness of Nedlac was undertaken. An independent study on this review is currently under way and some internal administra tive and business process improvements have already been introduced.
2012 was one of the most turbulent years since 1994 as labour unrest in the mining, agriculture and transportation sectors shook the South African economy to its very founda tions. To make matters worse, the eurozone, the country’s major trading partner, slid into a recession. Under these circumstances the role of organised business, as it finds expression in Business Unity South Africa (BUSA), was chal lenged. Business input towards the finalisation of the Labour Rela tions Amendment Bill and the Basic Conditions of Employ ment Amendment Bill became even more critical under these trying circumstances. BUSA stood firm in articulating the importance of conduct ing a Regulatory Impact Assessment (RIA) before the pass ing of any legislation in Parliament. To this end, we con ducted our own mini impact assessment that confirmed the negative effects some of the provisions of these bills would have on business and the economy as a whole. To maintain an acceptable level of cost competitiveness for the economy, BUSA continued to engage on all major issues with a potential to increase the cost of doing business. In the main, these issues included electricity rate hikes and eTolls. In both instances, BUSA commissioned compre hensive studies to assess the impact of these costs to the economy. In the case of eTolls, the necessity of conducting a comprehensive RIA before legislative and policy changes was once again highlighted. With respect to the electricity rate hikes, our study con vincingly showed that the 16% increase Eskom applied for would have adverse effects on the economy and revealed that Eskom could actually do with half the tariff increase it had applied for.
6
Business Unity South Africa | One Voice of Business
Another key milestone with regards to Nedlac was BUSA’s successful engagement with the Black Business Council on their participation at Nedlac. This resulted in a Memoran dum of Understanding that effectively maintained a single business caucus at Nedlac. One of the key focus areas for 2012 was ensuring operation al and financial stability for the organisation. The prevailing economic conditions put a lot of pressure on our members’ budgets, forcing them to curb expenditure. This, in turn, forced BUSA to look at alternative sources of revenue for specialised projects such as research, coordi nation of implementation of some of the accords as well as secondment of skills. We are grateful for the additional special funding we received from Sunday Times’ Business Leadership South Africa (BLSA).
“Another key milestone was BUSA’s successful engagement with the Black Business Council on their participation at Nedlac” In conclusion, I would like to express my sincere gratitude to the staff of BUSA and their families. 2012 posed enormous challenges on the organisation, some of which resulted in current capacity being stretched to the limit. The commitment and dedication shown by all BUSA staff in these challenging times, which saw them putting in long hours at the office, is highly appreciated, making sure that BUSA remains effective and continues to deliver on its mandate.
NOMAXABISO MAJOKWENI CHIEF EXECUTIVE OFFICER
Operating Environment OVER and above the effects of weak global economic growth, developments in the South African economy argu ably contributed to a weak domestic economic performance during 2012. Real gross domestic product (GDP) at market prices grew by 2.5% in 2012 compared with 3.5% in 2011.
The subdued pace of employment creation in the private sector has been further undermined by the fractious nature of recent wage negotiations and the announcement of fur ther possible restructuring in the mining sector that would involve the closure or mothballing of mines or shafts.
Growth was generally aligned to the size of the industry (excluding government services) and was mainly supported by finance, real estate and business services followed by manufacturing industry and the wholesale, retail and motor trade, catering and accommodation industry.
The rand exchange rate continued to pose an upside risk to the inflation outlook. The exchange rate has been affected by the widening deficit on the current account of the bal ance of payments during 2012 and changing global and do mestic risk perceptions, particularly relating to the adverse developments in the South African labour market and the downgrades by the various ratings agencies.
Although the mining and quarrying industries were the worst performers this did not come as a surprise given the challenges these industries face. While economic growth was sluggish in 2012, record ing a low of 1.2% in the third quarter, inflation grew at a faster pace compared with the previous year. The year-on-year inflation rate as measured by the con sumer price index (CPI) for all urban areas was 5.7% in December 2012. Inflation expectations remain anchored at the upper end of the inflation target range.
The latter has drawn concerns from both authorities respon sible for monetary and fiscal policies respectively and has, therefore, had an impact on BUSA’s work and approach in these areas.
“Rand exchange rate continued to pose an upside risk to the inflation outlook.�
Business Unity South Africa | One Voice of Business
7
Economic Policy
IN 2012, BUSA had engagements with the South African Reserve Bank Governor Gill Marcus who encouraged labour and business to work together and ensure a common understanding of the issues facing the country’s economy. Of specific concern was the level of trust between business, labour and government. Constituencies were encouraged to demonstrate a shared vision in the interests of the country. To this end, senior government officials, business people and labour representatives were encouraged to show caution when making public statements as it was acknowl edged that “reckless” statements aggravated negative investor sentiment. The Reserve Bank also raised concerns with regard to administered prices – a view shared by BUSA – as demon strated by our opposition regarding the magnitude of the 16% rate hike proposed by Eskom.
