SA1st campaign

The objective of the SA1st campaign is to encourage South Africans to emulate the work ethic, patriotism and dedication that underpin the success of economies such as Japan, India and China.

These values are not strange to South Africans, as they drove the growth of the South African economy.

But in recent times, we seem to have lost our national focus. As a consequence, we currently suffer low levels of economic performance and declining levels of global competitiveness.

SA1st is not a marketing campaign but a driver for behavioural change, national focus and improved productivity and competitiveness. It is a call on employers and employees to be more constructive in their labour relations and to work jointly to optimise their drive toward greater productivity. This will have the consequence of enterprise growth, which in turn will lead to employment growth, greater economic activity and greater levels of national competitiveness.

The SA1st campaign was jointed launched by the South African Chamber of Commerce and Industry (SACCI) and Telkom, and hosted in Sandton at the offices of Bowman Gilfillan Attorneys.

During her presentation, Brenda Kali, Group Communications executive at Telkom, said that the campaign was a call to business to build a stronger work ethic in enterprise.

She went on to say that the campaign gave the opportunity for business to rise to the challenge put forth by the campaign that has the full support of Telkom.

Telkom has a long history and is a vital part of South Africa’s fabric and a catalyst for economic growth.

The values promoted by the campaign are essential to crystalise South Africa’s full potential. These are global, human and African values – “We need to rediscover them,” said Kali.

She stated that it was necessary to readdress inequalities, but linking work to reward is the challenge to addressing unemployment and poverty. A collective social focus on performance will make the difference between being mediocre or great; by changing behaviour, we can change the shape of our destiny.

Address by Minister of Public Enterprises (DPE) Barbara Hogan

“I congratulate SACCI on the launch of the SA1st initiative. The values and objectives of the initiative are indeed commendable.It is the hard work and innovation of organisations like yourselves which will help to propel us forward as a country – economically and socially.

As a department, we are busy with the task of ensuring that state-owned enterprises (SOEs) catalyse the growth and development of our economy – to ensure that the State’s shareholdings in these enterprises are financially sustainable and deliver on the government’s strategic objectives.

The SOEs with the DPE portfolio are: Alexkor, Broadband Infraco, Denel, Eskom, the Pebble Bed Modular Reactor project, South African Airways, SA Express Airways, SA Forestry Company Limited and Transnet.

SOEs are powerful instruments for achieving developmental goals, with the task of achieving strategic national economic objectives; they drive investment in economic infrastructure and in intermediate and advanced manufacturing capabilities.

Today, I will discuss only two of these SOEs – Transnet and Eskom – two of our largest enterprises that have embarked on unprecedented infrastructure investment programmes in the past few years with tangible effects for other economic sectors and communities.

Between 1976 and 1994, investment by the public sector in infrastructure decreased from 16% to 5% of gross domestic product, and remained the same until 2004 when Eskom and Transnet announced the first large investment programmes.

Under-investment in infrastructure was a constraint on growth for users as well as for suppliers. The challenge for the department is to fund a build programme that rehabilitates key infrastructure and revitalises supply industries needed to build the programme through the Competitive Supplier Development Programme (CSDP).

Aligning skills for the infrastructure investment programmes will create economic growth, employment and poverty alleviation.

Eskom and Transnet maintain credible institutions to address their own skills needs and those required by the supplier network. Training of unemployed youth is a feature to place them full-time within SOEs or relevant supplies.

The investment programmes are well under way and we have begun to see tangible progress:

Eskom’s strategic mandate is focused on the provision of electricity through generation, transmission and distribution. This includes reliable supply and adequate future supply in support of economic and developmental objectives.

Eskom has spent over R150 billion in capital investment in the past five years and is projected to spend over R350bn between 2010/11 and 2014/15.

Eskom’s procurement processes promote the government’s localisation, empowerment skills, employment and industry development policies. Each programme impacts local towns through local spending and investment.

Procurement targets have at least 50% local content in new-build contracts, and in all major builds exceed this figure.

Medupi, Kusile and Ingula power stations, which form a large bulk of Eskom investment spend, are projected to create about 40 000 direct and indirect jobs and to impact about 160 000 people.

