Briefing: Portfolio Committee on Labour

The role of the Department of Trade and Industry

(the dti) in the permitting process

17 August 2011

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Trade and Investment South Africa

To facilitate the increase in the quality and quantum of Foreign and Domestic Direct Investment by providing an efficient and effective investment recruitment, problem solving and information service in order to retain and expand investment in South Africa and into Africa.

This is a one-stop shop initiative

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ObjectivesObjectives

• Investment recruitment, problem solving and providing information for local and foreign investors in order to attract, retain and expand investments in South Africa and into Africa.

• To increase the quality and quantum of foreign and domestic direct investment by identifying, packaging and promoting major investment project profiles in conjunction with our stakeholders in order to influence and speed up investors decision making process.

• Providing a facilitation and aftercare to service to new and existing investors in conjunction with stakeholders in order to retain and attract additional or new investments.

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Priority Sectors for FDI

• Metals

• Mining

• Biofuels

• Agribusiness

• Automotive

• Machine tooling

• Precision engineering

• Aerospace

• Film production

• Tourism

• Oil & Gas

• Boat Building

• ICT and electronics

• BPO (Business Processing & Outsourcing) and Call Centres

• Chemicals

• Plastics

• Bio-pharmaceuticals

• Leather and footwear

• Forest products

• Energy and Renewables

• Infrastructure Development

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TISATISA

Investment Investment PromotionPromotion

One Stop ShopOne Stop Shop

Investment Investment Climate & Climate &

Policy Policy AdvocacyAdvocacy

•IncentivesIncentives

Sector and Sector and Skills Skills

DevelopmentDevelopment

PromotionPromotion

•Image BuildingImage Building

•BrandingBranding

•Lead GenerationLead Generation

Investor Investor ServicingServicing

•Development Development Package preparation Package preparation

& delivery& delivery

•AftercareAftercare

ONE STOP SHOP

Policy Input

Investment Climate

Systematic Feedback

Aftercare

Investment facilitation

Detailed information

Investor interest

Image building

& branding

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Service OfferingsService Offerings

1. INVESTMENT RECRUITMENT– Promotion of investment opportunities – Marketing of investment projects – Guidance with plant/site locations – Industrial

Development Zones– Input into policy formulation – Packaged Investment projects

2. INVESTMENT INFORMATION– Information on the macro economy and various

investment opportunities within SA sectors and industries.

– Information on incentive packages– Information on regulatory and legal environment– Publications on cost of doing business and Investors

handbook – Information on housing , education, schooling, labour

market and recruitment firms. 6

3. FACILITATION– Facilitation of investment missions, including travel itineraries– Introduction of investors to key stakeholders in private and public

sectors – Introduction of investors to potential joint venture partners and black

economic partnerships– Facilitation of finance and incentives – Assistance with applications, company registration, EIA, etc– Recommendations: Immigration Act – Business & Corporate Permit

applications – Logistical support for relocation

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In terms of the Immigration Act the dti facilitates on behalf of companies investing in South Africa.

- Corporate work permit

- Intra -company transfer

- Own business permit

- Waiver letters in respect of R2.5 million requirement

the dti, does not support the employment of foreign labour if the skills required are available in South Africa.

Permits are also evaluated in terms of the IPAP and New Growth Path Priorities.

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•Multinationals require certain key personnel, normally in finance and managerial posts, to be filled by experienced personnel (already employed by the concern) which might be expatriate workers e.g. CEO of Ford and Tata - transfers from their global locations.

•There is also a disparity between the supply and demand (unstable) for skills e.g. Eskom Build Program (we have not built a power station for 20 years) the Telecom upgrade for Cell C and Vodacom to 4G requires specialised skills which are not available in South Africa.

•Foreign skills are needed to complete this project of national importance. The presence of foreign nationals in the labour market is therefore necessary and should be facilitated.

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•In the BPO sector which is an ASGISA and IPAP priority to create jobs , South Africa is becoming an attractive location for outsourcing with a foreign language component. The applications for foreign languages such as Dutch and German have led to additional English language work which is serviced by South Africans. thedti has been able to attract a major player such as Amazon who from a initial German requirement of 250 have added an additional 1000+ English language seats.

•the dti, encourages business to comply with labour and immigration legislation, we do not as a Department have any legal mandate to enforce compliance.

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• the dti, encourages business to comply with labour and immigration legislation, we do not as a Department have any legal mandate to enforce compliance.

•The presence of foreign nationals in the labour market is necessary due to skills shortages and should be facilitated.

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Statistics

Applications facilitated by TISA for the period January 2010 until July 2011

Total applications received 321

Recommended 224

Business Permits 77 (610 individuals)

Corporate Permits 147 (3510 individuals)

Not recommended (Business Permits 50 / Corporate Permits 47)

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Statistics from the Department of Home Affairs

2009/2010

Quota Work Permits: 225

General Work Permits: 1 486

Exceptional Skills Permits: 213

Intra-company Transfer Permits: 362

2010/2011

Quota Work Permits: 2 497

General Work Permits: 11 492

Exceptional Skills Permits: 1 193

Intra-company Transfer Permits: 3 590

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Process

Corporate Permit applications

Information to be provided: • Information re skills to be recruited

– Designation, number of permits required, skills, qualifications, period to be employed

• Company information • Information re current / future projects, tenders, etc• Steps taken to recruit locally• Training programmes Processing• Desk top research• Sector input, industry association, labour and SETAs • Skills for the economy• Interview• Site visit• Business case – sector, job creation, national priority • Previous permits

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Business Permit applications

• Capital waiver (R2,5 million) FDI (not what the actual cost is..)• ALL APPLICATIONS • Business plan – very detailed: competitors, market, financial projections • CV• CA letter • Funding • Sector

– NOT: Import based; consultancy; lap top tour operators; 2nd hand car industry

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Processing

• Verification – FER / PIPA – Registration / Legislation

• Job creation – Full time sustainable jobs

• Market saturation • Viability • New technology / innovation• Site visit

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Way forward

Mechanisms to Address Challenges

• the dti has proposed an interdepartmental task team at DDG level with DHA to fast track issues on permitting for investors

• the dti proposes that this task team be extended to include DOL as a TRIPARTITE task team to look at labour, permitting and fast tracking issues

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