“We also weighed in on the controversial eToll debate and we were clear in our support for the user-pay principle.” Fearing the potential devastation the increase would have on business and the economy as a whole, BUSA commis sioned a quantitative study to assess the impact of the proposed tariff increases and propose reasonable increases. The results were used as the basis for BUSA’s presentation at the National Energy Regulator of South Africa public hearing held in Midrand, Gauteng, in early 2013. The efforts
8
Business Unity South Africa | One Voice of Business
by BUSA and other stakeholders opposed to the proposed increase finally yielded results as the regulator approved an 8% increase, a decision that BUSA endorsed. On the international trade front, BUSA raised concerns that the outlook for South Africa’s manufactured exports was increasingly becoming less encouraging, particularly due to weak recovery in traditional export destinations. On the imports side, business raised concerns around illegal imports that have largely benefitted from weaknesses in the system. For instance, products may be sent to other coun tries first, get registered over there and then enter South Africa thus effectively bypassing the system. Such practices result in revenue losses of 25% of import tariffs, causing damage to local industries. In the main it was noted that industry must become more involved and maintain a better relationship with govern ment. In terms of further support for South African industry, during the period under review, BUSA submitted its com ments on the Manufacturing Competitiveness Enhancement Programme’s production incentive guidelines and, among others, reiterated concerns raised during bi-lateral engage ment with the Department of Trade and Industry (DTI). These included fears that retaining base-year employment levels was a difficult condition to meet, particularly when productivity gains were part of the objectives of the invest ment. Overall, BUSA supports government’s strategic objectives of job creation, but stressed that realities need to be faced in order for productivity to be improved in the short-term. To this end, jobs may initially be lost and the structure of sectors may need to adapt.
Comments on the above-mentioned bill were submitted to the DTI during the first half of 2012. This was followed by participation in the National Economic Development and Labour Council (Nedlac) engagements, which resulted in more areas of consensus than disagreements on the draft bill. BUSA went ahead and presented its views to the parliament portfolio committee on trade and industry to ensure that the voice of business was heard. It was heartening to note that the presentation was well received and hopefully our concerns will be addressed. BUSA also made submission of formal comments in mid2011 around the Spatial Planning and Land Use Manage ment Bill, a Nedlac engagement was initiated with a four-aside, a process that was concluded in 2012. Furthermore, a memorandum of understanding was signed on behalf of BUSA and South African Shippers Council to seal the formal working relationship between the two organisations. Effectively, the parties committed to constructively engage in joint decision-making and consult each other on strategic aspects within their specified focus areas. This also included sharing of views and documents on matters of mutual interest and waiving membership fee charges between the organisations. BUSA also weighed in on the controversial eToll debate. BUSA was clear that it
supported the user-pay principle but believed there was a need to engage further with social partners on how to put this into practice and under what circumstances in order to limit the impact on transaction and administrative costs for the economy. BUSA continued to engage with government on the eTolling system with the aim of developing a suitable platform to discuss alternative funding methodologies to support this initiative and other future infrastructural projects. Finally, and with an eye to the sustainability challenges increasingly facing business in South Africa, BUSA attended a Carbon Tax Seminar hosted by law firm Edward Nathan Sonnenbergs in December 2012. The seminar highlighted the need for business to prepare for the impact and efficiently manage exposure, especially because South Africa is the 12th largest emitter of air pollutants in the world. With the country committed to reducing its carbon footprint to 34% by 2020, the imperative for business is to invest more in alternative renewable energy, otherwise punitive measures in the form of penalties and taxes will be imposed. It was also noted that there are also “carrot� instruments to encourage the reduction of carbon footprint and these include: tax incentives, the Renewable Energy Independent Power Producer Purchase Programme and the Green Fund.
Business Unity South Africa | One Voice of Business
9
Trade Policy IN 2012, BUSA continued to encourage government to take stock of South Africa’s current trade policy strategic framework, especially in light of the prioritisation of regional integration and the increased focus on general trade facilitation issues. With the world still battling to recover from the global economic slowdown, South Africa has experienced an associated shift in its trading patterns from the more traditional – often Western – trading partners to solidifying relationships with fast-growing developing economies. Partnerships such as South Africa’s membership of the BRICS bloc with Brazil, Russia, India and China will defi nitely affect South African trade relations and our view is that business must be pre-emptive in taking full advantage of the opportunities this shift may bring about. Another key area of lobbying for BUSA in the trade space revolved around South Africa’s position as a recipient of African Growth and Opportunity Act (AGOA) benefits. The situation remains precarious after 2012 with indications that the country is a candidate for “graduation” out of AGOA. BUSA has been engaging with the Department of Trade and Industry (bilaterally, and within Nedlac) and with members on South Africa’s AGOA lobbying strategy. BUSA has also provided input into government’s strategy papers, and has contributed to the terms of reference for a study to inform the strategy. In 2013, BUSA will be ramping up efforts with government, industry and other stakeholders to synthesise inputs into the finalised strategy. Recognising the potential inherent in the BRICS partnership, BUSA is also representing business in negotiations for a Preferential Trade Agreement with India. South Africa is negotiating as part of the Southern African Customs Union (SACU). This year, the bulk of BUSA engage ments related to the India request (offensive list). BUSA has undertaken a comprehensive consultation process among its members in this regard and the consulta tion process has elicited concessions to about a quarter of India’s requested products. In parallel to the request list, BUSA has consulted on issues such as the legal/negotiating text and proposed Technical Barriers to Trade text. BUSA has continued to represent South African business in the Economic Partnership Agreements (EPAs) negotiations with the European Union (EU). South Africa is negotiating as part of the SADC EPA group and BUSA has been instru mental in ensuring that the interests of South African businesses are adequately represented. From the South African perspective, significant progress
