p f sars spells out ncap roll-out...
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FREIGHT & TRADING WEEKLY
For import / export decision-makers FRIDAY 28 July 2017 NO. 2256
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As it embarks on a nationwide series of roadshows to outline latest developments in the implementation of the New Customs Act Programme (NCAP), the SA Revenue Service (Sars) has committed to ongoing stakeholder engagement every step along the journey.
Sars announced last week that, after extensive high-level discussions on how best to implement the new Customs Acts
gazetted in July 2014, it had reconsidered its initial approach of introducing Registration, Licensing and Accreditation (RLA) as a first step and would instead be focusing on Reporting of Conveyancing and Goods (RCG). This builds on the platform created by the new Manifest Processing System (MPR) which was introduced in June last year.
The operational impact of the legislation is huge. For the Acts to be implemented the Rules to the Acts need to be in place. The commentary,
engagement and drafting process for the Customs Control Act Rules concluded in March this year – and while development has progressed, the finalised Rules now enable Sars to complete its technical and process designs and engage with trade in that regard.
“Delivering the legislation to the operating environment without total disruption and with full understanding of the trade impact is critical,” Beyers Theron, Executive – Customs & Excise Centre of Excellence,
told FTW. “Those are the practicalities that need to be ironed out in consultation with stakeholders before implementation – and that’s part of the reason for the current roadshows.
“We want to stop the mixed messages within the trade environment. Although we have progressed well with the development of core components required for NCAP, the 2016 version rules considered a significant amount of trade inputs and comments resulting in changes to the anticipated
business processes and systems functionality – so there’s a lot of adjustment that has to take place.
“The implementation of the new Acts is an enormous undertaking – and we won’t do anything without appropriate consultation with trade. Every design we have we will sit down and engage with our stakeholders. The current roadshows are the introductory phase – and implementation will come at a pace that is absorbable by trade and by us and we
Sars spells out NCAP roll-out plans
Last Friday saw the official launch of a new trucking association that has officially put itself forward as the representative of the “little guy” in the road freight transport industry.
“The Truckers’ Association of South Africa (Tasa) is fighting to be the voice of the sector, particularly for the previously disadvantaged truckers who are emerging in this sector,” Tasa convener Mary Phadi told guests at
the launch in Johannesburg.“Our aim is to streamline
the value chain to benefit all members of Tasa,” she said, noting that this would be achieved through Tasa’s partnership with wholly black-owned mutual bank VBS, which she said would reduce red tape and improve access to finance for young, black and female transporters.
Members of Tasa would be encouraged to bank with
VBS, said Phadi, pointing out that the new association would provide assistance to its members by only making use of black-owned businesses along the entire transport value chain. This includes panel beaters, banks as well as companies in the insurance, bookkeeping, tracking and towing fields, among others.
Coal Transport Forum representative, Steve
New trucking association to fight for the ‘little guy’
Mary Phadi, Truckers’ Association of South Africa convener.Photo: Nicole Jacobs
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To page 12
2 | FRIDAY July 28 2017
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transparency you can see
Distributors/Ignition Coils TariffThe International Trade Administration Commission of South Africa (Itac) on 21 July announced the proposed reduction in the “general” rate of customs duty on distributors and ignition coils classifiable under tariff subheading 8511.30.30, identifiable for use solely or principally with motor vehicle engines, from 15% ad valorem to free of duty. Comment is due by 18 August.
Draft 2017 Taxation LawsNational Treasury and the South African Revenue Service (Sars) on 19 July announced the release of the (i) 2017 Draft Taxation Laws Amendment Bill; (ii) 2017 Draft Explanatory Memorandum on the 2017 Draft Taxation Laws Amendment Bill; (iii) 2017 Draft Tax Administration Laws Amendment Bill; and (iv) 2017 Draft Memorandum on the objects of 2017 Draft Tax Administration Laws
Amendment Bill on which comment is due by 18 August.
Special Storage WarehouseOn 20 July Sars announced draft Rule 19A3.01 to the Customs and Excise Act, 1964 for the storage of fermented ethyl alcohol in a licensed special storage warehouse on which comment was due by 26 July.
The amendments relate to (i) the insertion of rebate items 621.23, 621.25, 621.27, 621.29,621.33, 621.35 and 621.37 to provide for the movement of alcohol derived from the process of extraction; (ii) the insertion of rebate items 620.18 and 620.20 to provide for the production of fermented ethyl alcohol by-product and the substitution of rebate items 620.19 and 620.21 to include the manufacture of non-alcoholic beverages by a process of extraction; and (iii) the substitution of rebate item 619.07 to include the manufacture of non-alcoholic beverages by a process of
extraction and the insertion of rebate item 619.09 to provide for the production of fermented ethyl alcohol by-product.
