global south african news wrap 18 january 2013

7/29/2019 Global South African News Wrap 18 January 2013

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Global South African News Wrap 18 January 2013

SA's running out of time to tackle education woes

Zuma comment gives the lie to ANC pledge of clean governance

Exodus to private schools shows no end

Steep increase in service protests

New mining law changes could deter investors

DA questions cost of troop deployment

Schools still in turmoil

Confusion reigns over end to Cape farm strike

Load-shedding fears rise

Cope squabble finally coming to a head

Ramaphosa reviewing business interests

State nails AngloDurban may see founding of Brics bank

Headless SIU takes bite out of Zumas credibility

Institute optimistic about SAs future

Backlash as Amplats shuts shafts, slashes jobs

Malema lays charges against friend

Mazibuko wants JZ to explain irresponsible statement

Eskom hikes unite business, labour

ANC leadership has work cut out for 2014 elections

Businesses that back ANC will prosper MthembuMazibuko is not African, says ANC

Zille thumps Mthethwa

Crunch time for SA miners

ANC still has review of judiciarys powers in its sights

Cape farmers vow to address social ills

State backs higher tariffs to protect South African industries

Agriculture sector unrest to remain in spotlight

Tough love is what's needed to save ANC

Minister splurges R3.7 million on ANC art

Now for economic nationalism

Marikana legal funds dry up

Zuma talks tough


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17 January 2013Financial MailPage 25Gillian Jones

SA's running out of time to tackle education woes

The litany of ills besetting SAs education system has become afamiliar refrain at the start of the education calendar. Almost 20 years sincethe post-apartheid government started a turnaround of the system, it hasbecome clear that SA is running out of time to fix the numerous problems.

Fixing the distortions of the education system was always going to be one ofthe biggest challenges of post-apartheid SA.

And while much effort has gone into repairing a woefully unequal system, SAhas not reaped a decent return on its investment and industry players are nowwarning that time is running out for SA to stage an adequate turnaround.

For almost two decades, government has devoted the largest share of itsbudget to the public education system, but with disappointing results:

The quality of matric passes does not adequately prepare the majority ofstudents for university study;

Rural and township schools still suffer backlogs in infrastructure and with thedelivery of materials;

About 80% of the education budget is spent on staff, but there is a lack ofaccountability regarding performance;

There is a lack of political will from government to enforce standards, such asperformance contracts with teachers;

SA has tinkered too much with policy, but without much success.

Getting the education system to function properly is key to SA's attainingbetter economic growth, which is sorely needed to boost employment.

A study suggests that if SA were to improve its school performance to onemore typical of a middle-income country, gross domestic product (GDP) couldbe R550bn or 23% higher than it is now.

Graeme Bloch, senior researcher with the Mapungubwe Institute, says ifexisting plans were immediately implemented, SA education might turnaround by 2030.

"If we start now, it will take at least two generations to get education right,possibly by 2030. We have the basis of plans, such as the National


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Development Plan, but we don't have implementation strategies, so even thechance of getting it right by 2030 is slim."

One of the main criticisms of the ANC government is that, post-1994, it placedmore emphasis, and thus spending, on achieving equality in education, rather

than providing quality learning.

Almost 19 years later, the system is still largely racially divided, with mostblack schools performing poorly while formerly white schools do relativelywell. Black and coloured students in the main are placed at a disadvantage inthe labour market, and poverty and inequality remain entrenched.

The World Economic Forum has ranked the quality of SA's state education133rd out of 142 countries in its 2011-2012 World Competitiveness Reportand students perform badly in standardised global tests against SA's peersand other African countries.

Describing the need for "urgent" action, the National Development Planadmits: "The quality of school education for most black learners is poor."

Yet expenditure on education has increased almost five-fold from R43bn inthe 2000/2001 financial year to R211,5bn in 2012/2013 and a budgetedR234bn in 2013/2014.

Though it's the largest single line item on government's budget and accountsfor 21% of the total, the funding provides little hope that the situation willimprove any time soon.

Martin Prew, an education development specialist and visiting fellow at WitsUniversity's School of Education, uses the example of Zimbabwe to illustratewhy money and changing policy are not the only answers.

"In SA we deal with failure as a nation by layer on layer of new policies andinterventions. Sometimes it would be much better to pull back and give spaceand support and a level of policy and financial stability to schools. This isexactly what Zimbabwe did at a similar stage of its own development. Theyquietly built new schools and made very few policy changes."

In 2009, the department of education was split into the departments of basiceducation and higher education. Basic education receives the lion's share ofthe budget - R179,8bn in the 2012/2013 financial year. Of this, R16,2bn goesto the national department and R163,6bn to the provinces.

Higher education was allocated R41,1bn for 2012/2013. Of this, R9,6bn isearmarked for skills levies that go to the sector education & trainingauthorities and the National Skills Fund. Excluding the levies, thedepartment's budget increased 11,7% from R28,2bn in 2011/2012 to R31,5bnfor 2012/2013.


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The basic education department's annual performance plan for 2012-2015says that spending on primary and secondary education as a proportion ofgross national product (GNP) in SA compares well to other countries - 4%,against an average of 3,1% for developing countries and 2,9% in sub-Saharan Africa. (See graphic on page 26.)

However, lobby group Equal Education argues spending per pupil iscomparatively low in real terms as SA's GNP and GDP are much smaller thanthose of developed countries.

"According to Unesco's Institute for Statistics (2008), the entire sub-SaharanAfrican region spends less on education than a single country like Germany orthe UK. The UK spends approximately $1962 of its GDP per capita oneducation per year while SA spends $436, less than a quarter. Finland - acountry much lauded for its outstanding results in literacy and numeracy -spends an extraordinary $5502 of its GDP per capita on education," says

Equal Education.

Despite the substantial education budget, there appears to be inadequateinformation available to justify how it is allocated.

In his book The Toxic Mix: What's Wrong With South Africa's Schools andHow To Fix It, Bloch argues that limited research has been done onmeasuring the effect of school spending.

He says there isn't comprehensive evidence of where the spending hasworked and where it hasn't.

A range of statistics exist, but the data is often inconsistent. Many peoplehave done bits of research, but with little coherence, he says.

"What goes on in classrooms is often anybody's guess," he adds, "yet this isfrequently one of the most important sites of learning."

Bloch says this could lead to the cynical view that policy making is "purelycoincidental, a case of who gets together, who has influence, and what theircommon assumptions turn out to be".

On the other hand, Prew believes there is a reasonably good research basefor most issues in education.

"But I am not sure how well those different studies have been pulled togetherto get a very clear picture overall. Not all the information has been madepublic and there is some quite important information sitting on people's desksand not in the public domain."

Despite the patchy research, Bloch says there is enough information toconclude that the quality of the education system is inadequate. And throwing

more money at it will not fix the problems.


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Prof Servaas van der Berg, economics professor at Stellenbosch University,agrees: "I am not optimistic that money will bring the solution, but structures tocreate accountability will."

The lack of accountability stretches across the education system, from the

spending of the budget to the performance of teachers, officials andprincipals, to politicians passing the buck when confronted by problems ofincompetence and corruption and the machinations of the SA DemocraticTeachers' Union (Sadtu).

Stellenbosch University researcher Nicholas Spaull believes the lack ofaccountability weakens the effectiveness of the funding.

"A lack of accountability and capacity within the public education sectormeans that money which is allocated is either not spent, or not spent on theright things, with the effect often being diluted by incompetence and corruption

at all levels."

In addition, national treasury has little say in what happens to a large portionof the education budget, as it is allocated to provinces to spend as they seefit. The constitution defines education delivery as a provincial competence atthe school level, says Bloch. So while policy development happens at nationalgovernment level, much of the school delivery happens at provincial level.

"It goes into the provincial kitty and then the provincial MEC for financedecides what to do with it," says Bloch.

"Often what you'll get, as we saw in the Eastern Cape, is the MEC will decideto spend money on officials rather than on [fixing] mud schools. Thoughprovinces have certain responsibilities for delivery and are meant to obeynorms and standards set by national government, there are often none set. Asthey can reallocate the money to areas besides education, this is one placemoney can disappear," says Bloch.

Spaull says that provinces are not equally capable of spending their educationbudgets effectively.

"The levels of administrative, managerial and bureaucratic competence, aswell as the levels of institutional accountability, vary widely across provinces.There is more opportunity for corruption where there is less publicaccountability, fewer institutional checks and balances and more politicalinterference."

