IMMIGRATION BILL: PUBLIC HEARINGS
Home Affairs Portfolio Committee; Social Services Select Committee: Joint Meeting
17 March 2002
Back to Parliamentary Hearings on Immigration Bill or Immigration Policy
Co-Chairpersons: Ms L Jacobus (NCOP, ANC) and Mr D A
Mokoena (ANC)
Documents handed out:
Submission by Business South Africa
Submission by the British Chamber of Business in South Africa
(see Appendix 1)
Submission by the American Chamber of Commerce (see Appendix 2)
SUMMARY
The Committee heard submissions on the Immigration Bill from the
business sector. Key issues raised included the need for a
progressive migration policy that encouraged skills to be brought
into the country. To this end it was suggested that levies be
made as reasonable and clear as possible and the quota system be
done away with. It was also recommended that the Immigration
Board consist of at least four "experts" in the field
of business.
MINUTES
Mr Vic Esselaar, Mr Kobus Kleynhans, Mr Julian Pokroy and Ms
Yvonne Temba represented Business South Africa (BSA).
Business South Africa
Mr Esselaar stated that immigration was a topic that
"hardens hearts and softens brains" as there was an
assumption that a job given to a foreigner was one less job for a
South African. The immigration policies of other countries, such
as the United States and those in the European Union, showed
otherwise. Legal immigrants tended to have a positive effect on
the economy because not only were they consumers but also tended
to result in a net increase in jobs and growth. It was important
for South Africa to emphasise a progressive immigration regime to
attract skills into the country. Legal immigrants were not to be
seen as a threat, but rather as a competitive advantage.
Although foreign savings can top up domestic savings shortfalls,
the major source of funding for investment in South Africa was
the private corporate sector accounting for 98.6% of total net
capital in the period 1991-2000. Government has been of little
help because it has been dis-saving through the 1990's and in
effect destroying capital. The old Act, and the culture
surrounding it, was unconstitutional, inefficient and
philosophically antiquated. It was based on the old lager
mentality of drawing the wagons into a circle and not letting any
foreigners in.
Regarding the Bill itself, the licensing fee, provided for in
Clause 12, would have an effect on domestic and foreign
investment by making our effective tax rates even less
competitive. Allowing exemptions on clear and unequivocal terms
where the employer has a sensible program for training South
Africans will also help to neutralise the disincentive effect of
the fee. In addition the mining sector should be excluded from
the Bill. The greatest number of migrants in South Africa are to
be found in the mining sector. These were legal migrants who fall
under a formally organised system where there is no leakage or
danger. A fee could not only turn marginal mines into loss-making
entities but would also negatively affect our neighbours who are
dependent upon miner’s remittances.
Concerning the Immigration Advisory Board (Clause 28) BSA was
concerned about the lack of civil society representation on the
board and felt that four individuals with "expertise"
should be appointed.
The provisions of the Bill were defective in the lack for a
process for view of an arbitrary or unreasonable refusal by the
Department of Labour to issue a certificate.
BSA felt that Clause 37, regarding the deportation and detention
of illegal foreigners, should be amended to permit an officer to
arrest a foreigner if he had reasonable grounds: "if he has
reasonable grounds". This would limit the gross abuse of
human rights currently reported on foreigners and would be in
line with the Constitution.
Regarding employers, there was no need for a reversal of onus in
Clause 41(3) as it was unconstitutional. It was recommended that
whole of Clause 41(3) and (5) be deleted.
Please refer to the full submission attached hereto.
Discussion
Mr Waters (DP) asked the opinion of the delegation on offering
immigrants immediate permanent residence rather than a work
permit, which was viewed as less stable.
Mr Esselaar replied that BSA were not proposing that miners be
excluded from the permit system. There was currently a
well-regulated system in place and it was felt that this should
be left as it was without the miners having the additional burden
of paying a levy.
Ms Van Wyk (UDM) suggested that the provision of Clause 45 not be
scrapped altogether but rather have the offending actions
specifically listed.