Anti-dumping Duty CorrectionSars on 21 July announced the retrospective correction, from 17 June 2016, of the rate of anti-dumping duty on imports from Germany from 96% ad valorem to 93% ad valorem for item 215.02/7312.10.90/04.08 “Ropes and cables, of iron or steel, not electrically insulated, of a diameter exceeding 32 mm (excluding that of wire of stainless steel, that of wire plated, coated or clad with copper and that identifiable as conveyor belt cord), (excluding that imported from Bridon International Limited GmbH and Pfeifer Drako)”.
OECD Economic Survey of South AfricaOn 20 July National Treasury announced that the Organisation for Economic Co-operation and Development (OECD)
secretary-general was due to visit South Africa to launch its Economic Survey of South Africa.
Negotiations on Fisheries SubsidiesThe World Trade Organisation (WTO) members on 18 July agreed to move to the next phase of negotiations on fisheries subsidies so as to agree to a decision at the December 2017 ministerial conference.
Duty Calls Watch ListComment on the draft deferment rules to the Customs Duty Act, 2014, Part 2 of Chapter 3, is due by 31 July, and on the draft Special Economic Zones (SEZ) Governance and Management Regulations, in terms of the SEZ Act, 2014 by 13 August.
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Exploration drilling at most of South Africa’s on and offshore oil and gas projects has come to a near standstill thanks to the drop in the price of oil.
According to Dave van der Spuy, manager of the Petroleum Agency SA, several low key work programmes are continuing but very little drilling is currently taking place.
“Most of the companies are concentrating on rehashing their existing data and getting the best out of it. We have seen one or two companies relinquish their exploration rights during the past two years but these have been limited to a few. We have also seen new entries and new exploration rights being awarded.”
He said much of South Africa’s oil and gas remained high risk operations and companies were responding by working together. “We have seen several multi-client survey partnerships being formed with a lot of reprocessing of existing data. Several developments have
been stalled and there is very little real activity taking place.”
South Africa saw an unprecedented level of exploration during 2013 which was ultimately interrupted by the drop in the oil price. “We currently have over 25000 square km of new 3D seismic
survey data and 50 600 square km of new 2D data available.”
According to Van der Spuy, while South Africa is not necessarily seen as a typical oil and gas country, there are enough
reserves around to make the country a prime prospect for multinationals.
“Also if one looks at our neighbours then it is easy to understand why there is a strong belief in potential finds in South Africa.”
The country is also a good base for logistics and other support services when operating in neighbouring countries such as Mozambique which still boasts some of the largest gas finds in the world over the past few years.
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A decision by shipping lines to charge no-show fees or late cancellation penalties has resulted in major improvements in cargo ‘drop-offs’ locally.
While the growing practice among ocean freight carriers to charge for what is often also referred to as deadfreight has met some resistance internationally, South African shippers and forwarders have seemingly been more accepting of the practice which has seen a 50% improvement in drop-offs in some cases.
“It’s a decision that seems to be working at this point,” Jonathan Horn, Maersk managing director southern Africa, told FTW.
He said the company had introduced the practice towards the end of March on the Far East and Middle East routes to address an issue that was becoming of increasing concern.
“We were seeing 20 to 30% no shows or late cancellations on some routes – and in some instances on particular voyages it was even higher,” he said. “The crucial thing to
understand is that this is not a fee, but a penalty. It is about behaviour change.”
French carrier CMA CGM and German Hapag-Lloyd introduced the no-show or cancellation fee recently with both companies saying the
shortfalls due to late cancellations were preventing them from accepting bookings from customers with cargo ready to go.
Horn said that a 20-30%
cancellation on a voyage severely affected a shipping line’s ability to deliver a reliable product, indicating that the practice was here to stay.
Freight forwarder Mike Walwyn said he believed as long as shipping lines were reasonable in this approach they would continue to see improved behaviour from shippers and forwarders.
“If a shipper has a good reason for missing the boat,
like a truck or a packhouse breakdown, then I would expect the line to waive the charge.”
He said it was commonly understood that shipping lines were operating on the edge and needed every cent of revenue they could get. Booking cargo with no intention of using the service ultimately played havoc with their schedules, revenue and ability to deliver a service to the rest of industry.