For the 2012/2013 financial year, R163,7bn was allocated to provinces foreducation - the largest item, at 42%, on total provincial budgets. Of this,R127,5bn was budgeted for personnel as teachers' and officials' salaries takeup the bulk of the basic education budget.

"The target for the salary bill was always 80% of provincial education budgetsand that is reasonable for a developing country," says Mary Metcalfe,


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education specialist at the Development Bank of Southern Africa and visitingadjunct professor at the University of the Witwatersrand.

But it has spiralled in some provinces. In Limpopo, salaries make up 93% ofspending in the 2012/2013 financial year. The province's education MEC,

Dickson Masemola, reportedly blamed the nondelivery of textbooks last yearon lack of funds because of the high salary bill.

Salaries make up 90% of the 2012/2013 education budget in the EasternCape, 87% in Mpumalanga and the Northern Cape and 86% in the NorthWest, according to a written response given by basic education minister AngieMotshekga to parliament last year.

The runaway salary bill is a result of the introduction in 2008 of the occupationspecific dispensation (OSD), which attempted to close the gap betweenteachers' pay and that of other professionals. It was also meant to link

teachers' pay to performance.

In practice, this is tricky.

Stellenbosch University education economist Martin Gustafsson saysteachers are evaluated annually by the school principal and some peers. "Ifyou are not deemed at least satisfactory you don't get the increment of about1%/year. But almost everyone gets that increase, so in effect it's not really aperformance increase."

The unions, particularly Sadtu, have been blamed for blocking performance-related increases, but Gustafsson argues it is not just a question of a lack ofpolitical will but technically quite difficult to link teacher pay and performance.

"You can't really use children's test results because they are taught by manyteachers. For example, English proficiency determines maths proficiency, andprevious years' proficiency in subjects will affect the following years."

He suggests the best system to use is that of a group-based reward where if aschool does well, its teachers are rewarded.

Determining what effect the introduction of the OSD increase has had onteacher performance is complicated by the fact that the OSD wasimplemented at the same time as teachers benefited from substantial wageincreases granted to the public sector.

"If we don't see improvements in pupils' performance, we are going to have toask why we are paying teachers more," Gustafsson says.

Sadtu rejects the idea of linking teachers' salaries to school performance,says general secretary Mugwena Maluleke.

"It is not only the teacher who contributes to the education system; manyfactors are involved. How do you monitor parental involvement or


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socioeconomic circumstances? We are in line with the resolution taken byEducation International, a global teacher union federation, that no teachermust take performance-related pay because teaching is not about bakingbread," he says.

Contrary to popular perception, SA school teachers are paid relatively well.

"It is not far from the level found in certain rich countries in terms ofpurchasing power, and it is well above the Latin American middle-incomecountry level. And if one examines the relationship between teacher pay andGDP per capita, then the level in SA is well above what is seen in LatinAmerica and rich countries," says Gustafsson.

He points out that this is not unique to teachers, as all professionals in SAenjoy exceptionally high purchasing power relative to the country's level ofdevelopment. This is probably linked to the country's acute skills shortage and

high level of structural unemployment. Teachers' pay, however, is still belowthat of other professionals.

Gustafsson says determining a sufficient level of teacher pay is complex, andlittle analysis has been done in SA. Van der Berg says many teachers areoverpaid in terms of the quality of education they provide.

"If one thinks of the extremely low levels of learning taking place in many ofthese schools, either teachers are not very knowledgeable or they are notworking diligently enough. I think the unions are part of the problem and makeit difficult for education authorities to put stronger accountability mechanismsin place," he says.

Maluleke rejects the argument that teachers are relatively well paid.

"We are not satisfied with the basic salary. The minister for basic educationhas even acknowledged that teachers are underpaid. Therefore we can't talkabout pay and performance when teachers are underpaid."

With salaries taking up the bulk of the budget, the introduction of no-feeschools has not reduced inequalities but has entrenched poverty in poorer

schools.

In the 1990s, in an effort to address past inequalities, schools were assigneda poverty ranking status based on a quintile system. Schools receive agovernment grant based on this quintile, but it excludes salaries. As salariesmake up such a large portion of provincial education spend, Prew says, thegrant has limited redistributive effect.

The poorest three quintiles - 60% of government schools - are now no-feeinstitutions.

Equal Education says the history of unequal spending under apartheid hasbeen perpetuated by the unintended consequences of no-fee schools. They


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cannot charge parents school fees, while the richer public schools can do so.This allows the richer schools to attract better teachers as they can top uppay.

Post-apartheid, government's emphasis was on getting children into school

and it has succeeded in providing almost universal access to primary schools.

In a report prepared for the national planning commission, educationspecialist Nick Taylor says: "With a participation rate of 95% for children aged6-15, SA is on a par with, or even above, what is considered to be a feasibletarget for participation in education, especially for a developing country."

So up until grade 11, SA fares relatively well by international comparison. Theproblem lies after this. Given the emphasis on obtaining a National SeniorCertificate (NSC) - formerly a matric - schools may create distortions toimprove their results, says Taylor.

Taylor says there is evidence that pass rate improvements in 2010 were partlyattributable to moving high-risk students to part-time registration, which doesnot contribute to the pass rate, or moving them to easier subjects at theexpense of maths and science. Pupils may also be screened at the end ofgrade 11, leading to a substantial reduction in those who go on to grade 12.

"Most strikingly, nearly one-third of the grade 11 cohort does not make it tograde 12. Grade 11 is an illogical point at which to exit the school system,"Taylor says.

Though some of these children might transfer to further education & training(FET) colleges, it would make more sense to do so at the end of grade 9 or10.

The recent fanfare about an NSC pass rate of 73,9% for the 2012 year - anincrease of 3,7 percentage points from 2011 - is also misleading. Spaullexplains that this figure ignores the fact that about half of those who startedschool had already dropped out by grade 12. (See graphic page 27.)

According to Equal Education, 378466 pupils passed matric in 2012.

However, this was out of a group of 1150637 pupils who started grade 1. Soonly 32,9% of the original number of schoolgoers obtained the NSC.

Of even greater concern is the drop-out rate that takes place between grade10 and matric. For 2012, Equal Education estimates the dropout rate was51%.

Spaull adds that in the poorest 80% of schools, only 1% of learners in grade 8will pass matric and obtain 60% or higher for maths and science.

Around 10 times as many students reach this level in the wealthiest 20% of

schools. He attributes the high dropout rate in secondary school to theinadequate foundation skills children are acquiring in earlier grades.


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Besides the difficulty of keeping children in the school system, the quality ofthe education is also a problem. One indicator is the number who obtained abachelor level pass, which allows for admission to an undergraduate degreeprogramme.

The number of pupils achieving this pass has increased by 66% between2012 and 2013, says Metcalfe. The number of pupils achieving the lowestcategory of pass has increased by only 20% over the same period.

So this increase may have been bought at the cost of quality, says Taylor.

Gustafsson warns that it is difficult to use these figures to determine whetherthe quality of matric passes is improving. "The number of people gettingbachelor level passes is partly a result of their subject choices, which changesfrom year to year. It is difficult to attribute any improvement to quality or topeople migrating to easier subject combinations."

The percentage of pupils getting bachelor passes remained static for years,so Prew finds it "interesting" that it has started to improve.

"But you don't want it to improve too much or too fast as it creates anupstream problem at university entrance."

A better indication of the quality of basic education would be the increase inthe number of pupils getting a good pass in maths and science.

Offering a glimmer of good news to the dismal outlook, Gustafsson suggeststhat a valuable indication of improvement can be found in the recentlyreleased Trends in Mathematics & Science Study (Timss) results - what hecalls "one of the most trustworthy sources of academic improvement thatexists in the world".

In the results released in December by the Human Sciences ResearchCouncil, which conducted the tests, the public school sector had shownimprovement from 2002 to 2011 by 63 points in the national average mathsscore and by 60 points in science. According to the HSRC, Timss estimatesthat over a four-year testing cycle a country could improve by a maximum of

40 points, or one grade level, so SA has improved by one and a half gradelevels over two cycles.

"This is perhaps the most positive news in education in the past 15 years,"says Gustafsson.

It is off a very low base and SA still performs poorly, but as the average Timssscore had remained static from 1995 to 1999 and 2002 when SA took part inthe assessments, an improvement is a step in the right direction.

It is difficult to determine whether the education budget is allocated in an

optimal proportion between basic and higher education. Some people, likeSpaull, believe primary school education is paramount to getting foundation


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skills in place. Others argue that more attention needs to be focused on post-school education as improvement at this level contributes more to economicgrowth. "Relatively speaking, there has been over-investment in enrolments inschooling and under-investment in enrolments in post-school institutions,"says Gustafsson.

