Reports, agreements and work completed

Introduction

This report reflects Nedlac's activities during its second year of existence. As in theprevious annual report, the information contained in this report has been updated toreflect activities up to early May 1997.

During the first year, much time and energy was spent on activities related to theestablishment of Nedlac. Nonetheless, seven agreements and reports were concluded in thefirst year, including the Labour Relations Act (LRA).

In Nedlac's second year, 20 formal agreements and reports were concluded, and severalspecial projects and events were undertaken. This increase in activity demonstrates theconsolidation and rapid maturing of the process of social dialogue.

Where applicable, the agreements and reports concluded are presented according tothemes.

Implementation of the LRA

The new LRA, which was agreed in Nedlac in July 1995 and which Parliament passed intolaw in September 1995, came into effect on 11 November 1996. The implementation of the newLRA marked a new era for labour relations and collective bargaining in South Africa. Thenew LRA, as the centrepiece of the Department of Labour's five-year plan, complements theculture of consensus decision-making which Nedlac was designed to cultivate. As a resultof its negotiation in Nedlac, this Act enjoys a degree of consensus to which few otherlaws can lay claim.

Nedlac's role in the implementation of the LRA

The implementation of the LRA required a number of structures to be established andregulations, schedules and rules to be finalised. Nedlac was required to play asubstantial role in the implementation process. During the past year, the Labour MarketChamber has spent a considerable amount of time on matters related to the implementationof the Act.

1. Labour relations amendment bill

A Nedlac report on the labour relations amendment bill, which primarily provided fortechnical amendments to the LRA, was submitted to Parliament in September 1996. Theamendment bill did contain three substantive amendments:

• The number of years' experience required to be considered for appointment as a Labour Court judge was lowered from 10 to seven years.
• The definition of a sector was amended to allow for bargaining and statutory councils to have chambers for different industrial subsectors.
• Compulsory arbitration was provided for where an entire bargaining unit is designated as a maintenance service and proscribed from taking industrial action.

2. Schedule 9 of the LRA

In a bid to make bargaining councils more accommodating of the concerns of small, microand medium-sized enterprises (SMMEs), the LRA establishes that a collective agreement of abargaining council must make provision for an independent exemptions board, in order forthe agreement to be extended by the Minister of Labour to non-parties. In appointingmembers of the independent exemptions board, the bargaining council must have "dueregard" to nominations made by institutions listed in schedule 9 of the Act. Nedlacwas consulted about the schedule before it was finalised in October 1996. Schedule 9 ofthe LRA lists two institutions: the Ntsika Enterprise Promotion Agency, which providesnon-financial support to SMMEs, and the Centre for Small Business Promotion, theDepartment of Trade and Industry directorate responsible for small business.

3. Schedule 7 of the LRA

Schedule 7 of the LRA sets out certain transitional arrangements for the phasing in ofthe changes from the Labour Relations Act of 1956 to the new Act. Amendments to schedule 7were agreed in September 1996 in order to facilitate the implementation of the new Act.These amendments were of a technical nature and covered matters such as pending inquiriesby the Registrar, exemptions granted under the old Act and disputes arising beforecouncils have been accredited by the Commission for Conciliation, Mediation andArbitration (CCMA).

4. The Labour Court and Labour Appeal Court

The LRA replaces the old Industrial Court with a new Labour Court, which has the statusof a Supreme Court. The Act confers on Nedlac a role in advising the President on severalmatters pertaining to the Labour Courts.

4.1. Seat of the Labour Court

It was resolved by Nedlac on 26 January 1996 that the main seat of the Labour Court would be Johannesburg and that the court should also have seats in Cape Town, Port Elizabeth and Durban.

4.2. Appointment of the Judge President of Labour Court

In March 1996, Nedlac nominated Judge John Myburgh as Judge President of the Labour Courts and Judge Johan Froneman as Deputy Judge President. They were subsequently appointed by the President.