“Personally I would rather they got their revenue from legitimate charges like deadfreight than from a wide range of manufactured surcharges and extortionate
mark-ups of other service providers’ charges,” said Walwyn.– Liesl Venter
Lines’ no-show penalties bearing fruit
This is not a fee, but a penalty. It is about behaviour change.– Jonathan Horn“ There are enough
reserves to make SA a prime prospect for multinationals.– Dave van der Spuy
“
Gas project activity at a near standstill
FRIDAY July 28 2017 | 5
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Despite the negative effects of the heat and drought on the Eastern Cape crops this year, PE Cold Storage (PECS) has seen a “significant increase” in volumes over the previous citrus season, according to director Mark Jensen.
This is largely due to the closure of the FPT Terminal in the PE Harbour.
“Part of the value we add for our customers exporting citrus through our facility is that we consolidate pallets from producers from all over the Eastern Cape – from Fort Beaufort and the Sundays River Valley to Patensie.
“Where individual
farmers do not have sufficient stock of a particular variety for a customer, the exporters are able to consolidate volumes from different farmers to make up those orders,” he says.
Different markets also require different sizes and varietals of fruit to be packed in the same container.
Fruit that is pre-cooled and packed in the PECS facility is exported to markets such as Europe, Russia, Middle East, India, UK, Canada and
South East Asia. “Our picking and
packing systems that handle these logistics
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PE Cold Storage (PECS) is extending the working season
for its giant multi-purpose warehouse complex in the Coega logistics zone by also making it available for general cargo outside of the peak deciduous and citrus seasons.
The secure facility, which is suitable for both dry and cool cargo, will now be operating between the months of October and March, according to director Mark Jensen.
New rooms in the R100-million extensions, which have increased capacity from 7 500 pallets to 15 000, are fitted with
roof-high mobile racks which have helped improve productivity and flexibility within the warehouse.
Logistics management software and equipment, used to store and manage pallets for export, can equally
be used to provide logistics support for importers, exporters or local
producers of dry goods and cargo during the lead up to, and over the busy Christmas period.
“So, rather than businesses building capacity for those few months which then stands idle for the rest of the year, we would like to see them making use of the PE Cold Storage warehouse,” he says.
Warehouse extends options
Increase in citrus volumes
15000The pallet capacity of the
warehouse complex.
The cold sterilising capacity of the Port Elizabeth Cold Storage (PECS) terminal at Coega has been increased in order to meet growing
demand for the pre-cooling of apples and pears, as well as requirements of markets particularly in the East for fruit to undergo a cold
sterilisation process.It can now cold sterilise
1 200 pallets of citrus, apples or pears at a time, according to director Mark Jensen.
Expanded steri facility
6 | FRIDAY July 28 2017
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New black-owned importers and exporters in the Eastern Cape are being helped to enter into the market by the open-door policy of Ibhayi Freight Services.
“We seem to be one of the only freight forwarders willing to help new and smaller importers and exporters – and to accept walk-in business,” says Ibhayi Freight Services founder Kevin Glegg.
The company helps new entrants to fill in the necessary forms to register as importers or exporters
It is exciting to see how fast some of these companies are growing as they fill certain niches that the entrepreneurs have identified.
Ibhayi, which specialises
in the export of wool, mohair, hides and skins, has been expanding its range of services in response to the
needs of the Eastern Cape business community.
Most companies have relatively low volumes, which
makes them unattractive to forwarders with a higher cost structure.
“We often get referrals from other agents who are not able to help a client,” says Glegg.
According to his son Ryan, who is managing the day-to-day operations in Port Elizabeth, the company is now handling a wider range of goods than ever before.
They include compost for a mushroom farm, frozen chickens, components for a factory that makes wooden umbrellas, braids, handcrafts and trophies.
“Just that small sample shows how diverse the Eastern Cape is at a small business level,” says Glegg.
Helping new shippers to find their feet
Port Elizabeth freight and forwarding veteran Kevin Glegg is systematically handing over the reins of Ibhayi Freight Services, which he established in 2001, to his two sons Kyle and Ryan.
Both have been with the company for some time.
Ryan is based in the Port Elizabeth head office, while Kyle heads up operations in Cape Town.
“It is time for the next generation to move in with fresh ideas and renewed energy,” says Glegg – who is now able to play a lot more golf than he used to.
Handing over to the next generation
Kevin and Ryan Glegg ... handling a wider range of goods than ever before.
Having a global consolidation service based in Port Elizabeth is helping small to medium local companies to expand into export markets, according to Yvonne Palm, managing director of ECU Worldwide South Africa.
While the company provides both project cargo and full container load services by sea, air and land, the demand in the Eastern Cape comes largely from niche exporters, many of whom are expanding, according to Palm.
