fertilizers and feeds bill

FERTILIZERS and FEEDS BILL

SUBMISSION BY THE FERTILIZER SOCIETY OF SOUTH AFRICA

13 March 2013

Who am I?

Adam Mostert Chief Executive Officer of the FSSA Agronomist/Soil Scientist Almost 30 years experience in the fertilizer

industry Joined the FSSA on 1 September 2012

Fertilizers and Feeds Bill (B41 - 2012) 2

Who is the FSSA? Non-profit company with members The FSSA represents its members who are:

Fertilizer producers: Chemical, Organic and Liquid Fertilizer distributors: Locally produced and imported Agricultural lime producers Agricultural lime and gypsum distributors Micro-element producers and distributors Coating and additive producers Speciality fertilizers

20 Ordinary and one Affiliate Members >90% of fertilizer sales in RSA and Zimbabwe


Members of the FSSA Arcelor Mittal Atlas Organic Fertilizers Chemplex Corporation (Zim) Clariant SA Foskor (Pty) Limited Grasland Ondernemings H Pistorius Lime Industrial Commodities Holdings Kalkor (Pty) Limited Lake Internat. Technologies

NWK Limited Omnia Fertilizer PBD Boeredienste Profert (Pty) Limited Sasol Nitro Sidi Pirani (Pty) Limited Triomf Fertilizer (Pty) Ltd Vaalharts Bemestingsdienste Zinchem ZFC Limited (Zimbabwe) Aquasol (pending)

Fertilizers and Feeds Bill (B41 - 2012)

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SA Fertilizer Market

Fertilizer market of ± 2 million tons/annum Lime market of 0,5 to 1 million tons/annum Almost 50% of fertilizers are imported in SA Large number of blending facilities and

distributors are supplied by primary producers and importers/traders

“Garden & Home” market Small Scale Farming market


FSSA Code of Conduct (abstract)

Act in accordance with the letter and spirit of laws and regulations which have relevance on the fertilizer and agricultural lime industries.

Support and promote manufacturing, production and application practices with due concern for human health and the environment.


Code of Conduct (abstract)(Continue) Continuously take into account the

requirements of the Competition Act Apply the highest ethics of business practice

in dealings with customers, suppliers and competitors (Consumer Protection Act)


Bill Review Process

All members were asked for comments and inputs on the new Bill (Dec – Feb 2013)

All comments received from members were included in the report submitted to Parliament

At least three members obtained legal opinions which were included in the report

Members were given the opportunity to comment on the report prior to submission


The FSSA acknowledges:

the need for regulation of the fertilizer industry as far as product quality is concerned;

the important role that fertilizer plays in food production;

the need for protection of consumers and users of fertilizer;

the need to replace Act 36 of 1947, although not urgent.


The FSSA’s Position

We REJECT the Bill in its current format; We request separate Bills for Feeds and

Fertilizers; We request a transparent consultation

process to redesign the Fertilizer Bill; With sign-off from all parties before the Bill

is published.


FSSA’s Expectations

Strict control of fertilizer quality - governance Efficient administration of the Act A level playing field for:

Small versus large fertilizer suppliers Local product versus imported product

To ensure the availability of sufficient quantities of good quality fertilizers (plant food) for sustainable food production in the short, medium and long term.


Objections and Reasons for Rejection The Bill does not meet its objective of

ensuring safe food production and food security;

The need for an Advisory Council is questioned and the proposed composition thereof is unacceptable;

Registration of production facilities instead of final product is unacceptable.


Food Production and Food Security The Bill must state clearly how it will support:

food production; food safety; and food security.

Bill must be clear on what the fertilizer industry and other stake holders must do to support the above.


Technical Standards Advisory Council Powers should be detailed and limited Industry stakeholders must be consulted FSSA should be represented on the Council FSSA should be consulted in appointment

of advisors Specialist consultative committees will do

the work – why duplicate and add cost to the taxpayer?


Disqualification and Dissolution of Council Section 6(2)(b) refers to a hearing No hearing process and procedures Discretion of the Registrar disempowering

the industry No consultation required


Product Registration Procedure

Product registration should continue because it will be difficult to control unregistered product

Streamline the registration process – FSSA is prepared to assist with the registrations

Long turnaround time of registrations and renewals put the industry at risk

Bill has to make provision for specific time frames and be clear on what has to be registered

Consumer Protection Act?Fertilizers and Feeds Bill (B41 - 2012) 16

Imported Product

Three types of imported products Raw materials for chemical fertilizer production,

e.g. ammonia and potassium chloride; Intermediate products for bulk blending, e.g. di-

ammonium phosphate (DAP); Final product for direct application.

Potential for poor quality product containing harmful elements is huge in the latter two

Strict control at ports is non-negotiableFertilizers and Feeds Bill (B41 - 2012) 17

Exported Product

Specifications are negotiated between buyer and seller or specified by the buyer;

Regulations of the importing country apply; No registration or control is required in SA


Licensing of Facilities

FSSA objects to the licensing of premises in principle

FSSA objects to tonnage based licensing Control over declared tonnage will be

difficult to enforce and administrate Discrimination against larger producers Fees = tax double taxation


Licensing of Facilities

Not the mandate of DAFF to regulate factories; Other departments do audits on occupation,

safety, health and the environment in terms of the applicable acts;

Voluntary implementation of quality management systems, e.g. ISO 7000, 14000 and 18 000 by the factories;

Ideal case for self-regulation by the industry


Tonnage Fees Payable

Fee structure is unknown Massive financial implications for industry? Large volume of small product range

producers will pay unfair high fees – fees not related to actual costs incurred by DAFF

Fees should cover actual costs of either auditing plants or registration of product

Slow product registration - facilities?Fertilizers and Feeds Bill (B41 - 2012) 21

Rules of Commerce

It is not practical to provide an invoice for each load of product

Invoices are not issued by the despatch department to prevent fraud and achieve segregation of duties

Bulk invoices cannot be generated in advance

Delivery note should be sufficient


Natural Scientists

Section 28: recommendations to farmers must be done by a registered scientist (Act)

FSSA proposes: Recommendation by unregistered personnel

Overseen by internal registered natural scientist


Advertisements

FSSA objects to approval of all advertisements by the Registrar

Duplication of regulations by ASA Registrar may have the power to call for

withdrawal of advertisements under certain conditions, e.g. unregistered product or misleading claims


Conclusion

FSSA rejects the Bill as presented FSSA requests the withdrawal of the Bill FSSA requests a separate Fertilizer Bill FSSA requests an open and transparent

consultation process to redesign the Bill FSSA pledge their full support for this

process


Fertilizers and Feeds Bill (B41 - 2012)

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fertilizers and feeds bill

Documents

feeds bill b41

new bill

feeds billsubmission

bill review processall

fertilizer producers

fertilizer sales

fertilizer industryjoined

membersthe fssa