10
Business Unity South Africa | One Voice of Business
was made in 2012 as the EU has begun to exercise some flexibility on a number of the policy prescription issues that were partly responsible for the impasse. Current issues under discussion are the EU’s request for additional market access on certain clothing and textile lines and for the granting of additional geographic indica tors as well as South Africa’s request for greater parity in agriculture, which currently falls under the South AfricanEU Trade, Development and Cooperation Agreement. While the EU progress was positive, little substantive progress was made during 2012 in the World Trade Organi sation’s (WTO’s) overarching Doha Development Agenda negotiations and no clear indication was forthcoming on the fate of the round due to deadlock in the negotiations. It is more likely that a few deliverables will be achieved by the Bali Ministerial Conference at the end of 2013. One area where there is broad consensus is trade facilita tion. During the year in review BUSA also made its presence felt in this area, including policy input, legislation and lobbying. Our mark has been particularly felt in the following areas: •
Customs Duty and Customs Control Bills - BUSA has been the focal point for business in the new customs
bills. The Nedlac negotiations were completed and the Nedlac report was signed off by the Trade and Industry Chamber. Key issues raised in the report included BUSA’s opposition to the de facto abolition of inland ports such as City Deep; the importance of ensuring that the legislation in Nedlac was not undermined by rules formulated outside Nedlac; and co-operation between all constituencies to increase judicial and prosecutorial technical capacity. •
South African approach to trade in services - BUSA has always articulated the need for a more co-ordinated and well-considered approach to trade in services – one that is underpinned by accurate statistics and information on services trade, as well as empirical understanding of South Africa’s competitiveness. Such an approach would facilitate better informed stances on South Africa’s of fensive and defensive interests, and consequent posi tions in negotiations. For this reason, BUSA has been concerned by the impasse that has subsisted in this area for the past few years – particularly in relation to the work of the Nedlac task team on trade in services. An ap praisal of the task team, which included a consideration of its possible revival, was taken up by Nedlac convenors. In parallel to this, BUSA and the Department of Trade and Industry (Trade in Services Directorate) initiated dis cussions on the formation of a Trade in Services Industry Coalition. The envisaged forum is intended to be the con tact point for government for engaging with industry on trade in services matters.
•
Implementation of South Africa’s Trade Policy Strategic Framework - In 2011, Nedlac commenced with the im plementation components of the Trade Policy Strategic Framework. This began with necessary amendments to the terms of reference of several task teams. It was fol lowed by engagement on a series of government position papers, which continued into 2012. To date, BUSA has engaged on government position papers on inter alia : export taxes; trade in services; trade and competition policy; trade and supporting social policies; and South Africa’s use of WTO dispute settlement. Related trade reference groups were also established in 2012. The ref erence groups will engage on the papers and input from social partners to consider how to concretely take the outcomes forward.
•
Nedlac Trade and Industry Chamber Strategic Session The Nedlac Trade and Industry Strategic Session with Minister Rob Davies was held on August 2, 2012. The session covered pertinent areas such as the implementa tion of the Industrial Policy Action Plan, the Local Pro curement Accord, the green economy, response meas ures from MTBS, Special Economic Zones and South Africa’s trade relations. Business participation in the event was exceptionally high and a number of key fol low-up points were agreed upon.
BUSA invited the Ports Regulator’s CEO to a meeting with members on 25 April 2012, to hear the proposed methodolo gy. BUSA continues to argue that the proposed tariff increas es cannot be justified in terms of the efficiency of our ports and that it had a detrimental effect on South Africa’s com petitiveness. BUSA again submitted a written submission end of 2012 in order to counter the proposed tariff increase of 5.4%.
“Another key area of lobbying for BUSA in the trade space revolved around South Africa’s position as a recipient of African Growth and Opportunity Act (AGOA) benefits.” In terms of the Africa-centric, Tripartite Free Trade Agree ment Non-Tariff Barrier Reporting Mechanism, BUSA contin ues to feed business concerns directly into the tripartite dis cussions, through interactions with the governmental focal point. As South African exporters and traders have been become very active users of the system, through BUSA, an expedi tious system was created that would ensure that businesses voice is heard in addressing these non-tariff barriers and en sure that greater effect is given to trade facilitation within Africa.
Finally, recognising the importance of South Africa’s ports and intra-African trade going into 2013 and beyond, BUSA maintained a strong trade facilitation role in 2012. The Na tional Ports Regulator met with BUSA representatives during the period, seeking BUSA’s input into the methodology for calculating future tariff increases for the Ports Authority. Business Unity South Africa | One Voice of Business
11
Social Policy MAJOR milestones were reached in BUSA’S Social Policy portfolio in 2012. The highlight of which was the conclu sion of the Nedlac negotiations on the Labour Relations Amendment Bill and the Basic Conditions of Employment Amendment Bill. The Parliamentary hearings regarding the bills were held in July 2012. BUSA participated in the negotiations at Nedlac on amend ments to the Labour Relations Act, Basic Conditions of Employment Act, Employment Services Act and Employ ment Equity Act. Six themes were established: atypical employment relationships; dispute resolution; collective bargaining; compliance and enforcement; access to employment; and employment equity. The Nedlac negotiating team was led by Tanya Cohen, with assistance by Kaizer Moyane (dispute resolution), John Botha (atypical employment) and Elize Strydom (collective bargaining). The remainder of the negotiating team consisted of Johnny Goldberg, Elize van der Westhuizen, Aruna Ranchod, Kevin Cowley, Elias Monage and Janette Cummings.
a burden on the business community and will have a negative impact on small businesses and, most importantly, will neither sustain existing jobs nor create new jobs as envi sioned in the New Growth Path and the National Develop ment Plan. These were highlighted in the BUSA submission to parlia ment and in the oral presentation delivered on 25 July 2012. The mini RIA confirmed that:
Office support was provided by Vikashnee Harbhajan and Vanessa Phala. Chris Todd of Bowman Gilfillan provided legal advice to the drafting team and was supported by Talita Laubscher on employment equity.