“A number of our smaller clients are achieving remarkable results. Many are finding new markets, which can only be exploited if the right logistics is in place,” she says.
“As a company we ensure that we keep adapting to meet the changing needs of the
market. Our service offering is that we can deliver from the customer’s door to the door of their client anywhere in the world,” says sales director Deleon van Rooyen.
Dealing with family-owned businesses such as those in the Eastern Cape has its own rewards and challenges.
Ownership of the business and pride in the products it makes is often much more personal than for those who are part of a bigger group.
“We understand that the cargo we carry for family-owned businesses is very precious to them personally, and we treat it accordingly,” says Van Rooyen.
Palm urges Eastern Cape exporters to look beyond traditional export markets in the east and west and to explore opportunities in Africa.
Importers are also likely to find new products.
“ECU Worldwide has representation in 49 countries in Africa, and there is a huge push by the company to help companies on the continent to trade more with each other,” she says.
The consolidator is also able to help companies that are investing in new equipment, according to Van Rooyen.
“We handle project cargo ranging from less than container loads to specialised cargo,” he says.
Consolidator helps smaller manufacturers to compete
Deleon van Rooyen and Yvonne Palm … door to door service.
Freight will keep moving on the Eastern Cape roads for the foreseeable future – while Transnet Freight Rail is focusing on bulk ore out of the Northern Cape rather than container traffic. The South African National Roads Agency Ltd (Sanral) has announced six major road projects, including the long-awaited toll road between East London and Durban.
The toll road will give businesses in East London and the Transkei two ports with direct calls to choose from – Durban and Ngqura.
The total investment in the national road network in Nelson Mandela Bay and the Sarah Baartman District Municipality will total around R1.6 billion.
Filling rail gap
FRIDAY July 28 2017 | 7
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Adele Mackenzie
The airline industry is calling for a dedicated aviation security force to be established
to address the ongoing corruption and criminal activities in and around OR Tambo International Airport (Ortia).
While ministerial intervention has been welcomed, CEO of the Board of Airline Representatives of South Africa (Barsa), June Crawford, said the matter was of “grave concern to African and international airlines”.
“It is my view that until such time as this is introduced, significant improvements will not be seen,” she said.
Minister of Police, Fikile Mbalula, has established a
high-level task team – headed up by a senior police officer with the rank of Major General – focused solely on addressing criminal syndicates targeting Ortia users, including logistics customers.
Mbalula met the team – comprising crime intelligence officers, forensic investigators, and the specialist investigative unit of the South African Police Service (SAPS), the Hawks – last week to “flesh out a master
plan for security” with all government agencies within the security cluster.
The minister has admitted that the biggest challenge with crime at the airport is “corruption and collusion” where police officers are in cahoots with criminals. “An obvious lack of police command and control has been highly concerning and the ability to
effectively manage deployed personnel will remain a major challenge,” he conceded.
Chris Zwiegenthal, CEO
of the Airlines Association of Southern Africa, commented that while industry welcomed the security measures, it was not possible at this stage to judge their effectiveness. “The air cargo community will support all efforts to combat crime,” he added, noting that collaboration between the Airports Company South Africa, the various law enforcement agencies deployed, and the cargo community as a whole should have the desired results.
Zwiegenthal said that crime in the airfreight logistics chain was “widespread”, pointing out that these crimes often did not stop in South Africa but were carried over into other countries that traded with South Africa.
“Worldwide organised crime
seeks the weak point that normally manifests through corruption in a specific country where criminals easily get away with impunity. It is thus important that the problem is recognised at ministerial level and action is taken at this level as is the case now,” he said.
A cargo operator based at the airport told FTW on condition of anonymity that he was aware of the allegations of insider involvement, pointing to a specific incident in which an SAPS captain was involved, specifically in the cargo robberies.
“To combat the current crime situation many cargo community members have launched their own security initiatives which are having some success," he said.
Call for dedicated aviation security force to address airport crime
It is important that the problem is recognised at ministerial level and action is taken at this level.– Chris Zwiegenthal
“
8 | FRIDAY July 28 2017
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Adele Mackenzie
T he air transport sector in South Africa provides “immense value to the people
and economy of the country”, supporting some 490 000 jobs and contributing US$12bn or 3.5% to the country’s GDP.
This was one of the key findings of the Oxford Economics report, ‘The Importance of Air Transport to South Africa’, released earlier this month by the International Air Transport Association (Iata) which commissioned the study.