4.3. Appointment of Labour Court judges and Labour Appeal Court judges

Nedlac provided advice on the appointment of judges to the Labour Courts to the President in August 1996. The President subsequently made the following appointments:

Labour Appeal Court

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  • Judge Edwin Cameron
  • Judge Johan Conradie
  • Judge Chris Nicholson

Labour Court

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  • Professor Dion Basson
  • Judge Elna Revelas

4.4. Rules Board of Labour Courts

The members of the Rules Board of Labour Courts, which regulates the conduct of proceedings in the court, were nominated by Nedlac in May 1996 and appointed by the Minister of Justice. The members of the Rules Board of Labour Courts are:

•  
  • Advocate Paul Pretorius, a practising advocate.
  • Mr Puke Maserumule, a practising attorney.
  • Mr Rob Legrange, representing the interests of employees.
  • Mr Andre van Niekerk, representing the interests of employers.
  • Acting Judge Adolph Landman, representing the interests of the state.

5. Model constitution for a statutory council

A model constitution for statutory councils was drafted by the Department of Labour inconsultation with Nedlac to serve as the basis for the establishment of statutorycouncils.

6. Essential services committee

The LRA establishes an essential services committee, under the auspices of the CCMA, toconduct investigations into and to decide whether a service can be designated an essentialservice, to determine disputes about whether a service is an essential service and todetermine whether or not the whole or part of any service is a maintenance service.

Nedlac nominated members of the essential services committee in September 1996. Thefollowing members were subsequently appointed by the Minister of Labour:

• Dhaya Pillay (chairperson), nominated by government.
• Sunil Narian, nominated by labour.
• Professor Kate Jowell, nominated by business.

A set of regulations that define the functions of the essential services committee andthe procedures for conducting investigations were agreed by Nedlac on 28 February 1997.

7. The launch of the LRA

The LRA came into effect on 11 November 1996. To mark this watershed occasion, Nedlacorganised an open-air public rally at the Library Gardens in Johannesburg. The rally wasattended by several hundred workers and managers, and was addressed by the Minister ofLabour, Mr Tito Mboweni; Mr Zwelinzima Vavi, representing labour; Mr Raymond Parsons,representing business; and Nedlac Executive Director, Jayendra Naidoo. Some trade unionsand employer organisations, including the Chamber of Mines and National Union ofMineworkers (NUM), were presented with their new certificates of registration from theRegistrar at the rally. The proceedings ended with a performance by the NUM's workers'choir.

8. Education on the LRA for workers and employers

In recognition of the critical role of education for potential users of the Act so asto enhance its successful implementation, Nedlac successfully secured funding foreducation projects on the new LRA. A substantial amount of funding for the three tradeunion federations was obtained from the African-American Labour Centre, and an additionalamount was made available from Nedlac's own funds to two small business organisations: theFoundation for African Business and Consumer Services (Fabcos) and Nafcoc. More details ofthis project can be found below in the section on capacity-building.

The Workplace Challenge

The Workplace Challenge is a joint initiative of Nedlac's Trade and Industry Chamberand the National Productivity Institute. It was initiated to help meet the challenge ofSouth Africa's re-entry into the global market and the resulting need for companies torespond to the pressures of foreign competition for domestic and international markets.

Phase one

The first phase of the Workplace Challenge consisted of provincial workshops whichbegan in October and were completed in December 1996. The workshops were designed togenerate broad participation by the key players in each province, focusing on labour andbusiness, with representation from the manufacturing, economic and public services, tradeand commercial services and the primary sector.

The main objectives of the workshops in the first phase were:

• To sensitise participants to the problems of the various sectors of the economy in respect of productivity, competitiveness and employment creation.
• To begin to develop a common language and understanding of the key concepts involved in industry-sector analysis and strategic development.
• To alert the roleplayers to the measures available to improve the competitive position, productivity performance and employment of sectors and firms.
• To enable participants to hear each other's interpretation and analysis of the problems and their potential solutions.
• To assess awareness of national and provincial government initiatives.

