regulations Archives - Business Directory

DOL visiting local Businesses

DOL visiting local Businesses
Many local businesses have been visited by the Department of Labour (DOL) inspectors recently.A company reaches out to you to inform you of their poster sales for the Basic Conditions of Employment and Occupational Health and Safety Acts. You buy the set because you want to display the poster as prescribed. Then the Department of Labour arrives a few weeks later to examine your personnel documents, a week or so later an inspector from DOL comes and checks the safety conditions in your office.

Employers with less than 20 employees are exempt, according to the OHS Act. Sorry, but you have to follow all the regulations. DOL has doubts about the Certificate of Good Standing issued by the Occupational Commissioner and will, therefore, audit all companies, big or small.

The targeting of small and medium enterprises by DOL might be a coincidence, you decide. DOL’s approach puts more pressure on small businesses. According to DOL, employers are required to keep shop-purchased dish soap in a well-ventilated closet and you are prohibited from providing your staff with chairs without armrests. Comments like these make you ask yourself, “Why am I running my business?

Are there any resources available to help small and medium-sized enterprises? Can DOL award grants to assist all small and medium-sized enterprises in complying with its rules and regulations?

MCCI has always urged its members to comply with any regulations that apply to our businesses. If starting and running a business was made easier, there would be a significant increase in SMME growth and employment.

Another legal victory for Chambers

Another legal victory for Chambers

Municipal electricity price hikes were ‘unlawfully calculated’, says court.

When chamber members work together, business wins. The Pietermaritzburg and Midlands Chamber of Business and the Nelson Mandela Bay Business Chamber took the National Energy Regulator of South Africa (NERSA) to court and won. Eskom supported the chambers’ application.

The Gauteng High Court has found that the NERSA used unlawful methodology in calculating annual electricity price increases for municipalities. It declared its guidelines and benchmarking methodology unconstitutional and gave NERSA one year to change this.

Chambers said that municipalities use electricity tariffs to pass their inefficiency costs to their consumers. They used the electricity income to pay for their management failures, including lack of infrastructure maintenance and rampant electricity and cable theft, to consumers. NERSA has not required municipalities to demonstrate the relationship between their actual costs, the tariffs they have applied for, or the benchmark tariffs.

In her order, Judge Elizabeth Kubushi also said that NERSA does not use the municipalities’ financial information to assess proposed rates for compliance with the law. Instead, it uses a sample of these forms to calculate an average rate of increase.

Steve Tshwete Municipality is one of the few that has calculated its electricity tariffs with integrity. The Middelburg Chamber of Commerce and Industry thanks STLM for doing so. Other towns have not been so lucky, and their businesses have been hurt by the poor financial management of their municipalities. Members interested in the full judgement can contact Anna-Marth Ott at ceo@middelburginfo.com

Export Awareness Seminar

Export Awareness Seminar
The Department of Trade, Industry and Competition (DTIC), in collaboration with the Mpumalanga Economic Growth Agency (MEGA) and the Mpumalanga Department of Economic Development and Tourism (DEDT), hosted its annual export awareness seminar in Middelburg on 16 September 2022.

MEGA presented the current projects they are working on and invited the business community to contact them to participate. The Department of Science and Technology explained how they can offer tax incentives to research and development companies. Another exciting offering from the Department of Small Business Development is the SheTrade ZA Hub, where women who want to export their products can get support.

DTIC has the EMIA Export Incentive Programme for export development, which provides marketing opportunities for businesses. This incentive helps with partial travel and exhibition costs subsidies if you want to exhibit at international trade fairs.

Let us say you already export South African products and need a non-preferential certificate of origin (COO). In this case, the Middelburg Chamber offers this service to local companies. With a COO, you have access to World Trade Organisation customs regulations between countries.

For more information on all export assistance, businesses can contact MEGA at azwi@mega.gov.za. For questions and requirements at COO, you can contact Christo Stemmet at admin@middelburginfo.com.

Comment on 14 June 2022 Municipal Strike

Comment on 14 June 2022 Municipal Strike

The lack of service delivery by Steve Tshwete Municipality is intolerable. Many of the services provided have not been adequately delivered since 25 March 2020, when the norm was to work (or not work) from home. Covid19 Lockdown has broken the municipality and created a culture of poor work performance.

The STLM leadership has given the strikers the power to ruin our town by giving in to their demands. Essential and vital services to the business community are not being provided. The current situation cannot be allowed to continue. Ignoring the complaints and demands of the businesses does not mean that the problems will miraculously disappear; no, the situation will worsen. The state of affairs creates an ideal environment for corruption and bribes. Also, why are the strikers allowed to use municipal vehicles as transport for the strike?

MCCI is asking the business community: are you satisfied? Will the problems be miraculously fixed once STLM is working again? Nowhere in business will a problem disappear if you ignore it, you have to work on the problem to solve it. Your silence means you agree with the municipalities decisions and lack of service. Significant future investments and developments are being hampered by the political gamesmanship of our STLM leadership and councillors.

Perhaps we should look at what STLM services can be outsourced to make the economy work? MCCI will ask the various political parties to meet with the Executive Committee to find a solution to make our city fully functional and attractive for investment.