“The study confirms the vital role of air transport in facilitating over US$110bn in
exports, some US$140bn in foreign direct investment and around US$9.2bn in inbound leisure and business tourism for South Africa. Now with the country in recession
it’s time to re-double efforts to promote South Africa as a destination for business, trade and tourism,” said Muhammad Ali Albakri, Iata regional vice president for the Middle East & Africa.
He added that “affordable, safe and reliable” air transport was crucial to economic growth, highlighting that it promoted skills development and was a catalyst for jobs.
Air transport contributes 3.5% to SA’s GDP
The study confirms the vital role of air transport in facilitating over US$110 billion in exports.– Muhammad Ali Albakri
“US$6bn
US$5bn
US$4bn
US$3bn
US$2bn
US$1bn
US$0bn US$3bn US$3.1bn US$1.3bn US$5.1bn
1Botswana
Mozambique
2 Namibia
3
Zimbabwe
4 Zambia
5
United Arab Emirates
7
Kenya
8Swaziland
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10
Value generated in SA
Direct 70 000
Supply Chain 130 000
Employee Spending57 000
Tourism230 000
Jobs
Top 10 most popular direct flights out of SA
United Kingdom
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FRIDAY July 28 2017 | 9
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South Africa’s contentious Mineral and Petroleum Resources Development Act (MPRDA) will in all probability land up in court.
This after years of being sent back and forth along Parliament’s legislative pipeline.
According to Lizel Oberholzer, director at Norton Rose Fulbright South Africa, the MPRDA was sent back to Parliament in January 2015 by the president as it was procedurally flawed – and he also had substantive concerns about the bill.
“Essentially it was felt that it had not followed a proper public consultation process and that it might be incompatible with certain trade agreements.”
Oberholzer said for the past two years a lengthy
public consultation process had been followed, with
the last meetings and negotiations scheduled for October this year after which the bill goes back to the national assembly for a final decision and then to the president for promulgation.
“We don’t foresee this happening until next year,” she said.
Commenting on whether this indicated an end to the contentious bill which has introduced real uncertainty into South Africa’s mining sector, Oberholzer said it was far from over, predicting that the bill was headed for court.
“The Department of Mineral Resources (DMR) has proposed a host of amendments to the bill but the rules of parliament state that they can only make changes on those issues highlighted by the president when he sent it back,” she said.
According to Oberholzer there are several scenarios that can now play out and just about all of them end with litigation.
“Option one sees all of the proposed amendments incorporated into the bill. This could see a legal challenge brought against the entire bill, the additional amendments and the public participation process followed,” she said. “Option two sees them incorporating only amendments raised in the
public participation process and includes amendments already made legally under Operation Phakisa – excluding the DMR’s changes. But this could still see the bill challenged in court.”
The third option, where no amendments are incorporated, will undoubtedly end up in court and could even see the bill scrapped completely with it all having to start from scratch. Oberholzer said this scenario was not likely to play out.
“The fourth option is exactly that – to scratch the bill as it currently stands and start afresh, but should we do this then there is no doubt that
opportunity in the oil and gas sector will pass South Africa by completely.”
Oberholzer said depending on what the parliamentary committee decided, the
president – on receiving the bill – still had the option to refer it to the Constitutional Court.
“I think the consensus is that the MPRDA in its current form is headed for the Constitutional Court. If that is the case it
will be over as the court is renowned for getting to the heart of matters,” she said. “If the president passes this bill I don’t see any way of preventing legal challenges. It will be taken to court.”– Liesl Venter
MPRDA likely to land up in court
There are several scenarios that can now play out and just about all of them end with litigation.– Lizel Oberholzer
“
MBABANE – Independent Power Producers were in the spotlight at the Southern African Development Community (SADC) high level resource mobilisation conference held in Swaziland earlier this month. The Energy Investor’s Forum was organised to showcase regional energy projects in the hope of luring investors. As host, Swaziland’s King
Mswati was the attending head of state at the event, which otherwise drew energy ministers and CEOs of utility companies from the SADC member states.
“Access to electricity in some member states is below 20%, and approximately 190 million people in the SADC region live without access to electricity,” said Mswati, who is the current SADC chairman.
“To meet projected energy needs, the region must increase power generation by 5 000 megawatts on average on an annual basis until 2022,” he said.
The conference recommended that the SADC Regional Development Fund be put into operation, with its component devoted to regional infrastructure support that will take the
place of national government guarantees for energy infrastructure projects.
“We need clarity on the modalities of cooperation between countries on transboundary projects,” Dr Stergomena Tax, SADC executive secretary, told the conference. “This needs to involve a clear mechanism on how the countries will address technical and other issues in
relation to (transboundary energy) projects.”