Mr Esselaar responded that provision was already in place to
allow for immediate direct residence in exceptional cases. He
agreed that Clause 45 could be better worded to list specific
unlawful actions and exclude, for example, humanitarian
assistance from the scope of the Act.
An opposition Member questioned the safety of the country if
miners from Lesotho were allowed to flood into the country.
Mr Pretorius (NNP) referred to the potential problem of
overcrowded courts should provision have to be made for
Immigration courts.
Mr Esselaar acknowledged the potential problem but he did not
know if the process could be simplified given the Constitutional
obligation to provide foreigners with access to the courts.
British Chamber of Business
Mr Patrick MacLaughlin read the submission from the BCB (Please
refer to the full submission attached hereto). He stressed that
the submission did not make suggestions as to what the wording
should be, preferring to leave that to the drafters of the Bill.
Concerns highlighted reflected the need for more transparency in
the application of the proposed law, greater ease in
understanding the proposed regulations by both investors and
employers and greater efficiency in the departments applying the
law. He emphasised the need to have more law now in order to
decrease the amount of regulations needed later.
Among the points raised was the need to better phrase the term
"from time to time", which was potentially open to all
kinds of interpretation and misconception.
Any levy proposed for a work permit for foreigners would in
effect amount to a double tax, bearing in mind the current taxes
already levied upon employees working in South Africa. It was
suggested that a reasonable fixed fee be promulgated by the Bill,
which is both transparent, less onerous financially and more
acceptable to foreign countries wishing to invest or local
companies on the expansion route.
BCB objected to the principle of quotas as inter alia they
were expensive to implement and serving only as a compromise. It
was suggested that the whole system of quotas be dropped and a
further system of identification by sector be commenced.
BCB found it untenable that there were no restraints upon the
Minister with regard to his appointments to the Immigration Board
insofar as there are no calls to appoint to the board those with
expertise in commerce and business matters. He suggested that
four experienced, credible and representative members be drawn
from the business sector.
Discussion
Mr Smith (IFP) noted that both delegations had objected to levies
and enquired as to the alternative. South Africans should want to
employ South Africans first and the cost involved with bringing
in a foreigner was a form of incentive. This was a market driven
approach to the issue. He did not see the objection to the quota
system as it was a commonplace approach that was taken by most of
the world. Concerning the powers of the Minister, he felt that
Clause 28 left little discretion to the Minister and that his
powers were mostly regulated by the Act.
Mr Waters (DP) inquired as to the necessity of having a tax at
all if what was needed was to attract skills into the country. On
the issue of quotas, he agreed with the suggestion that it be
scrapped and skills encouraged into the country.
Mr MacLaughlin clarified that he did not object to the notion of
levies but was suggesting the fee be made reasonable and posted
up somewhere so that employers could know what it is.
Concerning quotas he said that most countries had a
"want" list and a "don’t want" list but
here one was talking about skills and permits. The inference was
that there would be a quota of permits supplied and the
complexity of the process would require that the system be
dropped.
Regarding the powers of the Minister is was felt that the Bill
should explicitly require that people from business be on the
board.
Responding to Mr Waters he said that there was an issue of
protecting South Africans and the fee system served this end.
However, he reiterated the need for the fee to be reasonable and
put on notice.
Mr Skhosana (ANC) raised the issue of the Board and asked for Mr
MacLaughlin’s view on the actual contribution of experts on
the Board and what he felt the Board should be.
Mr MacLaughlin replied that BCB’s only concern regarding the
Board was that there was no defined allocation regarding the
makeup of the Board.
American Chamber of Commerce
Mr MacLaughlin read through the written submission made by the
American Chamber of Commerce (please refer to the full submission
attached hereto), which to a large degree mirrored those
suggestions made by the British Chamber of commerce. The American
Chamber of Commerce was of the opinion that sections of the
amended Bill, although aiming to facilitate the entry of skills,
was in fact doing the opposite by not clearly defining the
parameters for subsequent regulations to follow.