•
Prior to the parliamentary hearings, BUSA held a number of bilateral meetings with the Minister of Labour and the director-general from the Department of Labour Labour led by the BUSA CEO and Mthunzi Mdwaba.
•
The purpose of these meetings was to discuss concerns raised in the 2010 Regulatory Impact Assessment (RIA). BUSA indicated to the Minister and the Director-General that the proposals contained in the two bills will: • • • • •
Inevitably result in decreasing employment opportuni ties; Make the law more complex – harder to understand for employers, workers and for the inspectorate to enforce; Create significant burdens for the CCMA and labour courts; Result in fundamental restructuring in employment; and Create excessive administration and punitive outcomes for business, resulting in risks and uncertainty, contrary to the requirements of sustainable enterprises both small and large, particularly in the current economic climate.
As a new Regulatory Impact Assessment (RIA) on new amendments was not conducted BUSA commissioned Chris Darroll, Chief Executive of the SBP, and Professor Neil Rankin of the University of the Witwatersrand to conduct an independent mini RIA on selected areas of the two bills. The assessment confirmed that the amendments will place
12
Business Unity South Africa | One Voice of Business
•
•
A minimum of 215 150 jobs will be lost due to equal treatment provisions; Between 11 684 and 105 155 jobs will be lost should amendments prescribing wage increases on actual earnings be introduced; Between 38 671 to 80 783 jobs will be lost should amendments to extend collective bargaining agree ments be introduced; and Most importantly these amendments will place signifi cant extra administrative burden on business.
Despite the conclusion of these bills, 2012 will be remem bered as a year when miners in Marikana were killed during an unprotected strike over wage increases. It will also be remembered for the farmworkers strikes in the Western Cape that led to the Minister of Labour issuing a sectorial determination setting wages higher than current going rates. These events provided vital insights into the weaknesses with our labour relations and collective bargaining systems. BUSA continued continued with the implementation of the Decent Work Country Programme. A review of 2011’s activities was conducted and, in October 2012, a Women Entrepreneurship Development and Gender Equality (WEDGE) Workshop was held to take stock of the programme’s achievements in South Africa, Lesotho, Malawi and Mozambique and to discuss the way forward. In addi tion, BUSA participated in a regional Women in Business and Management forum from 15-17 October 2012. Hosted by the International Labour Organisation’s (ILO’s) of fice in Pretoria, in conjunction with the ILO-Bureau for Employers’ Activities (ACT/EMP) and the Regional Office for Africa, various priority outputs were agreed upon. They
included the strengthening of labour inspection systems in the public and private sectors; beefing up the capacity of government and social partners to promote employment equity (and gender equality) in the workplace, and a macro-economic policy supportive of employment creation and decent work outcomes. It also encompassed the identification of policy options to improve working condi tions for the most vulnerable workers (with particular focus on the informal economy); the development of a coherent policy framework for the adoption of employment-intensive investments in green production, and increased support for a new and more inclusive mandatory social security system. As a result of this output, BUSA believes that the capacity of social partners to engage more effectively in social dialogue has been strengthened and the ability of both workers’ and employers’ organisations and bargaining councils to engage more effectively in collective bargaining processes was reinforced. Furthermore, in August 2012, BUSA met with the ILO to discuss areas of collaboration to assist with the implementation of business-related priorities. Work is in progress regarding the analysis of decent work indicators and identification of locally relevant indicators for South Africa. Another involvement of specific relevance to South African trade was BUSA’S participation in the Nedlac negotiations regarding amendments to the Merchant Shipping Act No. 57 of 1951. The amendments were aimed at giving effect to the Consolidated Maritime Labour Convention adopted by the ILO in 2006 and the Work in the Fishing Convention of 2007. The amendments sought to ensure that the act met current demands of merchant shipping and dealt with conditions of employment for seafarers within the current labour rela tions legislation. The negotiations were concluded in September 2012. Turning closer to home, and following a Nedlac presentation by the Department of Health regarding the Green Paper on National Health Insurance (NHI) in January 2012, the BUSA NHI Task Team began drafting a national engagement strategy for health. The strategy is aimed at facilitating the development of a coherent voice and framework for business in the area of public health transformation. On the related issue of HIV/ Aids the Code of Good Practice for HIV/Aids in the work place and its technical assistance guidelines were finalised in 2012 following negotiations at Nedlac which commenced in 2011.Looking more broadly at the impact of skills, education and training on the social policy environment,
BUSA’s 2012 highlights in this sphere were mainly centred on its response to the Green Paper on Post School Education and Training and the Seta Grant Regulations, which were gazetted by the Minister of Higher Education and Training for public comment. The green paper sets out the challenges facing the post school system and sets out broad policy for: • • •
Expanding post-school provision to improve access; Strengthening the institutions to improve quality; and Setting out a vision for achieving a coherent, collabora tive and co-ordinated post school system, as well as alignment between the various institutional types and between education and training institutions and the labour market.