Delegates said the SADC secretariat’s role was to coordinate regional energy policies and provide guidelines for national energy development, while the financial institutions had shown willingness to bankroll worthy power generation initiatives. – James Hall
SADC woos investors for energy projects
10 | FRIDAY July 28 2017
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Africa holds major potential for South African exporters but it is not an easy market of quick returns and requires tenacity, f lexibility and staying power.
This was the advice from Boyce Lloyd, CEO of KWV, to members of the Exporters Club Western Cape recently when asked about his experience in fast moving consumer goods (FMCG) on the continent.
Lloyd, who was responsible for the SAB Miller African expansion strategy for several years, said understanding the local market was crucial – especially in Africa.
“That requires moving
out of the boardroom and into the streets to meet ordinary people. You have to spend time in the market talking to the people who are going to be purchasing your products or services,” he said. “It is in this process where you figure out where the weaknesses and gaps are. That is where your opportunity lies. You have to understand your market and you have to understand your customer.”
He said investing in
Africa had major potential but it remained a complex operating environment that could be a logistical nightmare at times.
“There are a handful of rules for exporters venturing into Africa, particularly in the FCMG space,” he said. “Find a good local partner who is reliable and understands your business.
Secondly, plan for the unexpected and have good back-up plans in place, and thirdly make sure you have
the ability to stick it out, because it does not happen overnight in this market.”
He said in Africa exporters needed to understand that they would have to carry some of the risk and therefore it was best to limit a product portfolio to only a handful of items.
“The African landscape is complex enough without adding to that complex, unpredictability with a range of services and products,” he said. “It is best to decide carefully what you are going to focus on and what products you want to sell and what do you want to achieve with them. Stick to that focus regardless of what noise is around you.”
The introduction of larger vessels by Mediterranean Shipping Company (MSC) on its Far East to West Africa trade means “space is not an issue” for South African
companies trading with West Africa, according to national commercial director Glenn Delve.
Efficiencies have also improved with the use of the port of Lomé in Togo as MSC’s West African hub.
“Lomé is proving to be an efficient hub port for MSC. The connections are really smooth.
“We have four feeders which are offering a very good service to the 16 points of delivery that we call via Lomé,” he says.
Connectivity through Nigeria is also improving.
“We are working more closely with Sifax
Terminal in Nigeria to provide solutions for customers wanting to use Apapa as a point of delivery.”
Delve sees opportunities
for increased trade between South Africa and the West African region.
“The opportunities are good given that these are emerging and growing markets.
“However, a shortage of foreign currency remains the biggest challenge for new and prospective shippers and receivers.”
Another problem that shippers need to plan for is that “customs formalities and clearance in West African ports are always challenging.
“As a result there is a constant request for extensive
free equipment demurrage,” he says.
But, companies are overcoming the challenges and are trading successfully
with the region.
“The trade is stable, with standard and niche commodities moving both ways.
“There is an increase in the volumes of dry cargo year-on-year but reefer exports from South
Africa have dropped slightly on account of reduced availability of product – mainly apples and pears,” he says.– Ed Richardson
Capacity supports trade growth with West Africa
A shortage of foreign currency remains the biggest challenge for new and prospective shippers and receivers.– Glenn Delve
“
Understanding the local market requires moving out of the boardroom and into the streets.– Boyce Lloyd
“Lack of infrastructure is currently the biggest stumbling block in the development of a gas economy in South Africa.
According to Nick Mitchell, COO of Renergen, an integrated alternative and renewable energy business that owns the country’s first and only onshore gas production licence at Tetra 4 in the Free State, there is still a lot of scepticism about gas in the country, but it offers very real benefits.
“It is undoubtedly a cleaner form of energy and the decision by the Industrial Development Corporation (IDC) to loan Tetra 4 R218m for its expansion project demonstrates government’s support for natural gas,” he said. “The gas economy will arrive. Everyone has a different timeline but gas, we believe, is here to stay.”
He said players in the field had to be prepared to invest in their own infrastructure as this was possibly one of the biggest stumbling blocks.
“We have had to invest hugely in infrastructure but also in teaching the market what gas can do and how it can be a game changer in the country.”
He said Tetra 4 had changed the way onshore production operated and was proving not only that it was a viable option in South Africa but for sub-Saharan Africa.
“Gas offers the energy market reliable, cleaner and cheaper fuel. A 90% reduction in emissions is just one of the gains.”