Mr Mokoena (ANC) asked a representative from the Department of
Labour, who was sitting in on the meeting, to explain what SETA
was and to have Mr MacLaughlin comment on the makeup of the Board
and whether or not it should include foreigners.
The representative from the Department of Labour replied that
SETA is the Sectoral Educational and Training Authorities and
their purpose is to undertake skills development for the employed
by the unemployed.
Mr MacLaughlin remarked that members of the South African
business community should be nominated to the Board and this
included the possibility of countries that had invested in South
Africa.
Afternoon Session
Mr Mokoena reconvened the meeting at 2pm. He said that it was
important for Members to come back as he did not want people to
think they were being let down. However it was clear that nobody
else would be making a submission that afternoon and Mr
Vermeulen, the committee clerk, confirmed this.
Mr Mokoena reminded Members to claim their daily stipend of R60
and a further R20 in certain circumstances. He said that Members
should claim as much as they could.
Mr Waters (DP) and Mr Grobler (DP) both objected on the grounds
that it was not necessary for Members to claim the stipend as
they all had homes and a salary, which was sufficient for their
needs.
Mr Mokoena said that he was not creating something new but merely
reminding the Members of benefits that they could claim. He
suggested that those Members who had a moral obligation not to
claim, not do so.
The meeting was adjourned.
Appendix 1
SUBMISSION BY THE BRITISH CHAMBER OF BUSINESS IN SOUTHERN
AFRICA
ON THE PROPOSED AMENDED IMMIGRATION BILL No 29
Chairperson and Hon Members of Parliament
Portfolio Committee on Home Affairs
Parliament of South Africa
Cape Town
South Africa 19 April 2002
INITIAL COMMENTS
1. The British Chamber of Business congratulates both the
Department of Home Affairs and the originators of the proposed
Amended Immigration Bill No 29 on what the Chamber perceives as a
bold a courageous attempt to reform immigration policy in South
Africa. In broad principle and subject to some minor amendments
which the Chamber sees important to review in the interests of
all South Africans, we wish this Bill a successful passage into
law.
2. As the current proposals represent few changes, if any, from
the original document that was commented upon previously by the
Chamber, we shall repeat our same views conveyed in meetings with
the Department of Home affairs in the intervening period, views
that have been expressed by the majority of Foreign Chambers in
special meetings of bi-lateral chambers of commerce called in the
meanwhile to discuss these points. In addition, endorsement of
our views has been expressed by the Johannesburg Chambers of
Commerce and Industry.
3. The views expressed in this submission have been further
confirmed in a survey undertaken in recent months of its members
across all sectors of the membership.
4. In order that our comments can be perceived as both
constructive and made in the interests of all, we refer to the
particular clause and give the reasons for our objections in
broad principle. We do not, however, make suggestions as to what
the wording should be, preferring to leave that to the parties
drafting this particular Bill. If the reasons for our objections
are understood, then the necessary changes are easy to implement,
in our view.
5. The primary reasons for the changes called for in this
submission result from a perceived need by all the parties
consulted for more transparency in the application of this
proposed law; greater ease in understanding the proposed
regulations by both investors and employers and more hope that
this Bill will lead to greater efficiency in the various
sub-departments around the country applying the law. In fact we
want to see more law now, leaving less to regulations later.
Section 12. Work Permits
Para (1) (b) (i)
It is proposed that the words pay into the training
fund an amount prescribed from time to time as a ratio of such
foreigner's remuneration be dropped and a
more equitable system of fees and their payment adopted that is
neither punitive or investor unfriendly. This is for the
following reasons:
a) The expression "as prescribed from time to time" is
an extremely discomforting phrase and open, in our view, to all
kinds of interpretation, application and misconception. It
amounts, in reality, to law by regulation as perceived by
officials, the interpretation being left to that official as to
the correct "time" in his or her view.