Over a billion rand of investment in plant has already been leveraged by Eskom in its manufacturing supply chain, benefiting local businesses and addressing South Africa’s industrialisation agenda.

Transnet’s capital expenditure for 2009/10 amounted to R18.4bn (excluding capitlised borrowing costs), a decrease of 4.7% compared to the previous year.

This decrease can be attributed mainly to reprioritisation of capital projects due to the impact of the recession on volumes and capacity requirements.

Transnet’s mandate is to assist in lowering the cost of doing business in South Africa, enabling economic growth and security of supply through appropriate ports, rail and pipeline infrastructure and operations in a cost-effective and efficient manner within acceptable benchmark standards.

Transnet plans to invest over R90bn in capital assets over the next five years. In the five years to 2009/10, about R72bn was spent on capex.

Despite the economic downturn, Transnet remains committed to investing in infrastructure in order to provide capacity ahead of demand.

An economic impact study by the department shows that Transnet’s investment programme will have a significant impact on some provinces, particularly the Northern Cape (through which the iron-ore line runs); KwaZulu-Natal, which has the busiest port in the country; Mpumalanga, through which a major portion of the coal line runs; as well as the Eastern Cape.

Transnet will have created about 586 000 jobs in skilled, semi-skilled and unskilled sectors in 2018.

In conclusion, I would like to thank SACCI for its commitment to South Africa through its initiatives to improve the conditions for doing business in South Africa. I would like to encourage you to continue engaging with us as government as we work to speed up the pace of our economic growth and development.

I wish you the best in the campaign as you collectively strive to improve the socio-economic conditions of our communities.”

Asian influence

His Excellency Toshiro Ozawa, ambassador of Japan in South Africa, presented a Japanese case study on “Building a competitive nation through capacity building”.

The Japanese are known for their work ethic and high productivity and, as many would know, Japan was able to reconstruct itself after the devastation of World War 2 through the economic miracle of the 1950s and 1960s.

The ambassador noted that even though values do change over time, and that today Japan’s labour productivity is not among the highest in the world, a historic perspective may be able to stimulate some thinking that could be for the benefit of South Africans.

He went on to state that according to Japanese multinationals operating in South Africa, it was noted that local factories lag far behind similar factories in other developing countries such as Indonesia and Tunisia, in terms of efficiency and yield.

South Africa does not lack technology – what is missing is operational efficiency on the shop floor.

Ambassador Ozawa’s view about what was required to remedy the situation was for the government, companies and employees to work patiently together to create a culture of a good work ethic, which would lead to continuous improvement and which nurtures flexibility to adjust to change.

He touched on Confucianism, which was originally practised by the warrior class in Japan and eventually became compulsory reading for all children in the 20th century. In modern Japan, gender equality and care for the weak and handicapped have become important values.

Confucianism is no longer popular, but some of its basic values for hard work and diligence linger on.

Latest news

International Chamber of Commerce and ICC South Africa launch INCOTERMS ®2010 Rules for Trade

The Paris-based International Chamber of Commerce (ICC) and ICC South Africa are pleased to announce the launch of INCOTERMS ®2010 Rules for Trade on 17 September 2010, in conjunction with Standard Bank of South Africa.

The latest version INCOTERMS ®2010 Rules will come into effect on 1 January 2011. The long-awaited revision of INCOTERMS 2000 Rules, two and a half years in preparation – this being the first revision in 10 years – contains many changes to rules that apply to billions of dollars of international trade each year.

As the guardian and originator of the INCOTERMS ®2010 Rules, the ICC and ICC South Africa have a responsibility to not only ensure that the new rules are relevant and up to date, but also that users are given the best instruction in how to take account of these changes in their contracts.

INCOTERMS ®2010 Rules or International Commercial Terms are a series of international sales terms, published by the ICC and widely used in international commercial transactions.

They are used to divide transaction costs and responsibilities between buyer and seller, and reflect state-of-the-art transportation practices.

They closely correspond to the United Nations Convention on Contracts for the International Sale of Goods.

The first version was introduced in 1936, to the latest revision being INCOTERMS ®2010 Rules.