According to Mitchell the expansion of Tetra 4 will allow the company to expand its reach and offer gas as a viable fuel option to more logistics companies.– Liesl Venter
Infrastructure barrier to growth of gas economy
Three rules for exporters venturing into Africa
FRIDAY July 28 2017 | 11
GENERAL AGENTS JOHANNESBURG DURBAN CAPE TOWN PORT ELIZABETH RICHARDS BAY SALDANHA BAY www.diamondship.co.za (011) 263-8500 (031) 570-7800 (021) 419-2734 (041) 373-1187/373-1399 (035) 789-0437 (022) 714-3449
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The spotlight has once again fallen on truck owner liability following last month’s plea agreement in the Field’s Hill case, with transport lawyers suggesting that stronger sanctions against operators within the auspices of the National Traffic Act (NTA) would not be unrealistic.
But they have stressed that improved enforcement of the regulations is key to ensuring maximum penalties.
Gregory Govender, the owner of the truck that ploughed into several vehicles on Field’s Hill in Pinetown in September 2013 killing 24 people, has entered into a plea agreement with the State that sees him doing no jail time but instead having to pay a R25 000 fine.
Meanwhile Sanele May, the driver of the vehicle, is currently serving a 10-year sentence at Umzinto Prison in Scottburgh, KwaZulu Natal.
The SA National Civic Organisation (Sanco) has since called for truck operators/fleet owners to face the “full wrath of the law” for carnage on the country’s roads
“Truck drivers are put under tremendous pressure by their companies who must not be exonerated,” said Sanco spokesperson Jabu Mahlangu, claiming that long-distance drivers were in most cases “sacrificial
lambs” who took the fall for “unrealistic company policies”.
Nerisha Besesar, partner, and Nick Veldman, associate in the litigation department at Shepstone & Wylie Attorneys told FTW that the call from Sanco was “somewhat realistic” but noted that each case should be judged independently and on its own facts.
“When comparing the sentences handed down in the Field’s Hill incident, it’s important to correlate those sentences with the types of charges brought against the driver and the owner and then their responses towards their respective charges,” said Besesar. The charges against the driver, Sanele May, were not just in relation to the accident itself but included charges relating to holding a fake driver’s licence and entering South Africa illegally, she added.
“There were 31 charges against him and he pleaded
guilty to all of them. There were four charges against the owner and these
ranged from operating an unroadworthy vehicle‚ failing to
ensure public safety by giving maintenance
responsibilities to unqualified persons, as well as employing an illegal foreigner and failing to do a proper background check,” she said, pointing out that the owner had entered into a plea and sentence agreement with the National Prosecuting Authority (NPA).
“One can therefore see this as attributing a ‘lighter sentence’ to the owner than the driver,” she said.
Peter Lamb, director at law firm Norton Rose Fulbright, told FTW that while the NTA
did prescribe certain penalties to truck owners in incidents such as this one, some might argue that the current penalties in the Act were insufficient.
“In my view, the current
legislation under the NTA is sufficient but there needs to be improved enforcement of the provisions of the Act. This is something the Department of Transport should focus on,” he said.
According to Lamb, unroadworthy trucks and unlicensed drivers are “simply unacceptable”. “Sanctions for non-compliance with the NTA must be strengthened and enforced with greater vigour,” he said.
Veldman agreed, pointing out that there were police officers and state attorneys who worked “tirelessly” to ensure offenders were brought to book. “However the number of road deaths and injuries are indicative of a lack of enforcement,” he said, suggesting that more resources should be allocated to investigating officers and state attorneys to ensure that the “most justifiable” outcome was reached once the matter was pursued criminally.– Adele Mackenzie
Enforcement key in battle to up delinquent truck owners’ liability
The number of road deaths and injuries are indicative of a lack of enforcement.– Nick Veldman“
LAST WEEK’S TOP STORIES ON
SA braces for threats to shut down economy With South Africa’s industrialisation already in a fragile state, manufacturers are bracing themselves for the impact of a looming strike by the National Union of Metalworkers of South Africa (Numsa).
Transnet conducts own enquiry into alleged tender misconductTransnet SOC is conducting its own internal enquiry into allegations by the #GuptaLeaks investigators around tenders awarded by the state-owned entity (SOE), said Transnet spokesperson, Viwe Tlaleane.
Logistics major acquires two perishable companiesLogistics major Kuehne + Nagel has announced the acquisition of two perishable companies – US-based CFI, Commodity Forwarders Inc, which specialises in perishable airfreight, and Trillvane, one of
the largest perishable specialists in Kenya.
Red tape holds back equipment repair sectorThe servicing of oil and gas equipment could be a money-spinner for South Africa – but red tape is costing the country more than $250 million per annum as the business shifts to other more friendly environments.