Nine provincial workshops were held, covering all provinces except the Free State andattended by approximately 900 participants from business, labour and government. Theworkshops were each run over a two-day period with inputs in the morning sessions fromspeakers representing provincial government, the Department of Trade and Industry, theNational Productivity Institute, the Nedlac secretariat, workplace change specialists andbusiness and labour. During the afternoon of both days the participants broke intocommissions to discuss the inputs and answer specific questions relating to their sectorsand workplaces.

Depending on the representation of each sector there was a maximum of four commissionsat each workshop. These commissions were:

• Manufacturing sector.
• Primary sector.
• Trade and commercial sector.
• Economic and public sector.

Issues highlighted in the workshops included definitions of productivity, making theentire value chain competitive, establishing best operating practices at workplace level,agreeing workplace change, improving employment security, the need for skills development,improving business-labour relations, and coordinating the work of national and provincialinstitutions.

Phase two

Building on the work of phase one, the second phase will consist of workshop programmesin selected sectors which are to be designed according to the specific needs of thesector.

This will include reviewing existing initiatives in the sector, scoping exercises,constituency capacity-building activity and workshops, and follow-up activity for sectorsor subsectors at regional and/or national level. The workshops will assist the socialpartners in a particular sector or subsector to develop structures and strategies toimprove workplace cooperation and performance. They will also help participants to drawfrom existing assistance measures and programmes provided by government and other bodies.

Participating sectors will be agreed by the Workplace Challenge committee and the Tradeand Industry Chamber. Potential sectors will be identified by reviewing existing sectorprocesses, cluster initiatives, training programmes, provincial and spatial initiativesand industry bargaining structures. Criteria for choosing sectors have been agreed.

A representative sectoral work group will be constituted after the workshops to provideguidance for follow-up action in the sector. Government and other bodies which providemeasures and programmes which could be useful in this process will provide information onthese and will assist the sector in making use of them.

The second phase's programme will be funded by the Department of Trade and Industry.Government's participation in the programme will be jointly coordinated by the departmentsof Labour and Trade and Industry.

Crime and violence

The country's fight against crime and violence acquired added momentum on 21 November1996 when Nedlac and the Secretariat for Safety and Security jointly convened a high-levelnational conference of stakeholders to begin to forge effective partnerships to combatcrime at the local level. The keynote address was delivered by President Nelson Mandela.The conference was also addressed by the Minister of Safety and Security, Mr SydneyMufamadi, and by several constituency leaders: Mr Sam Shilowa for labour, Ms WendyLucas-Bull for business, Mr Mlungisi Hlongwane for community and Mr Mluleki George forsport. The conference was chaired by Nedlac's Executive Director.

Participants in the conference included representatives of the South African PoliceServices (SAPS), national government ministeries and departments, the provincial MECs forsafety and security, trade unions, Business Against Crime, non-governmental organisations,sports organisations, women's organisations, youth organisations, rural organisations,civics, religious representatives, members of Parliament and diplomats.

A comprehensive planning process preceded the conference. A working group, establishedunder the auspices of Nedlac's Development Chamber, prepared for two months prior to theconference to ensure an action-orientated outcome. The conference's theme was"Building commitment to partnerships for local action". Six commissionsaddressed the following:

• Local-level partnerships.
• Public awareness programme.
• Youth mobilisation.
• National priority crimes.
• Victim support programme.
• Local-level development.

The reports from the commissions culminated in the adoption of a declaration committing allparticipating organisations to make 1997 a year of action against crime and violence. Tothis end each of the participating organisations have subsequently developed and begunimplementing action plans.

The working group on crime and violence has been given the responsibility to:

• Assist with the development and coordination of constituency action plans.
• Monitor the implementation of crime prevention programmes.
• Coordinate activities and programmes between organisations where this is required.