Though government funding of universities has remained more or lessconstant, its spend per student has decreased as enrolments have grown.

SA's higher education sector is skewed towards universities, rather than FETcolleges. According to Taylor, "for every 100 students enrolled in FET thereare 161 enrolled in higher education, which is the inverse of what happens insystems that function well".

Reflecting SA's obsession with the importance of achieving a "matric",enrolments in technical high schools and FET colleges combined make up

only around 20% of total enrolments at upper secondary education levels.

"There's a strong idealistic point of view in SA that everyone must finishmatric," says Gustafsson, adding that this is partly a result of having nonational exam below grade 12.

It is expensive for a developing country to get everyone to complete matric, hesays, and suggests the introduction of a national exam at grade 9 since over60% do not finish grade 12. Those with a grade 9 level qualification might bemore employable than a dropout with nothing. It would also ensure schoolsfocused on quality earlier in the educational process, not just on getting pupilsthrough matric.

Though the education department has discussed introducing a grade 9 levelcertification, nothing has come of it.

Higher education minister Blade Nzimande has placed greater emphasis ongrowing enrolments in FET colleges faster than those of the universities. Hisdepartment sets a medium-term goal of 800000 enrolments. National treasuryexpects an increase from 211000 in 2011/2012 to 247000 in 2014/2015.

But expanding FET access is questionable, argues Gustafsson, saying threeyears of intensive training is not appropriate for a country with highunemployment and that students should get short, vocational training.

The same questions about efficiency can apply to increasing universityenrolments. The Council on Higher Education says expanding enrolment isnot an efficient way to increase graduate output, given the 30% dropout in thefirst year.

SA has ignored the role the private sector could play in providing tertiaryeducation, as it does in Brazil, China or South Korea.


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Bloch says calls for privatisation of basic education are misguided. "There isthis romantic notion by some business people that if only the private sectorran the schools, all would be okay. But if government gave up education, itwould affect over 90% of the pupils. The challenge is to fix the 28000 publicschools. "

The NDP points out that in the next 20 years, SA will enjoy a "demographicdividend" when its population growth rate slows and life expectancyincreases, with a large youth and working-age population and proportionallyfewer very old and very young. This profile was a boon for economic growth inAsian countries.

But for SA to capitalise on this it needs to urgently fix its dysfunctionaleducation system.

17 January 2013Business DayPage 5Paul Hoffman

Zuma comment gives the lie to ANC pledge of clean governance

THE facts are simple: addressing the businesspeople attending the AfricanNational Congresss (ANCs) 101st birthday celebrations, President JacobZuma is reported to have said: "Everything you touch will multiply. Ive alwayssaid that a wise businessperson will support the ANC, because supporting theANC means youre investing very well in your business."

Any possible ambiguity in the meaning of the word "support" as used by Zumahas been cleared up by ANC spokesman Jackson Mthembu, who claims hisleader was wishing prosperity to those who offer gifts, apparently inaccordance with what he calls "African cultural practices".

The implication is accordingly clear: those who offer gifts to the ANC canexpect their "investment" to "multiply". Notice that it is a gift that is expectedand that Zuma appears to have been promising rather than wishing prosperity

to those who support the ANC.

The ANC is a political party. It does not of itself have the means to makeinvestments multiply.

On the contrary, like all political parties, it is a voracious consumer ofresources in its efforts to garner support at the polls and remain in power,election after election.

No "dividend" is ever declared by the ANC, it spends and spends again onstaff, election campaigning, offices, transport, T-shirts, flags, banners, posters

and entertainment.


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It follows inexorably that the way in which the encouragement to donaterenders a return to "investors" is via the procurement machinery of thoselevers of power in the state that the ANC is able to control by virtue of itsdominance in politics.

But the resources of the state do not belong to the ANC, they belong to thepeople of SA.

Our freely elected representatives are meant, in the words of the preamble tothe constitution, to "improve the quality of life of all citizens and free thepotential of each person", not merely benefit donors to the ANC.

The nations system of procurement is designed and intended to ensure thatthe type of outcome Zuma envisages cannot eventuate. Section 217 of theconstitution says the procurement of goods and services must be done "inaccordance with a system which is fair, equitable, transparent, competitive

and cost-effective". These principles are fleshed out in the Public FinanceManagement Act; they leave no room whatsoever for ANC donors to haveeverything they touch multiply simply through being donors. Conductinconsistent with these principles is invalid. Nepotism, cronyism, indeed allforms of favouritism, are in essence outlawed by the principles according towhich procurement is meant to be effected. It is impossible for the ANC tomultiply the investments of its donors in a way that is countenanced by thelaw and the constitution. On the contrary, the provisions of the ANC-inspiredlaws on corruption make Zumas utterance good grounds for investigating theprobity of what he said at the fundraising dinner. Here is the description ofwhat the law defines as the general offence of corruption: "Any person who,directly or indirectly: (a) accepts or agrees or offers to accept any gratificationfrom any other person, whether for the benefit of himself or herself or for thebenefit of another person; or (b) gives or agrees or offers to give to any otherperson any gratification, whether for the benefit of that other person or for thebenefit of another person, in order to act, personally or by influencing anotherperson so to act, in a manner: (i) that amounts to the: (aa) illegal, dishonest,unauthorised, incomplete, or biased; or (bb) misuse or selling of information ormaterial acquired in the course of the exercise, carrying out or performance ofany powers, duties or functions arising out of a constitutional, statutory,contractual or any other legal obligation; (ii) that amounts to: (aa) the abuse of

a position of authority; (bb) a breach of trust; or (cc) the violation of a legalduty or a set of rules, (iii) designed to achieve an unjustified result; or (iv) thatamounts to any other unauthorised or improper inducement to do or not to doanything, is guilty of the offence of corruption."

Whether some nebulous African cultural practice is in play does not matter onthe basis of the definition set out above and the applicability of the criminallaw to everyone. If there is a practice of the kind contended for by the ANC, itis illegal due to the broad ambit of the law on corruption.

It is accordingly appropriate that the opposition parties and others have called

for the retraction of the statement made by Zuma.


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The Inkatha Freedom Party has called on business not to be party to thepromotion of corruption. It also suggests that the ANC should distance itselffrom "this unfortunate statement or else admit that they are paying lip serviceto the fight against corruption, which threatens to sink our country".

Somewhat more circumspectly, Lindiwe Mazibuko, the Democratic Alliancesparliamentary leader, relies on an appeal to good governance and has givennotice that she will submit a parliamentary question about whether multiplyingthe fortunes of businesses that support the ANC is in fact government policy.She points to the blurring of the line between party and state, the Nkandlaupgrade and the ANCs unwillingness to support private members bills aimedat preventing state employees from doing business with the state and atkeeping business and politics separate.

The response of the ANC is instructive. "If business wants to prosper in SA,they have to support the ANC as their prosperity is dependent on the ANC

being at the helm of SAs government." Before issuing this official statement,Mthembu remarked: "I am not sure whether Lindiwe is African", which is anew way of playing the race card that is used whenever no rational responseto accurate criticism suggests itself.

Hitachi Power Africa, 25% owned by the ANC via Chancellor House, hascertainly prospered in business in SA.

William Gumede says the ANC will receive a dividend stream of about R5,8bnfrom its "business" involvement in the construction of new power stationboilers for Eskom, a state-owned enterprise. Whether fair elections are evenpossible in these circumstances is a matter the Independent ElectoralCommission should investigate as part of its mandate to "ensure free and fairelections".

If the ANCs protestations that it is serious about tackling corruption aresincere, it should embrace the reasoning of the Constitutional Court and put inplace an independent, effective and efficient anticorruption entity, either in theform of a new chapter nine institution or by way of expanding the mandate ofthe public protector.

Until it does, the ANCs critics who claim that it is soft on corruption and that itpays lip service to combating corrupt activities have a valid point.

Litigation concerning the review of the decision to drop 783 charges ofcorruption against Zuma, the outcome of the arms deals inquiry and a soundand sober investigation of the activities of Chancellor House, the ANCsinvestment arm, could reveal the extent of the commitment of the ANC towinkling out corruption wherever it is found.

Businesses that are concerned about their long-term sustainability, theirethical standards, the accountability of their management to their

shareholders and the proper role of business in society, will have no difficultyin seeing the beguiling words of the president for what they really are.


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They will throw their weight behind serious efforts to deal with corruptionconclusively in SA.