Since the last revision in 2000, much has changed in global trade. Cargo security is now at the forefront of transportation. In addition, the United States Uniform Commercial Code was revised in 2004, resulting in a deletion of US shipment and delivery terms. The latest version of the INCOTERMS ®2010 Rules will reflect these changes.

The latest terms were revised by a drafting committee comprising representatives from seven countries who met nine times since mid-2008. The three drafts they produced were presented to ICC national committees for their comments, which were reviewed and incorporated into a final text.

The ICC International Court of Arbitration has received 14 000 cases since its inception in 1923. Arbitration is a method of dispute resolution relating to international contracts of sale. A well-prepared clause on arbitration provides a basis to duly conduct arbitration in case of litigation.

Over the past decade, the Court’s workload has expanded considerably and many of the cases received have been as a result of the trading community not understanding the importance of creating a contract of sale that looks after the interest of both the seller and the buyer in every international trade deal.

Additionally, the misuse of the INCOTERMS ®2010 Rules could result in huge financial losses for both parties, being the seller and the buyer.

A case in point is an international mining conglomerate that lost a few million US dollars when selling platinum to a Japanese bank in Tokyo. The contract of sale stated “CFR Zurich, Switzerland” as per INCOTERMS 2000, while the transport contract stated “Tokyo, Japan”.

At the time of drawing up the contract of sale, the accountant, thinking incorrectly that INCOTERMS dealt with ownership and had nothing to do with the logistics or movement of goods from the seller to that of the buyer, quoted the wrong INCOTERM by stating “CFR Zurich, Switzerland” because the funds were being transferred from Switzerland. The movement of goods was to Tokyo.

Upon arrival of the platinum in Tokyo, the platinum was stolen. The mining organisation instructed the buyer to claim against its insurance policy, as it was not the fundamental obligation of the seller to procure insurance when selling CFR.

When the buyer endeavoured to claim against its policy, the insurance company stated that the seller was still responsible for the goods, as the seller had not filled its fundamental obligation in accordance with the contract of sale, in that the platinum had not been delivered to Zurich.

The buyer was exonerated of any wrongdoing and the risk was placed in the hands of the seller. As a result of using the INCOTERMS incorrectly, the seller lost US$32 million.

The Court’s membership has grown and now covers 86 countries. With representatives in North America, Latin and Central America, Africa and the Middle East and Asia, the ICC Court has significantly increased its training activities on all continents and in all major languages used in international trade.

All these countries have adopted the INCOTERMS 2000 and include these terms when drawing up international contracts of sale, South African being one of them.

The ICC is the largest, most representative business organisation in the world. It comprises many member companies in over 130 countries and has interests spanning every sector of private enterprise.

This non-political, non-governmental organisation was founded in 1919 to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. It is represented in South Africa by ICC South Africa, based in Rosebank, Johannesburg.

A world network of national committees keeps the ICC International Secretariat in Paris informed about national and regional business priorities. More than 2 000 experts drawn from the ICC’s member companies feed their knowledge and experience into crafting the ICC stance on specific business issues.

The ICC has permanent observer status with the UN. The UN, the World Trade Organization, and many other intergovernmental bodies – both international and regional – are kept in touch with the views of international business through the ICC.

Training organisations wishing to train on the INCOTERMS ®2010 Rules for trade have to be accredited by the ICC South Africa, and use only ICC materials for their training. The unit standards are currently being adapted to include INCOTERMS ® 2010.

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Economic benefits of reducing software piracy are compounded by the quick pace of progress

Reducing South Africa’s piracy rate by 10 percentage points in two years instead of four would boost the economic impact by as much as 34%.

Reducing software piracy creates a ripple effect throughout the economy, generating new spending on related information technology (IT) services and distribution.

That spending, in turn, creates jobs and delivers new tax revenues — and the faster the reduction in software piracy, the greater the returns.

These are among the findings of a new study produced by the Business Software Alliance (BSA) and the Industrial Development Corporation (IDC), the leading global IT market research and forecasting firm that documents the impact of reducing PC software piracy rates by 10 percentage points in 42 countries.

