SPECIAL ECONOMIC ZONES BILL, 2013

PRESENTATION TO PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY

11 JUNE 2013

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INTRODUCTION

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•Presentation to provide the dti’s response to matters raised following PPC deliberations on Special Economic Zones Bill

•Representatives from the dti

• Mr Tumelo Chipfupa (Deputy Director-General)

• Mr Kaya Ngqaka (Chief Director: Infrastructure Investment Support Unit)

• Mr Dumisani Sombinge (Director: Legal Services)

• Ms Janice Jonathan (Director: SEZ Stakeholder Management)

• Mr Jabulani Sithole (Deputy Director: SEZ Monitoring and Evaluation)

INTRODUCTION

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•Following the dti’s presentation before the PPC on 4 June 2013, PPC requested the dti to respond the following 5 issues:

• Appointment of standing alternates to Advisory Board

• Approach when applicant is province

• Further clarity on roles and responsibilities

• Further clarity on one stop shop

• Transitional arrangements

SEZ ADVISORY BOARD

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•the dti agrees that the term “Board” (which is defined as the Special Economic Zones Advisory Board established by section 7) be referred to as the “Advisory Board” in the Bill

•the dti agrees that Bill be amended to enable Minister to appoint alternate members for the members listed in clauses clauses 7(2)(a) to (h) and to stipulate that the alternate members are standing alternate members

APPLICANT IS PROVINCE

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•A proposal was made that Minister treat an application for designation by a province differently to other applicants because trade is a Schedule 4 function with concurrent national and provincial competence

•the dti is of the view that SEZs best regulated at national level and there is no basis to treat provinces differently from other applicants

•Bill does not seek to regulate or affect the legislative competence of a province to regulate trade

•Section 146 of Constitution will apply in the event of any conflict between national and provincial legislation

INCENTIVES FROM PROVINCES AND MUNICIPALITIES

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•A proposal was made that Bill must make provision to enable provinces and municipalities to provide their own incentives to SEZs

•the dti is of the view that while the Bill does not provide for support measures from provincial and municipal sphere, the Bill does not preclude provincial or municipal sphere developing incentives for SEZs

ROLES AND RELATIONSHIPS

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ROLES AND RELATIONSHIPS

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Designation

•Applicant (government or PPP) applies to Minister

•Applicant must meet stipulated criteria

•Minister, on recommendation of Advisory Board & after consultation with Minister of Finance:

• designates area as SEZ

• issues licence to applicant = licensee

ROLES AND RELATIONSHIPS

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SEZ entity and SEZ Board

•Licensee establishes SEZ entity (statutory body or company) & appoints SEZ Board of SEZ entity

•SEZ entity must be established as national or provincial business enterprise

•SEZ Board:

• governs and manages SEZ entity

• appoints SEZ operator

• on recommendation of operator, approves business seeking to locate in SEZ

ROLES AND RELATIONSHIPS

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SEZ operator

•Operator appointed by SEZ Board to develop operate and manage SEZ on behalf of SEZ Board

•Operator must obtain SEZ operator permit issued by Minister

•Operator recommends to SEZ Board whether to approve application by business to locate in SEZ

ROLES AND RELATIONSHIPS

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SEZ business

•SEZ Board decides whether business can locate in SEZ

•SEZ Board acts on recommendation of operator

•Business must:

• conduct prescribed business or render prescribed service

• comply with prescribed criteria

ONE STOP SHOP

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•Bill creates framework to establish one stop shop and obliges operator to facilitate one stop shop function for business seeking to locate in SEZ

•Details of one stop shop model cannot be prescribed in legislation

•Flexibility required to enable the dti to evaluate one stop shop mechanisms being applied and adapt model as circumstances and access to resources change

•Bill will provide that implementation protocols will be concluded with various organs of state to facilitate one stop shop processes

•Minister to report to Parliament annually on one stop shop

ONE STOP SHOP

OSS MODELS STUDIED

a) ONE DOOR SHOP All approvals bodies located at the SEZ site

b) ONLINE APPROVAL SYSTEM

Required authorisations completed, submitted and approved on-line

c) ONE WINDOW SHOPCommercial body appointed to liase between SEZ investors and government departments to streamline approvals processes

d) INTEGRATED REGISTRATION FUNCTION

Single form to lodge all applications for approvals

e)SEZ AND GOVERNMENT DEPARTMENT ACCOUNT MANAGERS

Each SEZ as well as various government departments and agencies relevant to SEZs appoint accounts managers dedicated to streamlining approvals processes

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ONE STOP SHOP

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The dti proposes the following models for the SEZ One Stop Shop

Short-Term: Option (e)SEZ and/or government department account managers act as initial point of contact or receipt for all applications for

investors wanting to locate in the SEZ or the surrounding area

Medium- to Long-Term: Option (b)(Online / electronic facility for completion of all relevant

applications for registration, licenses and permits processed online by relevant authorities)

PROPOSED ONE STOP SHOP MODEL

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•One Stop Shop at each SEZ administered by at least two dedicated OSS officers

•SEZ OSS office will house all the relevant application documentation

•OSS officers responsible for receiving applications and forwarding to account managers at various authorities

•SEZ account managers will be responsible for receiving and processing the applications from the SEZ OSS officers

•SEZ account managers will be senior managers with decision making capabilities

•SEZ OSS officers will follow up on the various applications made with the SEZ account managers

ONE STOP SHOP – Proposed Short Term Model Process for SA

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Investor communicates with

OSS officials for location on the

SEZ or surrounding area

OSS official provides the investor with

required application forms

for various permits

Investor concludes application forms

with required docs which are

submitted back to the OSS office

OSS officer receives the

application forms and sends them to

the relevant government authorities /

agencies

Dedicated account manager in that authority/agency

receives the application and processes them within prescribed

timeframes

Feedback is sent back to the SEZ

OSS officers who will liaise with the

investor

The Investor starts operations upon

receipt of approvals

OSS officials provides relevant

after care services to investor

TRANSITIONAL ARRANGEMENTS

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•Bill provides that designation in terms of IDZ Regulations will be regarded as designation in terms of SEZ Bill

•Bill will be amended to provide that operator permit issued in terms of IDZ Regulations will be regarded as operator permit in terms of SEZ Bill,

•Bill will be amended to provide that IDZ enterprise located in IDZ in terms of IDZ Regulations will be regarded a business approved to locate in SEZ

•Bill will be amended to provide that that existing IDZs must comply with SEZ framework created in Bill within 3 years of commencement, which period may be extended by Minister