Thirty-three leading business figures have already done so; it is to be hopedthat their lead will be followed.

17 January 2013Business DayPage 1Karl Gernetzky

Exodus to private schools shows no end

ATTENDANCE at private schools has grown 87% between 2000 and 2011and this trend is set to continue, according to the South African Institute of

Race Relations latest survey on South Africa.

While the proportion of pupils in private schools remains at 4% of childrenenrolled in the education system, the figures show that parents are losing faithin public schools, where enrolment grew 1.3% over the same period.

According to the survey, from 2000 to 2011 the number of private schoolsgrew from 971 to 1,486 a 53% increase, while the number of public schoolsdropped 9%, from 26,789 to 24,365.

Growth in private schooling was highest in the Eastern Cape and Limpopo both "plagued by long-term and persistent administrative difficulties", theinstitutes researcher, Jonathan Snyman, said on Wednesday.

Over the past 11 years the number of independent schools rose 326% in theEastern Cape and 137% in Limpopo.

Eastern Cape education spokesman Loyiso Pulumani said on Wednesday theprovince had administrative difficulties, but it would be an "oversimplification"to attribute private school growth to a loss of faith in public schools. Theprovinces population was declining due to migration, but the department was

struggling to keep pace with an increased demand for school infrastructure intowns such as Butterworth and Umtata, he said.

Mr Pulumani said while there were "some very good" private schools in theEastern Cape, data showed there was often little difference in pupilperformance.

Independent Schools Association of Southern Africa executive director JaneHofmeyr said on Wednesday while the "clear crisis" in basic education droveprivate school growth, there was also high demand for faith-based education.Schools offering values-based education regardless of the pupils faith are

very popular and could represent up to half the sector.


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She said the continued growth of private education could have "severeimplications" for provincial finances, as departments had to pay subsidies tolow-fee private schools that qualified for state support amounting to 15%-60%of the cost of a public school pupil.

17 January 2013Business DayPage 1Setumo Stone

Steep increase in service protests

THERE was a sharp spike in unpredictable and increasingly violent servicedelivery protests last year, with the Western Cape accounting for nearly aquarter of the incidents recorded by municipal data monitoring company

Municipal IQ.

There are fears that these protests are becoming institutionalised as alegitimate form of action to express community grievances.

Municipal IQ said in a statement on Wednesday that service delivery protestslast year accounted for 30% of community uprisings recorded since 2004.

In the second and third quarters of last year there were more protests thanduring any other quarter since 2004.

Most protests were sporadic and there were no properly legal applicationprocesses for them, which would have required the registration of the namesof the organisers, Municipal IQ MD Kevin Allan said on Wednesday.

While this anonymity had given rise to suspicion that there was politicalinstigation behind some of the protests, Mr Allan said there was"categorically" no "third force" in South Africa behind public demonstrations.

Instead, service delivery protests were becoming more institutionalised as a"legitimate call for action and a response to the genuine grievances of

communities", he said.

Democratic Alliance leader and Western Cape Premier Helen Zille said onWednesday the protests in her province had not been about service delivery.

"The common denominator of all of these protests has been the prominentrole of African National Congress local leaders and councillors," she said.

Citing an example of traffic lights that had been destroyed in a protest, MsZille said: "It is hard to explain why people destroy services in the name ofservice delivery protests."


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She said the protests were part of the ANCs plan to take back the WesternCape in the 2014 national elections.

"That does not mean to say that people do not have genuine grievances," MsZille said.

Electoral Institute for Sustainability of Democracy in Africa analyst EbrahimFakir said on Wednesday that the protests could either be sparked by genuineservice delivery issues, a lack of government accountability or politicalagendas within and between political parties.

Municipal IQs research found that the Eastern Cape had the second-highestrate of protests last year, especially in Nelson Mandela Bay metro.

Gauteng, which like the Western Cape had a major challenge in providingservices to large numbers of migrants from other provinces in search of

economic opportunity, had seen a surge of protests in informal settlements.

But Mr Allan said Gauteng had dropped to third place in terms of servicedelivery protests. One reason was a clampdown by police, who were growingloath to give permission for community protests.

The ANC in Gauteng attributed the decline to the work of its new performancemonitoring and evaluation unit, led by Kgosi Maepa.

Mr Maepa said recently that the unit was able to identify hot spots for protestsby gathering information from ANC members and councillors.

This helped it to take active steps to address the problems of the affectedcommunities and quell their appetite for taking to the streets.

Municipal IQs Karen Heese on Wednesday agreed that the unit had played arole, saying Gauteng had created platforms to "channel objections beforepeople go to protest".

Mr Fakir said last years protests were sometimes a "flash in the pan" anduncoordinated.

In many instances, there was no sense of "organisation in hierarchical terms",as people took to the streets to vent their anger against the authorities, MrFakir said.

17 January 2013Business DayPage 2Allan Seccombe

New mining law changes could deter investors


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THE Draft Mineral and Petroleum Resources Development Amendment Billwould further damage investor confidence in the mining industry as it did notprovide much certainty, experts warned on Wednesday.

The bill, which the Cabinet approved on December 7, is intended to remove

ambiguities in the Mineral and Petroleum Resources Development Act of2002. It further aims to streamline administrative processes and to improvethe regulatory system.

The Department of Mineral Resources has given interested parties untilFebruary 8 to comment on the bill.

"The substance of the bill unfortunately belies the objects stated by theminister," Webber Wentzels head of Africa mining and energy projects, PeterLeon, said on Wednesday.

He listed several problem areas in the bill, ranging from the treatment of minedumps to a high degree of ministerial discretion in controlling beneficiation.

Mr Leon urged players in the mining industry to highlight its shortcomings toensure it achieved its "laudable" objectives. "The bill in its current form leavesmuch uncertainty," he said.

"This will exacerbate rather than improve the difficulties that exist with thecurrent mineral regulatory regime and may further damage investorconfidence in the mining industry ."

The bill proposes the removal of an exemption for listed mining companiesthat hold mineral rights to trade shares without ministerial consent. This couldbring trade in JSE-listed mining shares to a halt.

"The amendment seems to do away with that exemption so that any interestin a listed company cannot be disposed of without ministerial consent," BellDewar director Matthew van der Want said. It would have been better if theact had been left unchanged, he said. " Most of the amendments areunnecessary and they dont really add anything.

"In certain respects they create more of a hindrance than anything else," Mrvan der Want said.

"All the legal minds for the last 10 years have been trying to sort out exactlywhat the act means. I think were pretty much there understanding whatspermissible and whats not and how the whole system works," he said.

Mr Leon said the amendments gave "broad discretionary powers" to themineral resources minister to encourage beneficiation a key governmentpolicy to boost job creation and generate wealth. If the bill became law, theminister, with sole discretion, would set the levels required for beneficiation.


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The minister would further determine the percentage per commodity, the pricerequired for beneficiation, and the percentage of raw mineral production to beoffered to local beneficiators.

"The bill also requires any person who intends to export designated minerals

a term that it fails to define to obtain the ministers written consent priorto doing so," Mr Leon said.

It further gave the state the right to a "free carry interest" in new explorationand production rights in the petroleum industry, which meant that thegovernment would not have to contribute towards capital expenditure.

The bill proposes that the minerals in tailing dumps are owned by the stateand companies would need to apply to mine them. "This amendment mayconstitute an unconstitutional expropriation of historic tailings ," Mr Leon said.

Chamber of Mines spokesman Vusi Mabena said there were "areas ofconcern" in the amendments. The chamber was gathering input frommembers before responding to the department.

17 January 2013The TimesPage 8Graeme Hosken

DA questions cost of troop deployment

President Jacob Zuma has come under fire for his decision to send soldiers,including paratroops, to the Central African Republic.

He was accused by the DA of disguising the deployment as a disarmamentand demobilisation mission.

DA MP David Maynier has called on the parliamentary standing committee ondefence to convene a special hearing. The committee, says Maynier, mustlook into the cost of the deployment, which began on January 2.

"Zuma claims it is R65-million but if you look at the cost it is potentially overR1-billion ... nearly 2% of the defence force's budget."

Zuma authorised the deployment of 400 special forces soldiers andparatroops to assist the CAR government in developing its defence force andwith the planning and implementation of the disarmament, demobilisation andreintegration processes.

Maynier said serious questions needed to be asked.


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"The deployment is so murky that it creates the impression that the defenceforce was deployed to prop up President Francois Bozize's government [andnot to] bring about peace.