The Seta Grant Regulations, on the other hand, seek to standardise the proportion of funds available for skills development that are spent on administration, among others. The grant regulations, in BUSA’s view, will lead to reduced workplace training which is not good for promoting youth employment. BUSA’s main concerns with the green paper centred on the fact that more focus would be placed on chasing numbers at the expense of quality training. There is also a possibility for a decline in the submission of Work place Skills Plans as a result of the reduction in mandatory grants provided to employers. BUSA, represented by Mthunzi Mdwaba, Nomaxabiso Majokweni, Vanessa Phala, Tanya Cohen, Kaizer Moyane and John Botha had a good, strategic presence at the 101st session of the ILO in Geneva from 30 May to 15 June 2012. Hosted annually by the ILO, all 184 member states were in attendance. The conference addressed three important political and social topics: youth employment, social protection and fundamental principles and rights at work. The discussions on youth employment were timely and useful for South Africa in light of the country’s efforts to drive youth employ ment. The 2012 ILO conference was also the last for outgoing Director-General Juan Somavia. Guy Ryder was elected as the new director-general and assumed office on 1 October 2012. The conference also benefited from the participation of a number of high-level visitors, notably Aung San Suu Kyi. This followed on from the ILO’s resolution to normalise its relations with the government of Myanmar. Business Unity South Africa | One Voice of Business
13
Transformation Policy THE year 2012 marked the conclusion of negotiations regarding the Broad-Based Black Economic Empowerment (B-BBEE) amendments which cabinet approved for public comments in November 2011. One of the constitutional mandates of the transformation policy committee is to design strategies and programmes aimed at the implementation of B-BBEE. In discharging this mandate, the committee commissioned a legal expert to assist in drafting the BUSA position on the B-BBEE Amend ment Bill. BUSA welcomed and supported the amendment bill, in particular the changes dealing with fronting, which should speed up implementation of transformation in the country. While cautioning against the introduction of penalties that could have unintended consequences, BUSA supported the regulation of the verification industry as this will bring about consistency and credibility in the verification regime. BUSA also called for an effective, efficient and independent BEE commission with sufficient enforcement powers. Another significant issue for business resulting from the Amendment Bill was the provision on the “trumping clause” contained in clause 3. In terms of the trumping provision in the B-BBEE Amend ment Bill, the act and its codes would trump any transfor mation provisions in the Mineral and Petroleum Resources Development Act and the Mining Charter where those differ from provisions in the act and its codes. BUSA actively engaged with the Department of Trade and Industry (DTI) on the Bill in general but also specifics such as the trumping provision. Regarding the trumping provi sion, BUSA indicated that the mining industry had had its own long standing legislation dealing with transformation, that is the Mineral and Petroleum Resources Development Act. In terms of this act, a Mining Charter, a scorecard and Social and Labour Plans have been developed collectively by all relevant role players, namely the Department of Mineral Resources, mining companies and trade unions. Through this engagement, BUSA requested that the mining industry be exempted from the application of the “trumping provision”. Negotiations on the bill were concluded at the National Eco nomic Development and Labour Council (Nedlac) during 2012. The Nedlac report, which was submitted to the Parliamentary Portfolio Committee and Trade and Industry, contained areas of agreement and disagreement on propos als tabled by government. The BUSA position on this was guided by the mandated submission. On 5 October 2012, the DTI gazetted the revised BBBEE Codes for public comments. Prior to the publication, Busa invited the DTI to the transformation committee meeting on 12 September 2012 to share the anticipated main amend -
14
Business Unity South Africa | One Voice of Business
ments with members. On 24 October, the department invited BUSA to its workshop on the revised codes to clarify proposed amendments and afford business an opportunity to engage on the matter. On 5 December 2012, BUSA submitted its comments regarding the revised B-BBEE codes to the department and the issues raised included a caution against raising the bar too high, which could have unintended consequences of weakening compliance especially when research by the department has confirmed progress in compliance. BUSA also expressed concerns on the possible impact on foreign direct investment as a result of proposals on owner ship element and the fact that the proposed Seta Grant Regulations were not in place when the codes were gazet ted. Alignment between these is important.
“BUSA welcomed and supported the amendment bill, in particular the changes dealing with fronting, which should speed up implementation of transformation in the country.” The increase from 75% of black beneficiaries to 100% in order to claim a maximum of five points was noted with concern and was not supported by BUSA but the depart ment later withdrew Code Series 500, a move BUSA sup ported. Finally, a number of Transformation Committee projects are dealt with at the Nedlac Development Chamber, the main one being the Women Empowerment and Gender Equity Bill. The bill was tabled at the chamber during 2012 and has been gazetted for public comments. The Nedlac delibera tions on the bill commenced in 2012 and a joint task team between the Development and the Labour Market Chambers was established to deal with the bill. On 22 November 2012, the chamber convened its strategic session, which was chaired by the Business Convenor for the Development Chamber, Fani Xaba. The purpose of the session was to take stock of the chamber’s achievements and agree on the 2013 plan of action. Major milestones achieved by the chamber for 2012 included the finalisation of the Integrated Youth Development Strategy and the National Disability Policy.