“The Economic Benefits of Reducing Software Piracy” study finds that reducing the 35% PC software piracy rate in South Africa by 10 percentage points over four years would create 1 650 high-tech jobs, R9.091m ($1.244m) in new economic activity, and R967m ($132m) in new taxes by 2013, with 68% of those benefits expected to remain in the local economy.

In addition, the study finds that the benefits are compounded by reducing software theft at a faster rate: If South Africa were to reduce piracy by 10 points over the next two years instead of four, it would boost the economic activity and tax gains by 34%.

“Reducing software piracy is an opportunity to inject much-needed stimulus into the economy,” said Marc Ashwell, vice chairperson for the BSA in South Africa.

“Because selling, servicing and supporting software creates demand for related distribution and services, the impact of software piracy reaches beyond software publishers, starving local distributors and service providers of spending that creates jobs and generates more tax revenues, boosting the local economy.

“This study shows that the entire economy can benefit from lowering software piracy in South Africa as proactively and as quickly as possible,” Ashwell added.

“A real catalyst to the current piracy scenario could come from our corporate and government IT departments.

“They hold the key to implementing successful and effective software asset management programmes that not only have an impact on the level and extent legitimate use of software, but encourage a morally appropriate protection of the vendor’s intellectual property.”

BSA recommends the following actions to effectively reduce software theft around the world:

• Promote education about the value of intellectual property (IP) and the business practice of managing and optimising software assets through software asset management (SAM);

• Implement the World Intellectual Property Organization’s Copyright Treaty to create an effective legislative environment for copyright protection, both online and offline;

•Create strong and workable IP enforcement mechanisms, as required by the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights Agreement, including providing for vigorous enforcement of misappropriation and infringement of new software innovations such as cloud computing technologies;

•Dedicate resources for enforcement of IP laws, including specialised IP enforcement units, and improved cross-border co-operation among law enforcement agencies; and

• Commit the government to legal software use through active SAM policies and promote legal software use by all government agencies, SOEs, contractors and suppliers.

“The Economic Benefits of Reducing Software Piracy” is based on the IDC’s Piracy Impact Model, which incorporates market research on IT spending and software piracy around the world, along with information on IT employment and IT-related taxes.

Globally, the data shows that reducing software piracy by 10 points over the next four years would produce $142bn in new economic activity in the 42 countries studied, with more than 80% accruing to local industries.

The reduction would further create nearly 500 000 high-tech jobs and generate roughly $32bn in new tax revenues worldwide.

Front-loading the gain by reducing piracy 10 points in two years compounds the economic benefits by 36%, producing $193bn in new economic activity and generating $43bn in new tax revenues by 2013.

For more information and a full description of the methodology, view the full report at www.bsa.org/piracyimpact.

APSO: Driving professionalism within the labour recruitment industry

The changing face of the world economy and ever increasing exposure to global trends have created wide-ranging opportunities on which the recruitment industry can capitalise.

The Association of Personnel Service Organisations (APSO) is well positioned to guide its members through the process of change to ensure compliance and success, and to ensure that the industry as a whole is positioned for a new era of professionalism.

The rapid advance of technology and the increasing accessibility of online advertising, via job portals and free tools such as social media, are having a direct impact on the recruitment methods employed by recruiters and their clients alike.

APSO is dedicated to providing high-quality training that empowers its members and ensures their recruiters are equipped to offer professional, specialised recruitment services to their clients and candidates.

Challenges on the legal and political front have dominated the press over the past few years, most notably the ongoing calls for the banning of labour brokers.

APSO, as a member of the International Federation of Employment Associations, is committed to ensuring the longevity of the industry, given the global need for flexibility within the new world of work. It promotes the concept of “flexicurity” and recognises the need to achieve the principles of Decent Work, thereby balancing the employers’ need to remain competitive and the employees’ needs for work conditions that meet the high standards espoused by the International Labour Organization (ILO).

To this end, APSO is a committed member of the Confederation of Associations in the Private Employment Sector (CAPES), and participates in the various lobbying forums available to promote the tenets of Decent Work.

Nearly 80% of the APSO membership base is small and medium enterprises, and as a result, APSO works hard to give small business a voice to make a difference within the industry.