"Questions need to be asked about why these specialised troops were

earmarked for the disarmament process when there is currently no ceasefire,never mind a disarmament process.

"How does one disarm when a civil war is still being waged?"

Maynier said disarmament agreements were usually overseen by engineersand senior staff officers.

Attempts to reach presidential spokesman Mac Maharaj were unsuccessful.

Maynier called on Minister of Defence Nosiviwe Mapisa-Nqakula to appear at

the special hearing to explain the president's decision. He said it appearedthat Zuma might have misled parliament.

"We need to know why we are sinking millions into deploying the defenceforce to the CAR when we have insufficient funds to deploy it to safeguard ourborders."

Defence ministry spokes-man Sonwaba Mbananga said the ministry wouldnot enter a debate about the merits of the deployment.

''The minister recognises parliament's constitutional oversight role. Maynierknows the proper channels to follow ... it is only the committee's chair whocan call such a special meeting.''

Defence analyst Helmoed Heitman said that though questions about thedeployment's cost needed to be answered, the move itself wasunderstandable.

"I strongly believe the intention was to 'force' both the rebels and Bozize intonegotiations.

"If we wanted to prop up Bozize, a larger force would have been deployed. Ifwe had not sent in a force, the entire region would have been plunged intoturmoil, with rebels, smugglers and terror groups ruling the region and ourSADC neighbours - such as the Democratic Republic of Congo, whichborders CAR - returning to total anarchy. It is not something that we couldhave risked," he said.

Rebel forces threaten to overrun the capital, Bangui.

Two years ago, the SANDF was involved in upgrading CAR army bases,providing equipment and training,


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17 January 2013The TimesPage 6Nashira Davids

Schools still in turmoil

Three of the 17 schools in Western Cape fighting for survival were off to arocky start to the school year yesterday.

Education MEC Donald Grant had wanted to close the schools on thegrounds of insufficient numbers of pupils, and for other reasons. But theschools obtained a court interdict last month that barred Grant from closingthem.

Bracken Hill EK Primary School, near Knysna, Warmbad-Spa Primary School,

in Calitzdorp, and Beauvallon Secondary School, on the Cape Flats, allreported problems yesterday.

At Bracken Hill, the principal announced his resignation on Monday. Schoolgoverning body chairman Sharon Filander said the move was traumatic forher daughters, aged 10 and 11.

"This morning I met the woman acting in his position for the first time. All thedepartment has done is sow confusion here," said Filander.

There are 60 children at the school. Last year, it had two teachers - one ofwhom was the principal.

Grant argued that the school should be closed and the pupils taught at aschool 9km away.

"But there are not enough buses to transport the children. Parents don't wantthem to use the bus. The Rheenendal accident scared them too much," saidFilander, referring to a 2011 accident in which 14 children and their bus driverwere killed when the bus plunged into a river.

Kitty Jacobs, a member of the governing body of Warmbad-Spa PrimarySchool, said yesterday that only the principal had arrived at school. The solepermanent teacher announced on Sunday that she had resigned.

Beauvallon Secondary School was vandalised and its electricity supply cut.

Bronagh Casey, spokesman for Grant, said the department of educationwould repair the Warmbad school and a new teacher would begin work theretoday.

She said the interdict was subject to a court review.


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"The court order is a loss of opportunity for the children of this province. Wewill continue to fight for their rights to better educational opportunities."

Magnus de Jong, spokesman for the Save Our Schools campaign, said: "Thedepartment cannot use dwindling numbers and poor performance as reasons

to close the schools."

17 January 2013The TimesPage 4Philani Nombembe

Confusion reigns over end to Cape farm strike

Confusion about the ending of the violent Western Cape farmworkers strikereigned yesterday as Cosatu and AgriSA sent out contradictory messages.

The trade union federation announced that it had made a breakthrough inwage negotiations in Clanwilliam - one of the farming towns affected - andthat workers would return to work.

Tony Ehrenreich, Cosatu's provincial general secretary, said "good farmers"had offered to pay their workers R105 a day, which he claimed workers hadaccepted.

He said Labour Minister Mildred Oliphant would then consider regularisingR105 a day a "sectoral determination" for the area.

"We have a sufficient number to allow the government to set the sectoraldetermination.

"We will pursue these agreements across the country . We might not push itnow because we have limited bargaining power - but we will be back atharvesting time."

Ehrenreich said protests would continue in De Doorns and other towns.

But AgriSA dismissed Cosatu's claims.

It said: "An offer made by a single farmer, who is apparently highly dependenton the services of a large number of temporary workers during peak harvesttime, was welcomed by Cosatu and portrayed by them as a collective dealwith Clanwilliam farmers, which could serve as a trendsetter for widerapplication."

It said its members would continue to take part in the review of the statutory

minimum wage for the sector, to be concluded soon .


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Farmworkers went on strike in November to demand a wage of R150 a day.The strike resumed last week after wage talks failed.

Western Cape agriculture and rural development MEC Gerrit van Rensbergsaid yesterday that the provincial government was concerned about "the high

level of intimidation of farmworkers who don't want to partake" in the strike,and the destruction of property.

"It is unacceptable that protesters are destroying the very means ofemployment opportunities they are supposedly protesting for," said VanRensberg.

"The destruction of a packing shed in Sandrivier Estate, outside Wellington,last night has destroyed the jobs of more than 500 workers."

17 January 2013The TimesPage 1Graeme Hosken

Load-shedding fears rise

Construction of the Medupi power station, in Limpopo, has ground to a haltbecause of violent protests by hundreds of workers.

The shutdown, which has sparked renewed fears of load-shedding, isbelieved to be linked to the laying-off of workers following the completion ofsome phases of the construction work.

The violence broke out when 1100 workers were locked out of the plant onSaturday after protests on Friday.

Yesterday, Eskom and contractors Hiatchi Murray & Roberts Projects, andHiatchi Kaesa, urged non-strikers to leave the site for their own safety after 25workers were injured when buses were stoned outside the plant.

The R91-billion power station was meant to come on-line by the end of nextyear, producing 4764MW of power.

In September, protesters caused millions of rands of damage to constructionequipment .

In response , Public Enterprise Minister Malusi Gigaba established a taskteam to investigate ways of avoiding strikes.

Energy Intensive User Group spokesman Shaun Nel said the latest strikecould have a huge effect on industry and power supplies.


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The group represents Eskom's largest mining and industrial customers, all ofwhom consume vast amounts of electricity.

Nel said the strike would cause huge delays in power delivery.

"We are in a severely constrained environment.

"Eskom has asked lots of our members to cut back on power usage to avoidload-shedding.

"Any further delays will exacerbate our problems."

"It is a double whammy. We do not have access to power and, on top of that,the cost of power will increase," he said.

Nel said Eskom's contractors were facing huge penalties for not delivering on

time..

He said it was urgent that industrial relations be normalised "so Eskom canreturn to powering the economy".

Eskom spokesman Hillary Joffe confirmed that construction at Medupi hadbeen halted.

"It is out of fear for the safety of workers and property.

"The latest protest stems from the 1100 workers locked out of the site at theweekend," she said.

Asked about the Energy Intensive User Group's concerns, Joffe said: "Thepower system will be tight for the next couple of years.

"We have not changed the project's commencement deadline.

"These [new] power stations are vital. We have committed to a deadline ofthis year.

"In terms of costs, these have not changed. The project remains at R91-billion," she said.

Declining to discuss penalties, Joffe said: "If there are penalties they willdepend on the nature of the contract."

Public Enterprises spokesman Mayihlome Tshwete said: "The reality isconstruction projects end and workforces decline.

"We are working with the provincial government to establish academies tohelp skill workers."


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He said that construction delays could affect the government's "deliverablesand commitments".

"We are monitoring delays and will ensure Eskom sticks to the timelines."

15 January 2013The New AgeSiyabonga Mkhwanazi

Cope squabble finally coming to a head

The Cope faction aligned to Mosioua Lekota is preparing to go to itsconference after the court has heard an application over the leadershipdispute between Lekota and Mbhazima Shilowa.

Cope acting general secretary Lyndall Shope-Mafole said yesterday theywere waiting on the outcome of their application in the South Gauteng HighCourt to decide on the leadership dispute.

Shilowa claims to be the true Cope leader while Lekota maintains that he isthe one in charge.

The matter will be heard in court on February 1.

Shope-Mafole said they maintained that Lekota was the real leader of Cope.

She said the court had stopped them last year from holding their first electiveconference in October because of the leadership dispute.

The court had ordered them not to proceed with the conference until the partyleadership issue was settled in court.