b) the proposed fee as "a ratio of such foreigners
remuneration" would be excessive if applied say at 1% or
more, and is clearly just a punitive tax aimed unnecessarily at
what is perceived as wealthy people or companies, which is not
only unconstitutional but short-sighted. It is neither in South
Africa's interests or makes any meaningful contribution to any
fiscal reserves. It is both an irritant to those having to use
imported skills and a deterrent to investors intending to do
business in South Africa. It is an unfortunate extension of the
cynical approach "user pays", which does this country's
image no good.
c) Any levy proposed in terms of this Bill for a work permit for
foreigners in reality amounts to a double tax, bearing in mind
the current taxes already levied upon employees working in South
Africa and which go to the stated training fund mentioned by this
proposed Bill.
Suggestion:
That a reasonable fixed fee is promulgated by this law which
is both transparent, less onerous financially and more acceptable
to foreign countries wishing to invest or local companies on the
expansion route.
Para 1 (a) (ii) of the same section
It is proposed that the words "such certification
shall lapse if objected to for good cause by such office of the
Department of Labour" be completely reworded with
particular reference to the words "for good cause".
Suggestion
To avoid the ambivalence and any possible abuse, reference
has to be made to some known regulations, list or published
reasons for withdrawal or code of conduct that exists on the
subject…. or the whole Bill is of little consequence.
Para 4 (a) of the same Section
It is proposed that the words "adequate" be
deleted.
a) There is no competence in the Department of Home Affairs to
know if a training programme lodged with the Department of labour
is adequate or not.
Suggestion
That certification or evidence of contributions to the national
skills levy programme are produced or certification that a
training programme is in place.
Para 5 of the same section
a) The British Chamber objects to the whole principle of quotas
as horrendously expensive to implement; as a cumbersome and
irrational form of bureaucracy that does not relate in any way to
dynamic business situations; and usually irrelevant when applied
in view of their historical nature.
Quotas merely serve as a compromise. They are usually thought up
for difficult situations by persons with no business experience
and applied to situations that need rationing in view of
scarcity.
In general it has been found that quotas do not work and it is
the scarcity of skills in SA that has been used to justify the
inordinate expense of their application and use of other people's
time. We see no scarcity of permits for skills needed in South
Africa and, in any case, South Africa has been at pains in other
sectors to get rid of quotas as inoperable and subject to
patronage.
b) The use of the terms "needed" and similar
phraseology regarding various regulations that can be "prescribed
from time to time" further indicate to us the ambivalent
nature of this particular section as a whole. Such expressions
will make the application of quotas even more confusing to the
user and lead to non-transparent application by officials who
have little or no understanding of business needs or investment
climates.
c) Consultation with business is a costly and time consuming
"red herring", in the view of the British Chamber,
instituted under the guise of combining with business to solve a
problem only perceived within government itself. Furthermore, the
quotas so decided would be difficult to implement at all levels
of government service, amounting to yet another burden on an
already stressed Home Affairs Department official.
d) It is the view of the British Chamber that quota systems of
any sort are an unnecessary cost to the taxpayer in these
circumstances, a further incumbrance upon job creation and the
passing-on of skills to South Africans.
It is proposed that the whole system of quotas be dropped
and a further, simpler system of identification by sector be
commenced. We cannot see that the need for temporary skilled
permits should demand the establishment of such costly and
cumbersome infrastructures.
Suggestion
Re-draft the Bill without reference to "quotas"
Finally, attention is drawn to the section regarding the powers
of the Minister.
Section 28
The British Chamber finds it untenable that there are no
restraints upon the Minister with regard to his appointments to
the Immigration Board insofar that there are no calls to appoint
to the board those with expertise in commerce and business
matters.
a) Such wording indicates a total lack of understanding why the
need for work permits, or even migration in most cases, arises in
the first place.
Suggestion:
That four experienced and credible, and representative members be
drawn from the business sector.
CONCLUSION
In submitting this second submission, the British Chamber
conveys to the Chairperson and all honourable members its wish on
behalf of all its members that this Bill, when promulgated,
results in the application of law and regulations that are both
"investor friendly" and enforceable but which at the
same time do not hurt those who need the protective arm of
government.