Fears that mining sector could lose further investmentWith the controversial Mining Charter being put on ice – pending a legal challenge by the Chamber of Mines – legal advisers are now arguing that the latest proposal to restrict the granting of new mining and mineral rights is a way of trying to force the charter through the back door.
National carrier faces government subsidy withdrawalNational carrier, Air Namibia, has been urged by the government to secure its own funding for monthly expenditure, including the leasing of planes.
12 | FRIDAY July 28 2017
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We won’t do anything without appropriate consultation with trade. Every design we have we will sit down and engage with our stakeholders.– Beyers Theron
“
are committed to holding their hands throughout the process.”
Designed to provide an overview of what is to come – the roadshows will run to the end of August, with additional trade sessions possible in Gauteng where the events have been oversubscribed.
“When NCAP as a project started, in hindsight it may have been premature to consider definitive timelines,” said Theron. “If you engage trade in a consultative process in something as important as legislation, and in particular the Rules to the Acts, you must expect things are not going to happen quickly – especially if you look at the extent of the changes emanating from these consultations.
“Engagement on the rules process only concluded last year – and after the engagements there is a period of time during which the drafters need to adjust the rules. All of which is a lengthy process.”
What’s equally important is that legislation can’t be implemented piecemeal.
“With the new legislation, there’s a closure of the 1964 Act and a new beginning – and for us that’s a challenge because of the size and enormity of what we are talking about.”
And it’s the reason that Sars has been looking at ways of bringing some of the functionality forward. “We’ve been examining how we can limit what
happens on the date that the new legislation goes live, how we can do the change management internally and externally and get trade used to a new process prior to implementation. And that’s part of what we are sharing on these roadshows.”
The objective is to bring on RCG functionality under the 1964 Act so that stakeholders gradually align with the new way of working. “By bringing in elements under the 1964 Act we can prepare the ground for the 2014 Act,” said Theron.
“MPR was prioritised for implementation last year because it prepares all the different stakeholders who are obliged under the new act to license and to start getting their reports into our system. RCG takes control over the supply chain a step further - and eventually, when RLA is ready, we’ll bring in the licensing requirements for RCG clients.”
RCG will be the first work package to be released – and while Theron was reluctant to give a time line, it is likely to be next year.
He stressed however that it was one thing for Sars to be ready – but it was equally important for industry to be ready.
“If you look at the electronic reporting compliance to MPR today – for seafreight it’s just over 50% and for air 15%. For this Act to go live, if I can’t push up that figure to 90-95% we have a dilemma. With that level of compliance OR Tambo International could come to a standstill if the Sars systems are unable to match clearances to their respective cargo declarations in order to make holistic risk assessments. It’s therefore important that we use MPR to raise the data quality in the industry and to raise the compliance.”
When MPR was implemented, Sars gave industry an undertaking that if they became compliant at an acceptable level and maintained that for three
months they would be permitted to go 100%
paperless in the cargo reporting space.
According to Theron, this was achieved by the first compliant cargo
reporter last month.Once RCG
FTW3527SD
Sars spells out NCAP roll-out plans Trucking association
Mokwana, pointed out that when members were in need of advice or assistance at any point along the transport value chain they could request this from any member of the database of verified black-owned businesses which would be compiled by Tasa.
“We are going to appoint black-owned companies that will be able to supply diesel to our members,” added Phadi. She noted that this would enable the association to dictate the rates that members would pay for fuel, “as owners of smaller fleets were more likely to be taken advantage of by suppliers”.
Members are required to pay a R10 000 once-off fee. However Phadi pointed out that “a plan” could be made for those unable to afford it.
The Department of Transport (DoT) added its support to the formation of Tasa, with deputy minister Sindisiwe Chikunga highlighting the association as a vehicle for transformation within the sector.– Nicole Jacobs
is bedded down, Sars will move onto RLA and DPS (Declaration Processing System), the three streams at the centre of the new Act.
“When it comes to DPS a lot of development will have to happen on the industry side – and at some point we will start engaging the industry IT service providers about the impact of the change of declaration processing and what they would have to build.”
The idea is to get the industry ready for the new legislation. “What we are doing is prioritising so that the impact when we switch on that legislation will be minimal. For example, in the case of RLA we will start bringing clients on board long before we go live with the Act – we’ll work with them to register, clean their data and be ‘implementation ready’ for the new Act whilst we in parallel continue current processes until switch over.”
DPS is the final major component to be delivered – when DPS is ready, then the new Act will be ready to go live as well.
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From page 1