Shope-Mafole said once the court hearing started next month, they wouldstart making preparations for the conference some time this year.

She said they were ready to go to conference in October last year.

Shilowa and Lekota have been involved in a leadership squabble since theparty was formed in 2008.

The Lekota faction managed to remove Shilowa from his position as Copechief whip in Parliament after they accused him of financial mismanagement.

The two factions fought at their conference in Heartfelt, Pretoria in 2010where Shilowa was declared party leader.

However, the Lekota faction disputed this, saying the congress was flawed

and Shilowa would not be recognised as party leader.


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The two groups have been in court many times with Lekota winning a numberof cases against Shilowa.

The court hearing next month will hopefully settle the long-standing leadershipdispute on who the real leader of Cope is.

16 January 2013The New AgeSapa

Ramaphosa reviewing business interests

ANC deputy president Cyril Ramaphosa is reviewing his role in business toensure there are no conflicts of interest with his new role, he said on Tuesday.

"I want to remove any form of conflictual situation with my role as deputy

president of the ANC," Ramaphosa said in an interview on CNBC Africa'sPolitical Exchange.

He described his election to the post as "a life-changing event", but addedthat avoiding such conflicts should come naturally to anyone.

Since the African National Congress's elective conference held in Mangaunglast month, the party would make an effort to work with private enterprise.

"The ANC has consciously decided that it does want to interact with allinstitutions in the South African space, that includes business. I want them tobe proactive... business should not be bystanders."

Ramaphosa, who is chairman of the Shanduka Group among other businessinterests, denied that he represented business in the party's nationalexecutive committee.

Talking about problems facing the mining sector, Ramaphosa said whilewages and living and working conditions had improved since apartheid, moreneeded to be done to improve the lives of mineworkers.

"I'm glad to say, employers, unions and various other entities are alive tothat."

Ramaphosa reiterated that he would be willing to testify about the strike-related violence at Marikana before the Farlam Commission of Inquiry, shouldhe be called upon to do so.

He denied that an e-mail he sent prior to the deaths of 34 striking Lonminminers at Marikana on August 16, in which he suggested "concomitantaction", was a call for a violent response.

Instead, Ramaphosa said he was concerned, in the wake of 10 strike-relateddeaths the preceding week, as to how further loss of life could be avoided.


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This was informed by his previous role as general secretary of the NationalUnion of Mineworkers.

"I could never abandon the impact that workers have had on me. [I could]

never ever face a situation where I would say 'take action against theseworkers'.

"I did say I was trying to prevent further loss of life," Ramaphosa said.

16 January 2013The TimesPage 1TJ Strydom

State nails Anglo

An angry cabinet minister, shocked trade union leaders and thousands ofworkers in limbo will be able to do little to calm tensions in the platinum sector.

The government yesterday vowed to review Anglo American's entire portfolioof mining rights after what it called a "unilateral" decision by Anglo Platinum(Amplats), one of the company's major subsidiaries, to scale down itsoperations - a move that would jeopardise more than 14000 jobs.

Anglo American is the third biggest company on the JSE and has a marketcapitalisation of about R387-billion.

It employs nearly 80000 people in South Africa alone.

A clearly irritated Mineral Resources Minister Susan Shabangu yesterdayclaimed in an interview with Mineweb that there had been no discussionsbetween her department and the world's biggest platinum miner about thescaling down.

The company, she said, had acted in "bad faith" and was, in announcing therestructuring of its operations yesterday, "undermining" its relationship with

her department.

She said her office was not contacted until last week ". as if I am waiting forthem".

Anglo American, which owns more than three-quarters of Amplats, embarkedon a review of its platinum interests early last year.

Shabangu's department said it would now "subject the entire Anglo Americanportfolio of mining rights to regulatory scrutiny to ensure compliance toprescripts".


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Anglo American is one of the world's five biggest mining companies. Apartfrom platinum, it has massive interests in coal, diamonds and iron ore inSouth Africa.

Shabangu's department criticised the restructuring decision as lacking vision

and deficient in long-term business planning.

The ANC also weighed in, saying Anglo American first "exploited and thenmercilessly created conditions to eliminate" 14000 jobs.

Amplats CEO Chris Griffith said, however, that there had been structuralchanges in the platinum mining industry and his company could not continueto make losses.

He said that, though miners would be retrenched, they need not end up beingunemployed.

Griffith promised to redeploy them to other business units within the groupand retrain them to do other jobs in the community.

Training them as bricklayers was an example he gave.

Shabangu blasted the idea.

"How do you say that you will create bricklayers when thousands ofbricklayers in the country are unemployed?" she fumed.

Amplats' plan to build houses in the area was also slammed.

"They want to spend R300-million to build houses as part of their socialresponsibility in Rustenburg, when the particular 14000 employees do notcome from Rustenburg? They are coming from Eastern Cape. That is wheretheir families are. Who will live in those houses?" said Shabangu in theMineweb interview.

Anglo American appointed Mark Cutifani as its CEO last week.

The Sunday Times reported at the weekend that he was under pressure frominternational investors to reduce the company's exposure to South Africa.

Though receiving a skunk's welcome from the National Union of Mineworkers(NUM) for being a white male and not South African by birth, Cutifani iscredited with having a good relationship with the government.

This relationship is likely to be tested in the months ahead.

Tougher conditions in the world economy, a relatively low platinum price andwork stoppages caused by wildcat strikes are expected to turn Amplats' 2011

headline profit into a headline loss.


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It now wants to restructure to cut R3.8-billion a year in costs by 2015.

Yesterday, the company said it would soon start talking to trade unions interms of section 189 of the Labour Relations Act.

The restructuring involves putting the company's Union Mine up for sale andplacing four shafts at its Rustenburg operations on long-term care andmaintenance.

This would cut the company's production target by 400000oz a year and couldaffect as many as 14000 miners.

The unions are not thrilled by the company's plans. NUM said it had notedAmplats' decision "with serious concern and shock".

It is not known whether NUM is still the trade union with the most members at

the company because the Association of Mineworkers and ConstructionUnion (Amcu) has been recruiting furiously in the Rustenburg area.

Griffith said union membership was "in a state of flux" and that the companywould have to verify union membership claims, a process that should take"about a month".

Amcu announced that it would convene a media briefing in Sandton later thisweek.

NUM has called on workers "to unite in order to defeat the evil nature ofcapitalism, which seeks to put profits first and humanity last".

Minority trade union the United Association of SA (Uasa) slammed Amplats,calling the restructuring plan "flawed and not in accordance with labourlegislation".

"The jobs and income of 5000 Uasa members are at risk," said spokesmanAndr Venter.

Griffith insisted that the miners would not be out on the streets.

Anglo American's share price dipped by nearly 4% yesterday but the platinumprice spiked.

The possibility of a lower supply of the precious metal pushed its price up to athree-month high and past the gold price for the first time in nine months.

The rand fell to its lowest in six weeks, trading at around R8.81 to the dollarlate yesterday.

16 January 2013


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Business DayPage 3Nick Kotch

Durban may see founding of Brics bank

SOUTH African officials say plans for a Brics Development Bank with startingcapital of up to $50bn are gathering pace ahead of the groups summit inDurban in two months.

"There is the political will from all the Brics countries to have this bank," SouthAfrican ambassador to Brics Anil Sooklal said in Pretoria on Tuesday.

SA is lobbying to host the bank, if it gets off the ground, emphasising thesophistication and integrity of the financial services industry here. The country

co-chaired the preparatory work with India.

Supporters of the idea of the bank have worked on the basis that each of thefive Brics countries the others are Brazil, China and Russia will commit$10bn at the outset. Its objectives will include financing projects in poor anddeveloping nations, particularly in Africa and India.

"We all found comfort with that ($50bn) figure but there is nothing officialabout it," said Dr Sooklal, a deputy director-general at the Department ofInternational Relations and Co-operation. "The leaders will decide."

South African Institute of International Affairs (SAIIA) senior research fellowPeter Draper said it was still uncertain what decision, if any, about a Bricsbank would be taken in Durban on March 26-27.

"This is quite a closely guarded secret and you have to decide what it is thatthe various states want.

"My take is that SA, China and India all see potential in the idea but fromdifferent perspectives."

Russia and Brazil were much less enthusiastic, the former because its tradeand investment focus was on the East, and the latter because it already hadaccess to vast development funds.

Dr Sooklal and department director-general Jerry Matjila have done most ofthe heavy lifting to prepare the Durban summit. About 3,000 delegates andofficials are expected to attend, as well as the presidents or prime ministers ofall five countries.