We realize at the Chamber that we have all come to live and work
in a country with highly divergent needs and interests, with
people with different views and attitudes towards skilled
assistance and training in the workplace and in a country
experiencing change.
British Chamber represents over 300 member companies that have
invested in South Africa and we acknowledge that in many
instances the viewpoints of others are as important as our own.
We hope this viewpoint is reciprocated.
We wish you well in your deliberations and call upon this
Committee to ensure that any new legislation governing the
issuance of work permits avoids forms of selective or secretive
approaches to decision making and that as much governance as
possible is conducted in terms of law and by law rather than by
regulation, which must in our view be kept to the minimum.
Yours sincerely
Sandra van Lingen
Chief Executive
An oral submission will be made on the British Chamber’s
behalf, by its representative at Parliament, Mr. Patrick
McLaughlin.
Appendix 2
SUBMISSION BY THE AMERICAN CHAMBER OF COMMERCE ON THE PROPOSED
IMMIGRATION BILL No 29 AS AMENDED
Chairperson and Hon Members of Parliament
Portfolio Committee on Home Affairs
Parliament of South Africa
Cape Town
South Africa 19 April 2002
WHO IS THE AMERICAN CHAMBER OF COMMERCE IN SOUTH AFRICA?
AmCham was founded in 1977 as a non profit association. It
serves as both a forum and a representative body for US business
and South African American business interests through the Board
of Directors and its committees. Its focus is therefore upon US
investment in South Africa. AmCham also interfaces with
Government through its working committees with the Departments of
Trade & Industry, Foreign Affairs, Finance, Communications
and Environmental Affairs.
MEMBERSHIP
Of the 220 members, 67% are US subsidiaries, 14% are US South
African companies where the US company is a partner, joint
venture, holds equity or provides management or is a major
distributor and 19% are South African companies. Fifty seven of
our members are Fortune 500 companies. The membership employs
more than 125,000 people in South Africa with an investment base
since 1994 of over R14billion. Five of the top 15 foreign
investors are members of the Chamber. Collectively AmCham members
spend over one and half billion Rand annually on matters of
social responsibility and community development and matters
related to training, skills development, education, health,
development welfare and other such spheres of community related
work.
AmCham’s members span the broad cross-section of the South
African economy with interests in banking and financial services,
advertising, agriculture, automotive, engineering and
construction, chemicals and pharmaceuticals; IT technology and
telecommunications, consumer goods and retailing; electronic
equipment; liquid fuels, mining, training and recruitment.
INITIAL COMMENTS
The American Chamber of Commerce in South Africa is of the
opinion that in the broader context, the proposed Amended
Immigration Bill No 29 is a necessary step on the journey of
establishing a sound immigration policy for South Africa.
However, after careful study the Chamber submits what it
considers to be some important revisions to certain portions of
the Bill, particularly with regard to the legislation regarding
permits for skilled foreign workers.
The current proposals, we note, appear to be little altered from
the original document that was commented upon on 17 August 2001
by this Chamber. Our points conveyed in that document still
stand, and would point out that we have in the interlude met
senior Dept. of Home Affairs officials and discussed our points
of divergence on the proposed Bill, as were similarly expressed
by the majority of foreign business chambers operating in South
Africa. Consequently we have to assume that either our points are
not acceptable or that the opportunity for change still exists
and no alterations have been made to the printed document.
We therefore repeat what we previously submitted as initial
comment. AmCham has considered these proposals from a foreign
investor viewpoint. The objective of any foreign investor must
surely be to find a growing market in which there are clearly
evident opportunities to establish and grow market share; where
there is an environment of free trade; and where there are few
restrictions placed on the ability to develop and provide the
products and services that the market demands.
When foreign investors evaluate the situation in South Africa
this will be against a background of investment opportunities
elsewhere.