Following the conference, several organisations have submitted action plans formobilising their members against crime and violence. Some of the plans include:

• Business Against Crime has launched a number of projects aimed at improving the operational performance of police stations; providing mentors from the business community for station leaders; and compiling a database of all anti-crime initiatives to increase coordination and avoid duplication.
• The Secretariat for Safety and Security is running provincial workshops for all organisations to identify priorities and agree on mechanisms for combating crime-related problems specific to each province.
• Cosatu organised marches on International Women's Day on 8 March 1997 to focus on violence against women and children. The federation has called on its members to participate in community policing forums or to become reservists in the SAPS.
• Sanco organised a march to launch Operation Mpimpa on 21 March 1997, aiming to mobilise people to cooperate with the police by providing the information that often leads to arrests.
• The South African Council of Churches is mobilising religious organisations to support anti-crime activities.
• Training of health-care workers to provide counselling and victim support is being undertaken by the Medical Association of South Africa.
• Sports organisations have launched a project called Sport Against Crime to mobilise sportspeople and supporters.

Action plans have also been received from the National Youth Commission, the SA BusOperators' Association, Gun Free South Africa, Fedusa, the SAPS and the Simunye Project.

The working group on crime and violence reviews progress on a regular basis. Furthermeasures to coordinate action against crime and violence are being considered.

Job creation in public works and the constructionindustry

A framework agreement was concluded in February 1997 on job creation in public worksand the construction industry, with special reference to the community-based public worksprogramme.

Nedlac's Development Chamber has paid considerable attention to the issue of employmentcreation through labour-intensive methods in public works and the construction industry. Aspecial session was arranged to consider this issue and subsequently a job creation panelwas established which developed the framework agreement for consideration by the ExecutiveCouncil.

The report evaluates the existing community-based public works programme which waslaunched as a presidential lead project as part of the national public works programme. Agrant of R250 million was allocated from the reconstruction and development programme fundto finance the community-based public works programme until the end of the 1996-97 fiscalyear. The framework agreement identifies problems and obstacles with the existingcommunity-based public works programme, and makes proposals to deal with each problem. Itrecommends that the community-based public works programme be continued, and that theproposals to overcome the problems and obstacles identified be implemented.

The agreement deals with:

• Evaluating and monitoring projects.
• Insufficient skills development and upgrading through training programmes.
• The short-term nature of projects.
• Designing labour-intensive projects without compromising the quality of services, the speed of delivery and costs.
• Targeting the most needy: women, youth, the disabled and rural communities.
• Improving the allocation of funds by the Department of Public Works.
• Maintenance of completed projects.
• Improving the supplying of materials to projects.
• The construction industry as one of the vehicles for labour-intensive public works programmes.

NEF job creation project

Among the first agreements reached by Nedlac's predecessor, the NEF, in 1993 was anagreement on a R250-million job creation project. In terms of this project, funds wereallocated to:

• Generate employment and income-generating opportunities for the unemployed as a short-term relief measure.
• Contribute to the welfare needs of communities through the creation of assets that will meet their basic needs and can be sustained in the longer-term.
• Improve the skills of participants through accredited training.
• Strengthen the capacity of communities to manage self-help initiatives.

The programme was directed by a tripartite structure which agreed the guidelines forprojects and approved the projects to which funding was granted. The project was managedby the Development Bank of Southern Africa.

Communities were invited to submit applications for funding between August and December1995. More than 2 000 applications were received from a wide range of organisations, and570 projects were eventually funded. Successful applicants had to meet criteria relatingto:

• Labour intensity.
• The extent of community involvement and management.
• The provision of skills training.
• The level of implementation capacity.
• Access to normal budget funding.
• The economic impact of the project.

R256,8 million was allocated to 570 projects, resulting in an average of 14 364 peoplebeing employed each month. Up to the end of September 1996, a total of 344 725 personmonths of employment had been created as a result of the projects. In addition the projectresulted in the building of roads, bridges, sanitation facilities, as well as educationand community facilities.