Dr Sooklal said the event budget had been about R20m, but had increasedafter a decision to involve African regional economic communities and the

African Union in the summit. SA is often accused of acting in its own interestswhile purporting to promote those of Africa as a whole.


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Apart from the development bank and African economic issues, the othersummit goals are to set up a Brics Business Council and a think-tank,harnessing the intellectual and research capacity of the members.

The theme of the summit is: Brics and Africa: Partnership for Development,

Integration and Industrialisation.

SA will chair the Brics group for 12 months after Durban, and then hand overto Brazil.

Brics controls 25% of the global gross domestic product, 30% of the worldsland and 43% of its population.

The implicit notion that SAs historic economies ties with Europe are on thewane were challenged more than once last year. The European Commissionsaid its 25 member states were jointly by far SAs largest investors and trade

partners.

16 January 2013Business DayPage 3Stephen Grootes

Headless SIU takes bite out of Zumas credibility

WHEN President Jacob Zuma ascended to the Union Buildings in 2009, itwas already clear that he was going to have to answer difficult questionsabout his commitment to fighting corruption.

His path to power, which included the decision by the National ProsecutingAuthority (NPA) not to continue with corruption charges against him despitethe conviction of the man who paid him money corruptly, meant that it wasgoing to be difficult to convince his critics of his anticorruption credentials.

However, it now appears those critics may have a huge weapon to use

against him, which they could claim is proof he is hypocritical.

And it appears that he simply has no excuse to use as a defence.

On Saturday, while he was delivering the African National Congresss (ANCs)annual January 8 statement, Mr Zuma said: "We urge our institutions tocontinue their hard work (against corruption), and not to become complacent we urge ANC members and South Africans in general to remain vigilant inthe fight against corruption."

It is a message that he has repeated many times over the past few years. It

has become traditional for Mr Zuma to mention the successes some of theseagencies have had during his state of the nation addresses. In particular, he


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refers to the investigations currently being carried out by the SpecialInvestigating Unit (SIU).

However, despite Mr Zumas request that institutions "continue their hardwork", he has left the SIU without a permanent head for over a year. It is now

13 months since he removed advocate Willie Hofmeyr from that post, andappointed former judge Willem Heath.

Judge Heath lasted only 10 days, before he fell on his sword, after giving anewspaper interview in which he claimed former president Thabo Mbeki hadbeen responsible for the corruption conviction of Mr Zumas former financialadviser Schabir Shaik.

While there have been similar instances in which institutions have been leftleaderless for long periods of time, such as the NPA, Mr Zumas officials havealways been able to point to legal reasons.

In the case of the NPA, appointments were the subject of lengthy courtproceedings. In other situations, there has been a conflict over who should dothe job.

In this case there is no such excuse. The head of the SIU is solely in thepresidents gift; only he can make this appointment.

While it is unclear exactly what effect this situation is having on the unit,Corruption Watch head David Lewis says: "all important institutions requirepermanent heads and I cant really understand why that (the delay in theappointment) should be the case. I cant help but believe it makes them lessefficient and more malleable to pressure from the top."

Considering that Corruption Watch was set up by the Congress of SouthAfrican Trade Unions, which has strongly supported Mr Zuma politically, itcannot be claimed that there is a political agenda behind Mr Lewisscomments.

There also appears, from the outside, to be no political reason why noappointment has been forthcoming. ANC figures have not revealed any

internal conflict over the position.

While there were some rumours that the partys Mangaung conference mightdecide to shut down the unit, it is not clear yet that such a decision was in facttaken.

The Presidency itself has been asked several times over the last few monthsto shed light on whether an appointment will be made, and to explain thecause of the delay.

The fact that no answer has been forthcoming could lead to ordinary citizens

questioning Mr Zumas commitment to fighting corruption.


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16 January 2013Business DayPage 2

Mariam Isa

Institute optimistic about SAs future

THE South African Institute of Race Relations is more upbeat about SouthAfrica now than at any time in the past decade, saying that the list of problemsthe country faces will drive beneficial policy change.

South Africa has become a more open society, with the governmentacknowledging its failures a development that will foster steps to improve

growth and job creation, the research body said in an outlook for 2024. Mostanalysts are more pessimistic because of the political and economicuncertainty sparked by social unrest, which has prompted downgrades inSouth Africas sovereign credit rating in the past few months.

"At no point since 1994 has the institute confronted more angst andpessimism about the future of the country than we saw in 2012," said institutedeputy CEO Frans Cronje. "It is with good reason, and based on a soundresearch methodology, that we are able to be more upbeat about the future ofSouth Africa than we were 10 years ago."

The years between 1994 and 2007 were a period when organised business,labour and the presidents office came together as a powerful nexus, creatingthe "facade" of a stable and well-managed country, Mr Cronje said. However,during most of that period, poverty, unemployment and crime all increasedwhile life expectancy shortened.

Within the economy, productive sectors such as manufacturing, mining andagriculture saw their dominance "usurped" by the relatively more highly skilledservices sector. All of these things "set South Africa on an unsustainableeconomic trajectory which could not possibly last for long", he said.

Ironically, the institute says the protest action that has swept the country in thepast few years is a result of the governments success in service delivery.This had raised expectations of future improvements, which could only be metby job creation and income growth.

"The list of problems South Africa confronts, which depresses so manypeople, has therefore become the very thing that will drive policy change inthe country," Mr Cronje said. But he admitted there were two possibleoutcomes of the governments present predicament.

One scenario would involve "an obstinate government" pressing ahead withfailed interventionist policies despite evidence that they were doing more


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harm than good. This would involve the tightening of employment equity,empowerment and labour regulations; constraining legislation for the media,civil society and the judiciary; and the dominance of "grandiose" state-ledsocial and economic projects.

The second scenario involved reform to deregulate labour markets, waterdown employment equity and empowerment requirements, and abandonstate-led industrial and social policy.

The institute said it would give an equal probability to both scenarios, but mostanalysts believe the first is more likely.

16 January 2013Business DayPage 1

Allan Seccombe

Backlash as Amplats shuts shafts, slashes jobs

ANGLO American Platinum (Amplats) on Tuesday faced a backlash to itsplans to cut as many as 14,000 jobs by mothballing shafts, suspendingprocessing plants and flagging the sale of a mine, with the African NationalCongress (ANC) calling for the surrender of its mining licence.

The worlds largest platinum producer, which is due to report a heavy financialloss for 2012, is investing R890m over five years in job creation schemes tooffset the retrenchments it has proposed to trade unions.

The cost of the retrenchments, care and maintenance of four shafts and thejob creation plan is R3.2bn. Amplats committed to R100bn in capitalexpenditure over the next decade, a 25% drop from its earlier intentions.

It estimates it will save R3.8bn a year if it implements its cost-cutting plans.

The company said on Tuesday that it was responding to a decline in demand

growth, the rising cost of deep mining, higher than inflation cost inputs andincreasing amounts of recycled platinum on the market.

"We understand the social implications of the potential restructuring. We haveno choice but to make this company profitable," Amplats CEO Chris Griffithsaid.

"This isnt a popular message, but it is important for the country to haveprofitable businesses.

"Weve got the government and the South African Revenue Service worrying

about us not paying the kind of taxes we used to and royalties. Elements of


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the government are asking us what were doing and when well be profitableagain," he said.

Amplats warned in February last year that it was conducting a thoroughreview of its business and would not shy away from making tough decisions to

restore it to financial health.

Mr Griffith said the company had "engaged" with the Department of MineralResources about its plans.

But Mineral Resources Minister Susan Shabangu accused Amplats of failingto consult her department about its cost cutting, which would have enormoussocial ramifications.

"We regard this as unilateral, but also a company that disrespected theregulator in the way that they have made their own decision," she said at a

press briefing on Tuesday.

"They have come up with their own plan, finalised the plan and told us of theirdecision. Their current decision has major implications for our country."

Ms Shabangu said Amplats mining rights would come under "close scrutiny"to ensure that the companys operations complied with regulations.

The ANC condemned Amplats plan to cut thousands of jobs in Rustenburg,an area where unemployment is already high.

"This decision is cynical and dangerous in the extreme," ANC spokesmanJackson Mthembu said. "This decision is part of a strategy to divest itsbusiness from South Africa and relegate the mines in South Africa to dogs.We call on the minister of minerals and energy to call an urgent meeting of theindustry with a view to considering the idea that companies who want tomothball shafts surrender their licences in respect of those shafts so that theycan be put on a public auction for new owners who are still hungry to mine toput them to good use."