Review of the Electricity Regulatory Act and related Electricity Pricing Policy.

Review of the Electricity Regulatory Act and related Electricity Pricing Policy.

The Casting, Forging, and Machining Cluster (CFMC) is concerned that industrial users are burdened by municipal tariffs. The EPP promulgated in 2008 is largely ignored and is not seen as a policy directive but rather as a rough guide. The EPP has little relevance in the current process of setting municipal tariffs.

In many municipalities, these tariffs are poorly structured, not cost-reflective, and contain illegal and unrelated subsidies that lead to unjustified increases in production costs. Individual producers are unable to offset these costs through productivity increases alone. These unjustified increases in municipal and industrial tariffs and poor security of supply have led to an increasing loss of competitiveness of South African companies in the global market.

The current structures and pricing processes tax producers upfront for a small profit and serve to destroy the economy. The review document offers little, although the changes are exciting. CFMC believes that local governments need to be encouraged to follow the law and related guidelines. Enforcement of the guidelines is problematic. CFMC cautions that the ideals of a fair and equitable process will be further limited if deviation and non-compliance are allowed. Market corrections in the ESI will not necessarily benefit the industry. There is a risk that free-market outcomes will be compromised. The CFMC is concerned about the lack of controls on municipal electricity bills, which largely offset inefficiencies. And regardless, we do not have sufficient knowledge and information to have a constructive discussion on cost structures, cost drivers and unbundling.

Load curtailment is a valuable tool to encourage industrial users to reduce their load in times of need. CFMC is keen to work with municipalities to facilitate introducing such a programme in industrial areas.

In the past, Steve Tshwete Municipality has provided good support and acceptable (within the legislative framework) tariff increases to industrial areas. Security of supply remains a concern in light of the recent municipal strike and continuous vandalism of municipal infrastructure. The debate between the stakeholders must be held soon; our town needs its industries to remain economically viable.

A copy of the full submission is available to members at the MCCI secretariat; please contact us at info@middelburginfo.com.

What changes to STLM infrastructure/services are required for your business in the next five years?

What changes to STLM infrastructure/services are required for your business in the next five years?

The Middelburg Chamber of Commerce and Industry has requested the Steve Tshwete Local Municipality (STLM) to meet with businesses regarding input in the new Integrated Development Plan (IDP) for 2022 2027, which is being developed. This is in line with the Municipal Systems Act, Chapter 5, which requires municipalities to develop a new 5-year plan directly linked to the term of office of municipal councillors.

The Municipal Systems Act (2000) requires municipalities to prepare a 5-year Integrated Development Plan (IDP) that integrates planning and implementation and provides a framework for all development activities in the municipal area.

Contributions to the IDP have been sought at recent district committee meetings. Most attendees are local residents and are focused on their immediate needs, such as methods of speed calming on a busy residential street. Any business person who has attended scheduled Ward Committee meetings will have noted that the focus is not on a business-friendly agenda. What are general business needs in the CBD compared to the needs of the various other municipality areas where our businesses operate?

The STLM Local Economic Development Forum will hold the IDP meeting with business stakeholders on 5 April 2022 at 09:00 at the STLM Council Chamber.

We strongly encourage business owners to attend the above meeting to table any infrastructure or service delivery issues affecting your business. Is your business regularly affected by flooding due to inadequate stormwater drainage? Please attend and raise the issue. Or, if your business’ water supply is an issue, this is the best platform to get STLM to take note of business concerns. You know when there are municipal issues affecting your business. Still, if the issues are not included in the STLM’s communication structure, they seem to be off the table.

In light of recent events, the business community needs to pressure STLM officials and councillors to deliver on their promises.

Be Warned: Change in Property Valuation

Be Warned: Change in Property Valuation
Members of the Middelburg Chamber of Commerce and Industry met with Mr Phumlane Mkhize, Director of Property Valuation, of the Steve Tshwete Municipal on Monday, 17 January 2022. The meeting was chaired by Mr Gerrit van der Merwe, Executive Member: Real Estate.

Mkhize told members that the STLM property valuation system for commercial properties will be changed and introduced in July 2023. The property valuations will be completed by June 2022 to facilitate future implementation. The purpose of the meeting was to inform property owners why the valuation system is changing and how the calculations will be done.

The law on the valuation of property values was amended in 2004. The Act has allowed access to the financial data of your business to determine its value:

(1) A municipal assessor or deputy municipal assessor may.
(a) require the owner, tenant or occupier of a property which the valuer must value in terms of this Act, or the agent of the owner, to give the valuer access to any document or information in possession of the owner, tenant, occupier or agent which the valuer reasonably requires for the purpose of valuing the propertyWhat does the above mean? The STLM valuer may request your profit and loss account and then review your finances considering rental income and occupancy percentage. The complete profit and loss account or balance sheet will not be considered, only maintenance and expenses directly related to the upkeep of the property. When valuing the property, capital repayments, interest, and other expenses that are not directly related to the upkeep of the property are not considered.It is not uncommon for property valuations in STLM to be well below market values. Depending on the classification of the property, a fraction of the property’s market value is used in the classification of the property. For example, a property currently valued at R13 000 000 and subject to a municipal tax rate of 0.0333 will be taxed at R432 900 per annum or R36 075 per month. If the value is increased to R20 000 000, the monthly tax payable increases to R55 500, which has a drastic effect on input costs. Values are calculated using a market capitalisation rate based on income for commercial rental properties. For owner-occupied commercial buildings, the valuation is based on the average market value of comparable buildings in the same area. Residential properties are valued on the same basis, whereby the property value correlates with the market value, which depends strongly on the designated area.