To mark the completion of the project, a special focus event was held on 21 October1995 at the Tshepong Stimulation Centre in Katlehong. The centre was one of thebeneficiaries of the NEF project. Speakers at the event included the Minister of PublicWorks, Mr Jeff Radebe, as well as representatives from business, labour and government whohad been involved in the project. The minister remarked in his address that "it wasin this programme that the real seeds of the national public works programme wereplanted".

The Budget

The national Budget remains a central focus of the work of the Public Finance andMonetary Policy Chamber. A report on the chamber's discussions on the 1997-98 Budget wassubmitted to government for consideration.

As with the 1996-97 Budget, the discussions allowed for an exchange of information andviews, while acknowledging that government remains solely responsible for the Budget andhow it is presented. The process of discussion provides government with an opportunity totake account of the perspectives and concerns of labour and business on the Budget.

In the course of the discussions the chamber interacted with the Katz Commission andthe Financial and Fiscal Commission. In addition, a workshop on the revised Budget processwas held in September 1996, attended by both the Minister and the Deputy Minister ofFinance.

In previous years business and labour could make inputs on expenditure through theBudget committee and function committees. As a result of the new Constitution, thesecommittees fell away and the chamber's input into the 1997-98 Budget process wasconsequently limited.

The tax task group of the chamber considered the revenue-side of the 1997-98 Budget.The report puts forward recommendations by business and labour on:

• Value-added tax (Vat).
• Excise tax or Vat on luxury goods.
• Personal income tax and fiscal drag.
• Secondary tax on companies.
• Capital gains and wealth tax.
• The taxation of retirement funds.
• Improved tax administration.
• Tax amnesty and tax morality.

For the forthcoming year, the chamber has agreed to enhance its impact on the Budgetprocess by making a submission on the medium-term expenditure framework of the Budget, andto consider the reform of the taxation system on a holistic basis.

Amendment to the Insolvency Act

Following agreement on an amendment to the Insolvency Act, employees' financial claimsagainst an insolvent employer will in future receive more preference than was previouslythe case.

The agreement, negotiated by a subcommittee of the Labour Market Chamber, has broughtSouth African law in line with International Labour Organisation (ILO) convention 173called "Protection of workers' claims (employer insolvency)".

The amendment to the Insolvency Act:

• Extends the category of employees' claims that are privileged to include holiday pay, severance pay, employer contributions to pension, provident, medical schemes or other similar insurance fund, as well as up to three months salary or wages.
• Increases the privilege enjoyed by employees' claims so that employees' claims now rank ahead of the claims of the state for unpaid statutory obligations (for example, contributions to the Unemployment Insurance Fund [UIF], unpaid tax deducted from employees' wages, and unpaid customs duties).
• After meeting the claims of secured creditors, the monies in an insolvent estate are paid out to meet any funeral expenses of the insolvent, the costs of sequestration and execution of the insolvent estate. Thereafter the claims of employees will be paid.

The amendment will be tabled in Parliament during 1997.

Compensation for occupational injuries and diseasesamendment bill

The purpose of the amendment was to effect a number of corrections to the principalAct, to rectify certain ommissions from the principal Act, to make provision for alternatemembers to the Compensation Board, and to express certain provisions more clearly. It wasalso agreed that the Compensation Board would be consulted by the minister of Labourbefore amending any of the regulations and schedules to the Act. The amendment will betabled in Parliament during 1997.

ILO convention on part-time work

The Executive Council on 25 April 1996 agreed to recommend to government that ILOconvention 175, which deals with the rights of part-time workers, should be ratified.Convention 175 seeks to ensure protection for part-time workers in respect of access toemployment and social security, as well as in respect of working conditions like annualleave and sick leave.

This agreement brings to six the number of ILO conventions which Nedlac has recommendedthat government ratify. The other five are:

• Convention 29 on forced labour.
• Convention 87 on freedom of association.
• Convention 98 on the right to organise and collective bargaining.
• Convention 105 on the abolition of forced labour.
• Convention 111 on discrimination.

Social clause

A framework agreement was concluded on the social clause in June 1996.

