South African Business licensing bill Progress Update

By StreetNet International
February 18, 2014
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The South African Traders Alliance and StreetNet International are part of a Task Team of the Department of Trade and Industries to determine the feasibility of this bill and to recommend a way forward.

The bill of 18 March 2013 has been withdrawn and work is in progress to develop a new or revised bill. According to Department of Trade and Industries (DTI) Minister, Dr Rob Davies, the initial bill was intended as an instrument to address “unfair competition from illegally operating businesses” which sometimes provides a cover for activities such as money laundering, sale of counterfeit goods, etc.

The Task Team consists of seven representatives from five sectors, which are from the Informal sector, Big Corporates, Labour, SME and Immigrants. The members are:

Ms. Pat Horn, StreetNet, Rep. Informal Economy
Mr. Mampapatla Madikoto, South African Informal Traders Alliance (SAITA) Rep. Informal Economy
Mr. Pietman Roos, South African Chamber of Commerce Industry (SACCI), Rep. Big Corporates.
Mr Mpheane Lepaku, Congress of South African Traders Unions (COSATU), Rep. Labour.
Ms. Roshan Dadoo, Consortium of Refugees and Migrants South Africa (CORMSA), Rep. Immigrant Community
Mr. Vusi Nhlapo, National African Chamber of Commerce and Industry (NAFCOC), Rep. SMEs
Mr. Alan Campbell, Foundation of African Business Consumer Services (FABCOS), Rep. SMEs

Submissions had been received (during the first 30-day period following the tabling of the Bill in parliament on 18th March 2013) from different organisations opposing the bill due to the following reasons:

  • Cost of Implementation of the Bill
  • Capacity problems for enforcement
  • Exclusion of illiterate traders
  • Unconstitutionality of the Bill
  • Additional burden on businesses  
  • Lack of database information
  • Problems with the way the bill targeted foreign nationals
  • Recognition of existing laws

  There was a concern about what effect the bill would have in the informal Economy. This sector is characterised by people who are previously disadvantaged, “often not recognised or protected under legal and regulatory frameworks. There is a high degree of vulnerability, poverty, and decent work deficits.” (ILO Resolution on Decent Work and the Informal Economy adopted at the 90th session of the International Labour Conference in Geneva, June 2002)
The consultation currently in process is primarily looking into the following aspects:

  • How would it be best to consult with the Business Community with a view of licensing/registering them in order to conduct business in a structured way?
  • How can the new instrument be aligned with the Refugee Act and Immigration Act without inciting xenophobic tendency?
  • How will the collation of information with the person/s involved in an economic activity be done without introducing a burden to a person or businesses?
  • How can the licensing/ registration be done without introducing unnecessary costs?
  • How best to construct a National Database on anybody that is involved in an economic activity without introducing costs and regulatory burden,
  • How best to build capacity, e.g. enforcement, prosecution at national provincial and municipality level,
  • How best to align / synchronise licensing / registration processes at national/provincial and municipality levels that will lead to harmonisation of laws without introducing costs and regulatory burden, and
  • The corruption related to regulation of business licensing/registration at national, provincial and municipal levels and recommend appropriately. 

The Task Team are involved so that they can:

  • Promote the right to freedom of trade, occupation, profession and any rights contained in the Constitution;
  • Promote the development of South African economy by providing a standardised regulatory framework within which business licensing would take place;
  • To encourage a conducive environment that promotes compliance and sustainability of businesses;
  • Set essential norms and standards applicable nationally, provincially and in municipalities relating to licensing of businesses.
  • Further, it is important for statistical and service delivery purposes that a national, provincial and municipal register of all businesses should be kept.

Pat Horn, International Coordinator from StreetNet stated that the focus should not be on the old bill that has been withdrawn and instead on a new one.  StreetNet is concerned about the lack of progress. A lot of money is being spent to discuss the withdrawn bill, rather than discussing a new instrument. The DTI are taking everyone’s input in to consideration, which we hope to see included in the report.

Mr. Mampapatla Madikoto, from the South African Informal Traders Alliance (SAITA) commented that this process of Business Licensing Bill is frustrating many people.  “If one starts to look up close, they will understand that we do not have the same understanding of this bill and its intentions. Dr Rob Davies said that it was created to stop illegal activity.

If one compares the statement and the contents of the draft, it does not match. We have to go back to the Task Team and the facilitators to re-address this, as it is confusing. A proper direction is needed by the DTI and they need to clarify issues with everyone in the various task teams. “ Madikoto concluded.

So far two task team meetings and one workshop had been held at the end of 2013. Seven consultation workshops have taken place in six provinces and a further four workshops in three other provinces are planned for after January 2014. The outputs from the workshops, together with the written submissions received and expert opinions on particular areas of concern to be written up by members of the Task Team, will be compiled into a Task Team report, which will feed into the process of drafting the new instrument. The Task Team mandate has been extended from 31 October 2013 to 31 March 2014

Once the new instrument has been drafted, DTI has promised that it will be presented to the Trade & Industry Chamber of NEDLAC (National Economic, Development & Labour Council) for discussion by the social partners government, business, labour and the community constituency. After this it can be submitted to Parliament, where, after it goes into a public process which includes another 30 days for submissions by all interested parties. It is likely that this will only take place after the national South African elections scheduled for 7 May 2014.

StreetNet International is a worker organisation that represents informal workers at an international level. StreetNet promotes the exchange of information and highlights critical issues facing Street Vendors using strategies such as collective negotiations between street vendors and municipalities, advocacy, campaigning and practical organising. StreetNet currently has 48 affiliates in 42 countries with a membership comprising of over half a million informal workers. In South Africa, the Eastern Cape Street Vendors Alliance and Durban based Ubumbano Traders Alliance are affiliated to StreetNet International.

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