Ethics and Corruption BUSA continues to strive to address corruption and unethi cal conduct in the South African business sector. In 2012 the Business Anti-Corruption Awareness Campaign, implemented in partnership with the Department of Public Service and Administration (DPSA) and the Danish Embassy, came to an end. However, during the year, the following initiatives were implemented: •
•
Implementation of the e-training programme on corruption that covered modules such as imperatives for fighting corruption, how to identify corruption, and what to do about corruption. Implementation of the mentorship programme: a total of 50 mentees and eight mentors were involved in the programme, with the aim of facilitating a cross-pollina tion of learning between mentors and mentees to ensure sustainable business growth, increased account ability, transparency and business integrity. The programme, which targeted participants from retail, financial services and construction sectors as well as SMEs, also included networking events that encouraged interaction and engagement between mentors and mentees.
As part of BUSA’s anti-corruption drive, communication and awareness materials such as billboards, brochures and posters were developed between January 2012 to June 2012. The campaign included general anti-corruption messages regarding the Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transac tions and the United Nations Convention against Corrup tion. Billboards were displayed at various airports, including
Durban and Cape Town, and on street poles on main routes around South Africa. While these endeavours aim to broaden the impact of anti-corruption drives to the general public, BUSA continues to believe that corruption must be addressed at the highest levels. To this end, the 3rd CEO Roundtable discussion was held on 26 September 2012 at the Sandton Convention Centre, bringing together various stakeholders from around the country. The focus was on integrity pacts and an international expert from Transparency International was invited to share global best practices.
“BUSA believes that corruption must be addressed at the highest levels. The focus was on the inclusion of integrity pacts in the Treasury Regulations to enhance integrity and prevent corruption and bribery in procurement deals with government.” This topic was particularly important for business and happened during the time when Busa, in collaboration with the National Business Initiative, were in discussions with National Treasury regarding the inclusion of integrity pacts in the Treasury Regulations in order to enhance integrity and prevent corruption and bribery in procurement deals with government. Finally, and as part of the National Anti-Corruption Forum, the leadership of the forum was handed over from business to civil society on 9 December 2012 during the celebration of International Anti-Corruption Day.
Business Unity South Africa | One Voice of Business
15
Media & Communications
DURING the year under review, BUSA not only streamlined the way the organisation communicated with members but also offered members strategic media opportunities. BUSA’s communication for 2012 was more tactical than reactive and was anchored on the organisation’s strategy. In 2013, we will continue to use this approach. The year 2012 was successful from a media relations’ perspective. We made strategic pronouncements on key domestic and international issues. These included the unfortunate events at Marikana, the labour relations challenges in South Africa and how they cripple competitiveness, eTolls, and labour law amendments. In all instances, BUSA communicated tactically and – as such – we gained visibility and improvement of our brand presence in the eyes of our target audiences. Our print presence improved from 1040 Advertising Value Equivalency (AVEs) in 2011 to 1229 in 2012. In broadcast we escalated our visibility from 319 AVEs in 2011 to 553 AVEs in 2012. On behalf of members, BUSA embarked on a strategic and intensive media campaign on the proposed labour law amendments, an issue of critical importance that needed a louder business voice. The focus of our messaging was raising awareness on the impact of these bills should they be enacted. Among the issues we raised was the fact that these bills would raise the cost and complexity of conducting business in South Africa and this would have had considerable negative impact on small businesses. Our media and communications department remains critical to the substantive work produced by BUSA. In 2012 we continued to focus and publicise work done by our standing committee to both our internal and external stakeholders. From a strategic media relations perspective, BUSA contin ued with the tactical placement of the Voice of Business column in Sunday Times, one of the biggest newspapers in South Africa with an audited circulation of 504 000 and a weekly readership of 3.2-million.
16
Business Unity South Africa | One Voice of Business
In this space we have highlighted a variety of key issues for business. This column also allows us to write on more long term thought leadership issues rather than merely reacting to current issues. General feedback on the column has been outstanding. Having recognised the importance of this space, going forward we aim to involve our members more and invite them to contribute columns for this space.
“BUSA embarked on a strategic and intensive media campaign on the proposed labour law amendments.” Internally, we reformatted our email communication, adopting a friendly template sensitive to the fact that members are inundated with email communication on a daily basis and, as a result, our emails need to stand out, be professional and clear on the purpose of communication at first glance. This template-based way of communicating was well received by the majority of our members and, as always, we are committed to continuously improve our communication systems with members.
Trade Investment Promotion
THE year 2012 saw a dynamic active trade and investment promotion portfolio. Some of the major undertakings of this portfolio included facilitating our successful participation at the BRICS Summit in New Delhi, India; launching the US’s Doing Business in Africa Campaign; and hosting a business to business seminar to strengthen ties with French busi ness. BUSA, under the leadership of its President Futhi Mtoba and its CEO Nomaxabiso Majokweni, took a business delegation of more than 50 companies to South Africa’s second BRICS Business Forum in New Delhi. This was held on the margins of the BRICS Summit. The theme was “Partnership for Stability, Security and Growth”. Some of the key commitments that came out of the forum were to encourage governments to take steps to deepen trade engagements among the BRICS countries; to look at enhancing intra-BRICS trade from US$230-billion to at least $500-billion by 2015; and to capitalise on opportunities in sectors such as agriculture, energy, infrastructure, health care and pharmaceuticals, as well as ICT. BUSA also hosted a very successful and focussed business conference with France, the South Africa-France Economic Forum, where more than 100 South African and French companies under their French apex business association (Medef International) convened to further advance South African and French economic ties.