The agreement reiterates South Africa's commitment to promoting human rights and toensure the ratification and observance in South Africa of the core ILO conventions.

In the international context it is agreed that the social clause in trade agreementsshould not be abused as an instrument of trade protectionism. The relationship betweentrade and worker rights is also recognised, as well as that increased liberalisation oftrade should be accompanied by the harmonisation of labour standards and the observance ofthe core ILO conventions.

The social partners agree to actively support the ILO campaign for universalratification and observance of the core conventions. In addition, a multifaceted strategyto promote respect for labour standards has been agreed.

This includes:

• Ratification and observance by South Africa of the core ILO conventions.
• Encouraging South Africa's trading partners to ratify the core conventions.
• A side-letter or memorandum of understanding to be proposed in respect of bilateral trade agreements to commit the contracting countries to ratifying and observing the core ILO conventions.
• Pursuing the ratification and observance of the core ILO conventions in the southern African region.

Regular discussions are held to develop joint strategies to promote the approachoutlined in the framework agreement internationally, in particular in the World TradeOrganisation (WTO), the ILO and the Southern African Development Community (SADC).

The first ministerial conference of the WTO held in Singapore in December 1996 includeddelegates from the business and labour constituencies in the official governmentdelegation. The Singapore ministerial declaration included a resolution on labourstandards.

Regional industrial development programme evaluation andnew investment incentives

Evaluation of the regional industrial development programme

Nedlac was requested by government in May 1995 to conduct an evaluation of government'sregional industrial development programme (RIDP), which was the main vehicle forattracting new investment. The evaluation was conducted by the Trade and IndustryChamber's Japanese Grant Fund (JGF). A counterpart group comprising representatives frombusiness, labour and government and the economic affairs ministries of the nine provinceswas established. The study was conducted by consultants and the work in progress was madeavailable at various stages of the study. The final report was tabled in the Trade andIndustry Chamber on 29 August 1996. The report recommended that the RIDP should bereplaced with a tax-based incentive scheme for attracting investment.

Tax incentives

Government announced in June 1996 that the RIDP would be replaced by a new tax-basedincentive scheme in terms of which new investments would enjoy tax holidays of up to sixyears, based on qualification criteria relating to human resource development, labourabsorption and regional and sectoral priorities. The recommendations arising out of theRIDP evaluation were used by government to develop the new incentive scheme.

The details of the new scheme were discussed in Nedlac. The scheme's regulationsinclude provisions for:

• Reporting on potential revenue foregone as a consequence of tax holidays.
• The separate reporting of the training and wage components of the human resource development criterion.
• The representation of business and labour on the regional investment development board.
• The board to consider the effect of the scheme on existing companies and on the long-term investment plans of companies enjoying tax holidays.

Small/medium manufacturing development programme

One of the other recommendations arising from the RIDP evaluation was the introductionof a new grant-based scheme for small business-the small/medium manufacturing developmentprogramme. The objectives of this programme are to encourage investment in manufacturing,to encourage small and medium-sized manufacturing and to facilitate a higher degree oflabour absorption.

National small business bill

In June 1996 agreement was reached on a draft national small business bill. The billaddresses the institutional and regulatory framework required for the promotion of SMMEs,and specifically provides for:

• The setting of standards to define SMMEs.
• The establishment of the National Small Business Council to represent and promote the interests of SMMEs at national, provincial and local levels, and to advise organs of the state on economic policy affecting SMMEs.
• The establishment of the Ntsika Enterprise Promotion Agency to expand and coordinate the provision of non-financial support to SMMEs through intermediaries.
• An overall framework providing guidelines to the executive organs of the state at national, provincial and local level for assessing the impact of laws and policy on SMMEs.

While business and labour endorsed the bill, they each recorded reservations which theywere free to take up during the parliamentary process on the bill.

The national small business bill was passed into law by Parliament on 7 November 1996.

