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SA sets up infrastructure to verify local-content claims


Engineering News

July 5, 2013

A new technical instrument has been introduced to support South Africa’s strategy of increasing the level of local content in the goods and services procured by government and State-owned entities and to add impetus to the country’s re-industrialisation efforts.

The tool in question is a South African Technical Specification (SATS) 1286, which will be administered by a new Local Content Verification Office housed within the South African Bureau of Standards (SABS).

Trade and Industry Minister Dr Rob Davies, who presided over the official launch on Friday, says SATS 1286 sets objective criteria for the issuance of an audited ‘Local Content Certificate’.

The verification process follows on from the initial ‘designation’ of products and services that are required to incorporate minimum thresholds of local content before they can be procured by national and provincial State departments, municipalities and State-owned companies. The requirement is supported by updated Preferential Procurement Policy Framework Act (PPPFA) regulations, issued in December 2011.

The current thresholds range from 100% for textile, clothing and footwear procured for government-issued uniforms to 30% for digital television set-top boxes. But Davies stressed that these thresholds should be regarded as a “floor rather than a ceiling”.

The initial designations announced by the Department of Trade and Industry (DTI) cover rail rolling stock, electrical pylons, textile, clothing and footwear, canned or processed vegetables, some oral solid-dose pharmaceutical products, digital television set-top boxes, furniture, solar geysers and power and telecommunications cables.

But further rounds of designations will be introduced in future, following research and consultations.

SABS CEO Boni Mehlomakulu says the infrastructure is in place for the organisation to conduct the verification process, which will be required only for entities that win government tenders.

The process involves a self-assessment by the company that is delivered to the SABS in the form of a local content-declaration. A team of auditors then conducts an analysis of the documentation to verify the declaration, which is followed but a factory visit by a separate team of auditors. A consolidated document is then sent through to an approval board, which makes a final recommendation to the CEO, who issues the verification certificate. The costs of the process will be born by the winning bidder.

Mehlomakulu believes that multi-step process, which involves separate teams of auditors, has materially reduced the potential for fraud and corruption, but stresses that the SABS also operates an ethics hotline should an individual have concerns. The objective criteria employed also reduce scope for discretion, which tends to contaminate the administration of regulations.

Davies argues that there is significant potential to increase the domestic job creation around government procurement generally and also the multibillion-rand public infrastructure programme. However, without mechanisms to verify local-content claims the impact of ‘buy local’ initiatives could be diluted.

“We now have a standard and the infrastructure in place to verify,” he says, adding that breaches could lead to penalties and even the cancellation of contracts.

 

South Africa: Government releases its Mid Term Review


7th Space

Compiled by the Government Communication and Information System
Jun 1, 2012

Pretoria – Government has officially released its Mid Term Review Report, which provides progress on the implementation of the commitments it has made.

November 2011 marked the mid-point of the 2009-2014 electoral term of the current administration and in line with that, the Department of Performance Monitoring and Evaluation carried out a Mid Term Review of government.

The report was released by Minister in the Presidency Collins Chabane, in Pretoria, on Friday.

The review focuses on government’s progress against the delivery agreements for the 12 outcomes. The outcomes are focused on national priorities such as education, health, crime and corruption, jobs and rural development.

The Department for Performance Monitoring and Evaluation has been monitoring progress on the implementation of the delivery agreements for the outcomes and reporting quarterly to Cabinet and the President.

Speaking about government’s priority of creating jobs, Chabane said although sufficient jobs were not created to meet the demand, government has made significant advances in the coordination of growth strategies, the New Growth Path and Stakeholder agreements.

“We have made progress with labour absorbing industrial development strategies in manufacturing, mineral products, procurement reform and the Jobs Fund. We have also made progress with improving competitiveness and reducing costs in minerals beneficiation, automotives and clothing.”

According to the report, significant procurement reforms to promote employment were achieved in 2011 with South Africa recording possibly up to 350 000 jobs in the course of the year.
However, the report notes, employment levels were still below those of 2008, before the recession with the current employment ration still well below the modest target of 45% by 2014.

The report notes that the Jobs Fund, announced by President Jacob Zuma last year, had committed only R425 million of its R2 billion budget for 2011/12.

The task of coordinating job creation initiatives across departments has proven to be challenging, resulting in slow implementation of decisions, especially where complex coordination is involved.

The report cites the problem of youth unemployment as among serious challenges facing the country.

“Government is taking a multi-pronged approach to youth employment. In addition to plans to stimulate higher growth that supports more entry-level employment opportunities, the strategy includes improved and affordable education, especially for young people from poor households; expansion in further and higher education and training; improved health care, with targeted programmes on teen pregnancy; early childhood development; and HIV and AIDS and career guidance and counselling,” reads the report.

It said a youth employment incentive, which is currently under discussion at the National Economic Development and Labour Council, had been proposed.

The National Youth Development Agency (NYDA) was in the process of finalising the National Youth Development Plan and the Integrated Youth Development Strategy for Cabinet, which focus on employment creation and economic participation by the youth. NYDA is said to have helped create 18 048 jobs in 2010/11.

During his State of the Nation Address earlier this year, President Zuma announced that the Industrial Development Cooperation (IDC) had by February this year approved R1.5 billion for 60 companies to promote job creation. This was part of the R10 billion set aside by the IDC for job creation.

With regard to increasing competitiveness, the report points to definite progress in the implementation of the Industrial Policy Action Plan (IPAP), and jobs drivers in some sectors, including minerals beneficiation, autos and clothing.

It highlights key developments in green growth through the implementation of a solar water heater programme and through commitments on renewable energy in the independent power producer (IPP) process.

Over 8 500 solar geysers were installed across South Africa during the two-week UN climate summit held in Durban with government targeting one million homes by 2014.

Reported by: South African Government News Service.

Ten foreign firms bid to supply Zambia oil


March 30, 2012

* Current supplier Glencore among bidders

* 12 for separate diesel, petrol supply tender

(Reuters) – Ten foreign companies, including Glencore Energy UK Ltd, have tendered to supply oil to Zambia for a period of two years starting this year, the public procurement agency said on Friday.

The oil should be configured to Zambia’s 24,000 barrels-per-day Indeni refinery, which does not process pure crude oil.

Zambia in February invited tenders for the supply of 1.4 million tonnes of oil after the expiry of a contract with Glencore under a two-year arrangement from March 2010.

Hazel Zulu, the Zambia Public Procurement Agency spokeswoman said Mercury Energy Trading (SA), Agipol Africa Limited, Gunvor (SA) and Crown Hill Investments Limited had also put in bids.

Others are KenolKobil Limited, Trafigura PTE Limited, Vitol SA, Independent Petroleum Group Company of Kuwait and Addax Energy SA, she said…Read more.

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