Although the blanket approach aligns with aligns and common practice, it has provoked strong reactions. For example, a landlord rents out a building for R345 per square metre, while his neighbour’s comparable building can only be rented out for R55 per square metre. This will undoubtedly affect the average rent per square metre used for valuations. If you feel that your property has been assessed inappropriately, you can appeal the value, but not the municipal tax rate, as STLM Council and COGTA make this decision.

Every business has its environment that determines the sustainability of each individual business, tenant and property owner.

The pandemic has highlighted how vulnerable businesses are to environmental changes and input costs. Rent, a substantial cost for most businesses, has come under severe pressure since the pandemic.

Members requested that MCCI appoint a sub-committee to find a solution to ensure that the process is beneficial to both the municipality and businesses. Members interested in participating in the subcommittee, don’t hesitate to contact Anna-Marth Ott at ceo@middelburginfo.com.

STRIKES CAN BE RENDERED UNNECESSARY

STRIKES CAN BE RENDERED UNNECESSARY
Strikes in South Africa are as ‘natural’ as warm weather, says Ivan Israelstam, Labour Law Management Consulting CEO. On the other hand, strikes have become rarer in recent years, as unions shy away from weakening the employer and the associated dismissals.

For decades we have been trapped in a fatal vicious circle. In other words, workers do not earn enough to feed their families, and they go on strike to demand a wage increase and better working conditions. If the strike lasts long enough, the company gives in and a wage increase well above what was budgeted. This reduces profits and, in rare cases, leads to financial losses. The company then compensates by making job cuts to reduce wage expenses. As a result of the job losses, the purchasing power of the public falls, and companies suffer losses. Companies then cut costs by reducing wage increases or spending on working conditions. Workers retaliate with strikes, and the vicious circle continues.

This increasingly deadly cycle is deadlier than Covid, more toxic than state capture and more devastating than power cuts. We have now been living under the new political order for 27 years, and there is no sign of anyone in positions of power making any real effort to stop the vicious cycle, the toxic industrial relations and the cancerous damage to our economy.

For their own sake and the development of the South African people, the so-called government leaders in business and the unions must take the blinkers of their eyes and stop this deadly spiral. If these so-called leaders refuse to take up their responsibilities, civil society must intervene.

The new labour-economic system must eliminate the opposing ideologies of socialism and capitalism. The doctrines of socialism that seek the nationalisation of enterprises and strangle the economy must be abandoned in favour of the unmistakably positive socialist principle of fairness for all. Similarly, the exploitative principles of capitalism must be replaced with truly inclusive free-market ideals.

This approach mixes the benefits of the free market (the ability to make money) with the benefits of socialism (i.e. fairness for all). By combining the positive aspects of socialism and capitalism, the struggle between the two ideologies is settled, and a new, everyday philosophy, shareism, emerges. Entrepreneurs and workers will no longer compete for money because they will work together to create and share it. For more debates on labour rights issues, see www.labourlawadvice.co.za.

There is no Just in Just Transition.

There is no Just in Just Transition.
On Tuesday, 30 November 2021, TIPS held a public debate on the key priorities and challenges for a Just Transition in the Emalahleni and Steve Tshwete areas. A statement was made and supported by many that there is no “Just” in the government’s Just Transition programme (JET) for citizens affected.

The JET Programme has been discussed for many years, first at the national level, then at the district level and more recently at the local level. Many consultants have been active in the area, collecting data, and some have even implemented programmes. Although it is still early, it seems that communities, from municipal officials to labour union representatives, are unhappy about what JET might mean for their future.

What projects have been approved, who is funding these projects, and the key outcomes that each project aims to achieve. The community has participated in many projects, skills training, entrepreneurship training and so on, but if there is no prospect of earning, the skills become obsolete. We do not want to be seen as charity recipients who have to be given a dummy to keep us quiet.

MCCI urges all stakeholders to create sustainable projects that provide secure jobs for participants. What market do they want to create with the new technology, or is the project only viable with continued financial support? There should be an open database of available information to prevent collusion, and the plans need to be available on the ground. How many of the recently launched projects have been successful?

The consultants and academics and the companies outside the Highveld region of Mpumalanga see us as needing help, even though they make their millions from local business opportunities. MCCI believes that the skills and talent are there, and we have a vested interest in making JET sustainable and successful. May the ghosts in the ghost town that “they” predict remain in their imagination. MCCI is continually committed to sustainable programmes to support and grow our economy. If you are interested in more information, please contact Mmabatho at info@middelburginfo.com