Wolf of Medef International. The programme included six plenaries, business-to-business meetings, a reception and site visits for the French delega tion. Economic co-operation discussions mainly focused on investment opportunities in infrastructure, ICT, renewable energy and a legislative environment conducive to business. Speakers included representatives from companies and organisations such as Standard Bank, Rothschild SA, Group Five, Transnet, Altech Management, 13 Africa, Thales SA, Eskom, Department of Energy, Absa, KPMG, the DTI, and the University of the Witwatersrand. Together with the Corporate Council on Africa (CCA), BUSA hosted Secretary Blank, America’s Acting Secretary for Commerce, when she visited South Africa to promote the Doing Business in Africa Campaign. She described this campaign as a key component of US President Barack Obama’s strategy towards sub-Saharan Africa, a plan aimed at strengthening democratic institu tions, spurring economic growth and trade and investment. The campaign is also aimed at encouraging US companies and African Diaspora-owned businesses to strengthen trade and investment in the continent.
The two-day conference, which took place in October 2012, saw some of our members highlighting the need for both business communities to deepen and further enhance business engagements.
A key element of the campaign is enhancing the co-ordina tion of US government agencies that provide support to American companies trading with and investing in the continent of Africa.
French Ambassador to South Africa, H.E. Jacques Lapouge, informed participants that the 35-strong visiting French business delegation sought to diversify their investments in South Africa. The two-day forum was overseen by the co-chairs, Martin Kingston of Rothschild SA and Gerard
The BUSA-CCA luncheon attracted more than 120 partici pants and was opened by BUSA Vice-President Clive Manci. Manci noted that a number of US policies, such as AGOA, had given impetus to continued economic growth on the continent. Business Unity South Africa | One Voice of Business
17
Busa Parliamentary Office THE BUSA Parliamentary Office (BPO) has two primary mandates: to provide liaison between business and Parlia ment, and to provide BUSA members with latest information on legislative and policy developments at Parliament. Public hearings were the most common platform used BUSA used to engage with Parliament in 2012. They provide a crucial, formal forum through which busi ness opinion may not only be stated, but to which govern ment departments must respond in writing so that Members of Parliament are able to make the most informed decisions when deliberating on legislation affecting the economy. In 2012, BUSA engaged Parliament on a number of key issues, including: • • • • • • • • • • • • •
Current WTO Negotiations The 2012 National Budget The National Health Amendment Bill The Independent Systems and Market Operator Bill National Waste Management Strategy The Labour Relations Amendment Bill The Basic Conditions of Employment Amendment Bill Electricity Distribution The Spatial Planning and Land Use Management Bill The National Water Resources Strategy The Transport Laws Amendment Bill (eTolling) South Africa’s Economic Outlook The 2012 Medium Term Budget Policy Statement
The BPO was also pleased to assist individual BUSA mem -
18
Business Unity South Africa | One Voice of Business
bers in making submissions on new legislation directed at their particular sectors. With the help of the BPO, the Security Industry Alliance (SIA), a BUSA member, made a comprehensive submission to Parliament on a bill targeting private security industry. SIA’s submission contributed to the removal of a proposed provision that had the potential to significantly constrain South Africa’s private security industry. We continue to urge BUSA members interested in influenc ing legislation pertaining to their industries to make use of the services of the BPO. The BPO continued to keep BUSA members informed of parliamentary news via its electronic newsletter Parliamen tary News Watch, which provides updates on the latest legislation tabled at Parliament, as well as reports on deliberations and other parliamentary news. The BPO’s twitter feed (@LeeAtBUSA) continued to provide real-time updates of parliamentary news in 2012. The BPO also continued to engage directly with BUSA members wanting more individualised information relating to legisla tion. We welcome enquiries by all BUSA members and affiliates. BUSA’s leadership was, as usual, invited to represent South African business at all key events on the 2012 parliamentary calendar, including the Opening of Parliament/President’s State of the Nation Address, the Finance Minister’s Budget Speech and Medium-Term Budget Policy Statement.
Membership, Chambers and SME’s General Membership
– World Economic Forum (WEF) – World Bank – International Labour Organisation (ILO) – B20 (Business grouping of the G20 countries) – BRICS – South African Business Coalition on HIV-Aids (SABCOHA) – Business Against Crime (BAC) – National Business Initiative (NBI) – Nepad Business Foundation (NBF) – Business and Industry Advisory Committee to the Organisation for Economic Co-operation and Development (OECD)
The servicing of membership is a key component of what makes BUSA the organisation that it is. In 2012 BUSA’s membership reached a plateau and there was some renewed signs of life into 2013. These latest developments are encouraging. Board of Trustees The Board of Trustees (BoT) membership experienced some challenges with some of the restructuring discussions resulting in some loss in membership during 2012 into 2013. The organisational review revealed a need to further define the role of direct corporate members versus that of business organisation within an apex body and this resulted in some initial uncertainty on the part of BoT’s. The service offering to members of BUSA are as follows: • • • • • • •
Access to a broad range of information affecting business; Input into macro policy formulation; Interaction with all business sectors, legislators, government agencies, international and regional bodies and government representatives, Participation in high level bilaterals between business and the President and his Cabinet Access to the BUSA Parliamentary Office through which presentations to parliament can be facilitated. Direct access to government ministers and senior officials, trade union and community leaders. Receiving information and participation in activities linked to organisations that BUSA has membership of or with whom BUSA has formal links such as:
• • • •
• • • •
Nomination of representatives to serve on BUSAs various committees and structures; Nomination of representatives to serve on external national and international bodies/committees; Having access to lobbying structures at the highest business levels in the country; Receiving expert advice on/participation in: – Economic policy – Social policy – Trade policy – Transformation policy – Chambers of Commerce and Industry – Small and Medium Enterprise (SME) Development Policy Benefitting from research conducted on matters of national and sectoral interest; Participation and feedback on business-related activi ties including Nedlac. Networking with business leaders and experts across various industries and professions. Nomination of representatives from time to time to attend sponsored international training events, includ ing development in the macro business environment.