APSO, through funding provided by the National Skills Authority, will run a series of road shows over the course of the next six months to educate and empower its members, particularly those operating in smaller regions of the country. The road shows will cover three distinct topics: Lobbying & Advocacy, Decent Work, and Skills Development.

The recruitment industry is uniquely placed to drive skills development in the country, as proven by the statistics showing that this industry has facilitated the most learnerships – as a single industry – since the inception of the National Skills Development Strategy.

APSO works closely with the Department of Labour. It looks forward to formalising a public-private partnership that will ensure the public employment services and the private sector work together to achieve the common goal of reducing unemployment in South Africa.

Furthermore, the temporary employment services (TES) industry has the opportunity to drive Decent Work and initiatives, such as the creation of the CAPES industry provident fund specifically catering for the transient nature of temporary employment, which is tangible evidence of the commitment of the TES industry to the ILO programme.

Each of the mentioned areas is vital in supporting Decent Work, employment and global initiatives, and APSO seeks to ensure its members are provided with the right information and the tools to apply this information and practise within their business – for the betterment of their business, the industry and the country as a whole.

In the quest for recognition as a profession, APSO is working together with the Services Sector Education and Training Authority and other associations to develop industry-specific qualifications, register professional designations and to promote the concept of continuous professional development.

For this purpose, the Employment Services Certification Institute has been established. It is envisaged that compulsory registration of individual practitioners will be part of the regulatory framework for the industry.

Currently, APSO requires its members’ staff to write the APSO Entrance Exam, a 10-module induction programme, to ensure they have sufficient knowledge to practise in accordance with the law and the APSO Code of Ethical & Professional Practice.

APSO membership is based on recruitment companies meeting specific criteria, including legal and operational compliance.

While all appropriate registrations must be met by the prospective member, adherence to the APSO Code of Ethical & Professional Practice is required before membership can be granted. The Code seeks to provide guidance to members, clients and candidates to ensure minimum standards are adhered to.

The Code has been vetted by the Institute of Ethics South Africa, of which APSO is a member, and is aligned to worldwide recruitment associations to ensure global best practice.

Clients and candidates who make use of an APSO member have the additional peace of mind in that they have access to free recourse via the Ethics Committee, should they experience problems with the member agency.

For more information about APSO, visit www.apso.co.za.

Middelburg Chamber participates in CLGF Good Practice Scheme, Leeds

The Middelburg Chamber of Commerce and Industry, through the Steve Tshwete Local Municipality, was invited to participate in a good practice scheme project with the Commonwealth Local Government Forums (CLGF). This project is jointly implemented through the South African Local
Government Association.

The municipalities – Steve Tshwete Local Municipality, eThekwini Municipality and the Leeds City Council – have formed a partnership for this project.

Anna-Marth Ott and Valerie Pienaar of the Middelburg Chamber recently had the opportunity to visit Leeds City Council in the United Kingdom.

The visit was specifically “Best Practice Guidance” as well as special focus on support for small, medium and micro enterprises (SMMEs) and courage to grow and to be sustainable.

Furthermore, to implement best practice in the Steve Tshwete municipal area and to work together in order to write a best practice guide on the above, which can be used by all.

This visit took place from 17 to 24 July 2010, with the set-out objectives to increase municipal support for SMMEs, increase the capacity of Steve Tshwete, increase sustainability, better relationships internally and externally, to create a sustainable partnership, and to increase local SMME knowledge on support services. A few of the projects that were visited: Suma co-op; Business Link West Yorkshire; Leeds Ahead; Meanwood Valley Urban Farm and Leeds City Credit Union.

Ott and Pienaar further had the opportunity to attend a Business of Sport event based on the 2012 Olympics as well as a construction supply chain seminar.

The remainder of the visit included activities regarding procurement efficiencies, procurement processes and schedules as well as opportunities for future growth and new technology.

The condensed programme ensured that much was learnt and knowledge was shared on how to increase the support around SMME growth in order to sustain themselves as well as the local economy.

Contact Pienaar if more information regarding the project visit is required.

Valerie Pienaar

Business Linkage Centre Officer

Tel: +27 (0) 13 243 2253

Mobile: +27 (0)71 680 0780

Fax: +27 (0) 13 243 1923 / 086 672 6928

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www.middelburginfo.com