Guidelines for the establishment of local developmentstructures

In February 1997, after an extensive consultation process at provincial and localgovernment level, a set of guidelines for the establishment of local developmentstructures was agreed, as well as an implementation plan for these guidelines.

The process arose out of a recognition that the task of promoting, guiding andfacilitating the implementation of local development was made more difficult by theconflict emanating from the proliferation of structures at the local level.

The development of guidelines started with a special focus session on local developmentin the Development Chamber. Follow-up meetings with development structures in eachprovince were held, including organised local government, provincial government,line-function departments and, where accessible, non-governmental organisations (NGOs),community structures, district councils and political parties.

The agreement identifies two levels of development structures that may be establishedat local level, namely:

• Local government-level development structures, which would function at a broad level and would include representation by community structures, labour, business, NGOs, the local authority and other local stakeholders.
• Community-level development structures, which would be broadly representative of a single community within a local authority, and which would comprise all stakeholders in a particular community, for example, civics, residents structures, church groups, etc.

The guidelines also propose:

• The establishment of local development offices to act as the locus of community partnerships and activities.
• Processes for the appointment and training of community development facilitators.
• The compilation of a database to facilitate the sharing of experiences.
• Accreditation and procedural guidelines to facilitate effective functioning of development structures at community and local government levels.

An implementation plan which focuses on the popularisation of the guidelines has alsobeen agreed.

A team has been appointed to coordinate implementation of the guidelines, and toconsider questions around the funding of local development structures, as well ascompiling a database of such structures.

National development agency

Following agreement on the terms of reference by the Nedlac Executive Council inNovember 1995, Cabinet appointed an advisory committee charged with investigating andadvising government on the means for providing future support to organs of civil society.

The advisory committee comprised members of civil society with expertise in business,labour, development, development finance and policy formulation. It was briefed to adviseon the following:

• The appropriate and functional relationships that could evolve between government and organs of civil society with respect to the provision of capacity for the implementation of the reconstruction and development programme.
• The feasibility of an appropriate funding mechanism that would enable a coordinated approach to the funding of civil society organisations and the relationship of such a mechanism with current development funders and other transitional mechanisms.
• A mechanism to promote a sustainable partnership between these organisations and government.

The advisory committee, chaired by the Deputy Minister of Trade and Industry, MsPhumzile Mlambo-Ngcuka, provided regular progress reports to the Development Chamber. Thefinal report was tabled in February 1997.

Nedlac subsequently reached an in-principle agreement to support the establishment of anational development agency. The Development Chamber will receive and consider reports onthe progress of establishing the agency.

National investment promotion agency

Subsequent to an agreement in Nedlac in August 1995, the Department of Trade andIndustry has established a national investment promotion agency, Investment South Africa,as a section 21 company. The key functions of the new agency are to promote South Africaas a destination that will attract foreign direct investment and to provide normalinvestor facilitation services to new investors. The agency will be focusing on threeareas initially:

• Coordination of investment promotion activities at a national level.
• Establishment of a database.
• Establishment of an investor resource centre.

Export finance guarantee scheme

Following an investigation under the auspices of the Japanese Grant Fund intopre-shipment export financing, Nedlac agreed in February 1995 that a new export financeguarantee scheme for small and medium-sized enterprises and first-time exporters should beintroduced. The new scheme was implemented in November 1996. The provisions of the schemeallow exporters to approach participating banks to seek loans for their export orderswhich are guaranteed by the Credit Guarantee Insurance Corporation, which is administeringthe scheme on behalf of the Department of Trade and Industry.

Restructuring of state assets

The national framework agreement between government and labour on the restructuring ofstate assets was tabled in Nedlac for noting. The Minister of Public Enterprises providedan update on progress with restructuring to the February 1997 Executive Council. Thisbriefing outlined the position with regard to the state-owned enterprises which were at anadvanced stage of being restructured.

Following the briefing, it has been decided that the issue would be removed from theagenda of Nedlac's Management Committee, but that any party was free to raise it again atany time.