Amplats had no choice but to restructure its business, Rezco Asset

Management director Rob Spanjaard said.

"Amplats is completely marginal at the moment. You cant run a business onthat basis. This wasnt a kneejerk reaction of theirs," he said.

Amplats is restructuring its Rustenburg operations into three mines, with anannual output of between 320,000oz and 350,000oz, and it is putting fourhigh-cost shafts into long-term care and maintenance. They will reopen whenmarket conditions become favourable again.

It will also restructure its Union operation while it seeks a buyer for the mine.


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The restructuring will cut output by 400,000oz a year, leaving Amplats withannual production of between 2.1-million and 2.3-million ounces, compared toits target of 3-million ounces.

The restructuring was not a "reprisal" for the illegal strike last year that

stripped 306,000oz from platinum production and pushed Amplats into anestimated R1.5bn headline loss compared to a profit the previous year, MrGriffith said.

The strike was in October and November, by which time the review had beenconducted and most of the decisions flowing from it had been reached.

Amplats said it would consult unions on retrenchment plans.

Analysts said there could be a backlash of strikes to protest against theretrenchments and shaft closures, fuelling an already unsettled labour

environment.

The National Union of Mineworkers said it was "seriously concerned andshocked" by the decision, but would talk to Amplats in an effort to save jobs.Uasa, a trade union representing 5,000 affected workers, said it would "fighttooth and nail to defend its members rights".

The Association of Mineworkers and Construction Union, which hasthousands of members at Rustenburg mines, was not available for comment.

Nomura emerging markets economist Peter Attard Montalto said Amplatsrestructuring plans were part of a larger reassessment of the competitivenessof the platinum sector by domestic and foreign mining interests in SouthAfrica.

"While clearly companies wont simply leave, the sort of scaling back talkedabout by Amplats and being considered by others like Harmony Gold, is justas damaging, in our view," he said.

Amplats releases annual results on February 4. Its shares closed 0.8% downat R487 on Tuesday while the platinum index was up 1.3%. Aquarius

Platinum rose 8.7%.

15 January 2013The New AgeSapa

Malema lays charges against friend

Expelled ANC Youth League leader Julius Malema has laid charges againsthis ex-friend, Boy Mamabolo, Limpopo police said on Tuesday.

"Julius opened a case of crimen injuria on Sunday at 7.26pm at the


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Polokwane police station," Brigadier Hangwani Mulaudzi said.

Mulaudzi said police were investigating the case and were not taking the caselightly.

"Threats, we do not take them very lightly, because if someone threatens youit means they have intentions... but we also have to weigh that threat," hesaid.

On Tuesday, The Star reported that Mamabolo allegedly threatened toexhume the remains of Malema's mother -- Mahlodi Malema -- from her graveand throw them in front of his grandmother's house in Seshego.

This was apparently in retaliation for Malema allegedly sending his allies tosleep with Mamabolo's girlfriend.

The newspaper reported that Mamabolo sent Malema an sms.

"This time I want to show you that I am more brutal and exhume Mahlodi fromthe grave and lay her in front of (your grandmother's house). You have donemany bad things to me," Mamabolo's text message according to the report.

He claimed Malema instructed Limpopo ANC Youth League secretary JacobLebogo and his ally Jossie Buthane, to sleep with his girlfriend.

"In fact, one of them will die this year. I have never said anything which I didn'tdo."

Mamabolo reportedly admitted on Monday that he had sent an insultingmessage to Malema, but claimed he had been provoked.

Crimen injuria charges relate to the impairing of a person's dignity.Sapa

14 January 2013The New AgeSiyabonga Mkhwanazi

Mazibuko wants JZ to explain irresponsible statement

DA Parliamentary leader Lindiwe Mazibuko has called on President JacobZuma to retract or explain a statement he made that businesspeople whosupported the ANC would prosper.

Mazibuko said yesterday it was irresponsible for Zuma to suggest that onlybusinesses that support the ANC have the chance of multiplying theirfortunes.

She said this suggested that if businesses support the ruling party, they stood

a better chance of getting financial rewards from state resources.


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She said with so much corruption in the government, it was not acceptablethat the president would seek to support those businesses backing his party.

She said she would send questions to Zuma to clarify his comments made atthe ANCs gala dinner on Friday in Durban or retract the statement.

Zuma was speaking during the dinner to mark the partys 101st anniversaryahead of a rally at Kings Park stadium.

The event where Zuma spoke, was attended by prominent businesspeople inthe country including mining magnate Patrice Motsepe, Vivian Reddy, ITbillionaire Robert Gumede and others, where they booked tables worthbetween R50000 and R600000.

The ANC was said to have raised millions at the gala event.

Mazibuko said the comments by Zuma sought to promote certain businessesat the expense of others.

She said the government should not be seen to be associating itself with onegroup of businesses and neglecting others.

She said Zuma conflates the role of the state and the party.

The state needs to fight corruption wherever it rears its ugly head, saidMazibuko.

The construction of Zumas home in Nkandla was one example of how thegovernment was misusing public funds at the expense of the poor andvulnerable, she said.

She said the president needed to promote good governance.

She also accused Zuma of promoting business interests by saying, inParliament in May last year, that it was okay for politicians to do business withthe state.

15 January 2013Business DayPage 4Linda Ensor

Eskom hikes unite business, labour

BUSINESS, trade unions and civil society organisations will be speaking witha united voice of opposition to Eskoms proposed electricity tariff hike whenthe National Electricity Regulator of SA (Nersa) holds public hearings in theMother City on Tuesday.


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Day-long hearings are planned in all nine provinces over the next two weeksso Nersa can consult society on Eskoms application for annual hikes of 16%over the next three years to fund its capital expansion programme. There hasalready been a groundswell of opposition by business and labour on thegrounds that it will reduce the competitiveness of the economy and add to the

cost of living, respectively.

A consortium of civil society organisations, mainly those concerned with theenvironment plan and sustainable energy plan, will protest outside the hearingat the Cape Town International Convention Centre Tuesday. The group willdemand that alternative plans based on renewable energy and energyefficiency be considered before Nersa approves Eskoms tariff hikeapplication which they say will hurt the poor and working class.

The National Union of Mineworkers will be making a submission Tuesday, aswill the Cape Town Chamber of Commerce, which will argue that the

proposed increases are "unaffordable and will have a devastating effect onthe economy and small business in particular".

The chambers executive director, Viola Manuel, and chairman of its industrialfocus group, Peter Haylett, will express grave concerns about themanagement of Eskom which neglected maintenance in the good years toimprove the bottom line and was now having to play catch-up. They will arguefor greater efficiency in the use of electricity and even propose that domesticconsumers be rationed if this is necessary.

"We have been shocked by evidence of the mismanagement of coal suppliesand how this has lead to higher coal costs. There is also ample evidence ofextravagance and wastage while the average Eskom salary is now aboutR500,000 a year," the chamber will say.

"There has been an exodus of skills and Eskom now has to import techniciansto perform highly skilled procedures.

"Further evidence of poor management can be seen in the escalating costs ofthe new power stations which Eskom is building and which are now wellbehind schedule and over budget," it will say.

The chamber will accuse Eskom of failing to introduce measures to curb peakdemand while lowering generation costs for peaking power and municipalitiesof relying too heavily on the sale of electricity as a source of revenue.

It will urge that greater use be made of the "cheaper and cleaner" natural gas,vast reserves of which had been found off the Mozambican and Namibiancoastline.

15 January 2013

Business DayPage 3


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Setumo Stone

ANC leadership has work cut out for 2014 elections

AFTER two weeks of celebrations in KwaZulu- Natal, the Mangaung

honeymoon is likely to be short-lived for the newly elected African NationalCongress (ANC) leadership as serious challenges plague the party in anumber of provinces, threatening its organisational stability ahead of thegeneral elections next year.

The ANC started the new year with amplified talk of unity within its ranks,signalling an admission that the party emerged fractured out of Mangaung,with senior leaders that had previously played a key role in the party left out inthe cold.

The cracks seemed well concealed in KwaZulu-Natal, with the ANC

demonstrating its organisational muscle with an eye on next years poll through a series of lectures, minirallies, blitz campaigns and the January 8statement weekend rally at Kings Park stadium.

However, the new leadership has inherited an organisation that is neardysfunctional in several parts of the country. A key test for the new groupwould be in how it manages the process to elect a new leadership in the FreeState, expected to be convened in less than three months.

global south african news wrap 18 january 2013

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