Business Unity South Africa | One Voice of Business
19
Board of Trustee Members Aerospace Maritime Defence Industries Association (AMD)
UNISECTORAL
Agricultural Business Chamber (ABC)
UNISECTORAL
Agri SA
UNISECTORAL
AHI
CHAMBER OF COMMERCE
AMEO (Automobile Manufacturers Employers Organisation)
UNISECTORAL
Apparel Manufacturers Association of South Africa (AMSA)
UNISECTORAL
Association of Accredited Chambers of Commerce and Industry (AACCI)
CHAMBER OF COMMERCE
Association for Savings and Investment Southern Africa (ASISA)
UNISECTORAL
Banking Association
UNISECTORAL
Black Information Technology Forum (BITF)
LEFT AND RE-INSTATED
Black Women Organisation South Africa (BWOSA)
PROFESSIONALS
Business Leadership South Africa
CORPORATE ASSOCIATIONS
Business Women’s Association (BWA)
PROFESSIONAL SECTOR
Casino Association of South Africa (CASA)
UNISECTORAL
CESA (Consulting Engineers South Africa)
PROFESSIONALS
Chamber of Mines of South Africa (COM)
UNISECTORAL
Chemical and Allied Industries’ Association (CAIA)
UNISECTORAL
Confederation of Associations in the Private Employment Sector (CAPES)
UNISECTORAL
Consumer Goods Council of South Africa (CGCSA)
UNISECTORAL
Financial Intermediaries Association of Southern Africa (FIA)
PROFESSIONALS
Financial Planning Institute of Southern Africa (FPI)
PROFESSIONALS
Information Technology Association (ITA)
UNISECTORAL
Master Builders South Africa (MBSA)
UNISECTORAL
Metal Recycles Association of South Africa (MRA)
UNISECTORAL
National Association of Automotive Component and Allied Manufacturers (NAACAM)
UNISECTORAL
National Association of Automobile Manufacturers of South Africa (NAAMSA)
UNISECTORAL
National Federation of Building Industries (NAFBI)
UNISECTORAL
Retailers’ Association (RA)
UNISECTORAL
Retail Motor Industry (RMI)
UNISECTORAL
South African Agricultural Processors Association (SAAPA)
UNISECTORAL
Road Freight Employers Association (RFEA)
UNISECTORAL
Security Industry Alliance (SIA)
UNISECTORAL
South African Business Coalition on HIV/AIDS (SABCOHA)
UNISECTORAL
South African Bus Operators Association (SABOA)
UNISECTORAL
South African Chamber of Commerce and Industry (SACCI)
CHAMBER OF COMMERCE
South African Federation of Civil Engineering Contractors (SAFCEC)
UNISECTORAL
South African Insurance Association (SAIA)
UNISECTORAL
South African Leisure, Tourism and Hospitality Association (SALTHA)
UNISECTORAL
South African National Co-Operatives Council (SANCOC)
UNISECTORAL
South African Petroleum Industry Association (SAPIA)
UNISECTORAL
South African Property Owners Association (SAPOA)
UNISECTORAL
Steel and Engineering Industries Federation of South Africa (SEIFSA)
UNIECTORAL
Tourism Business Council of South Africa (TBCSA)
UNISECTORAL
United Businesswomen of South Africa (UBSA)
PROFESSIONALS
Real Estate Business Owners of South Africa (REBOSA)
PROFESSIONALS
20
Business Unity South Africa | One Voice of Business
Busa Staff Members 2013
Back row, from left: Wisani Maswanganyi, Sue Klomp, Mary Tshawe, Fergus Marupen, Andile Mnyaka and Katlego Rapoo Middle row, from left: Mbulelo Lolwane, Mpumelelo Mabaso, Lumka Luzipho, Masego Lehihi, Thembi Bentswana, Fredinnah Kgasago and Sbusiso Dlamini Front row, from left: Costa Pierides, CEO Nomaxabiso Majokweni, Raymond Parsons and Ruth Maleka
Business Unity South Africa | One Voice of Business
21
22
Business Unity South Africa | One Voice of Business
Business Unity South Africa | One Voice of Business
23
www.busa.org.za
24
National Office 3 Gwen Lane, Sandton, 2196 PO Box 652807, Benmore, 2010
Parliamentary Office 9 Church Square, Cape Town, 8001 PO Box 3867, Cape Town, 8000
Tel: +27 11 784 8000/1/2/3 Fax: +27 86 609 8248 E-mail: busa@busa.org.za
Tel: +27 11 784 8000/1/2/3 Fax: +27 86 609 8248 E-mail: busa@busa.org.za
Business Unity South Africa | One Voice of Business
Designed/edited by Afrimage Communications | www.afrimage.co.za