Investors always seek stability, predictability, profitability
and clarity in any opportunity in which they invest. Absence of
these does not necessarily preclude investment but it absolutely
results in a discounting of the value of the investment. When any
of these variables is absent or unclear, investors always assume
the worst scenario and subsequently translate that view into
their investment evaluation.
In conclusion, AmCham adds that the primary reasons for the
changes called for in this submission result from a perceived
need by all the parties consulted for more transparency in the
application of this proposed law and greater ease in
understanding the proposed regulations by both investors and
employers.
Section 12. Work Permits
Para (1) (b) (i)
It is proposed that the words pay into the training
fund an amount prescribed from time to time as a ratio of such
foreigner's remuneration be completely reviewed
and a more transparent and reasonable fee system is devised
which is neither punitive or which duplicates with other fees and
levies in South Africa for "training" purposes. It is
the AmCham view that on matters of training and skills education,
the Department of Labour should remain as principals on all
matters as they facilitate the skills levy fund.
1) More clarity is sought on what fees are involved. This kind of
confusion to the reader is what will occur in the mind of an
investor. The expression "as prescribed from time to
time" is vague and disconcerting and open, in our view, to
all kinds misconception. It amounts, in reality, to law by
regulation as perceived by officials.
2) The proposed fee structure merely increases the cost of doing
business in South Africa. It will, in fact, amount to a double
tax since employers are already paying a skills levy on the
salaries of all employees.
Suggestion:
That a reasonable fixed fee is promulgated by this law which
is both transparent, less onerous financially and more acceptable
to foreign countries wishing to invest or local companies on the
expansion route.
Para 1 (a) (ii) of the same section
It is proposed that the words "such certification
shall lapse if objected to for good cause by such office of the
Department of Labour" be completely reworded with
particular reference to the words " for good cause".
1. It is indicated that no reasons for a refusal to grant a
permit have to be given when a refusal is made. This is both
unhelpful and non-transparent and can lead to a number of
unfortunate conclusions. It would assist in the interests of
transparency and good-governance if reasons are always stated and
will lead to a better understanding of policy and what South
Africa’s requirements are.
Suggestion
To avoid the ambivalence and any possible abuse, reference has to
be made to some known regulations, list or published reasons for
withdrawal or code of conduct that exists on the subject.
Para 4 (a) of the same Section
It is proposed that the words "adequate" be
deleted.
The adequacy of any programme must remain determined by the
sectoral SETA involved.
Suggestion
That certification or evidence of contributions to the national
skills levy programme is produced or certification that a
training programme is in place. We cannot see how the Dept of
Home affairs, or its officials, are in a position to discuss or
assess with investors or employers training matters.
Para 5 of the same section
1) The American Chamber does not wish to support the process of
creating job quotas in any form and experience in such matters
leads to the belief that a quota system is a cumbersome and
inaccurate reflection of the state of a country’s job
requirements. It is a burden upon a taxpayer.
2) Furthermore, quotas in this case would not be able to keep
pace with rapidly changing business conditions since their
formulation is based on historical conditions.
3) We cannot accept any other system than the basic, simple idea
that should a work permit be needed for a skilled worker it is
considered on its own merits based upon the need in that specific
application.
Bearing in mind that AmCham advises that quota systems will be a
most unacceptable basis for controlling the allocation of work
permits, then the following comments are also made in respect of
Para 5.
4) The use of the terms "needed" and similar
phraseology regarding various regulations that can be "prescribed
from time to time" further indicate to us that clarity
is needed.
Suggestion
Re-draft the Bill without reference to "quotas"
Finally, attention is drawn to the section regarding the powers
of the Minister in matters relating to the formation of the
Immigration Board.
Section 28
In order for the Bill to perceived as "good"
legislation and serving both those who fall under its wording and
those who wish to apply it, it is AmCham’s view that the
wording should include a point of reference where the Ministry,
the Department or the Minister, can obtain guidance on business
parameters in order to guide decision making as it affects the
business sector.
AmCham finds it surprising that there are no provisions for
the appointment of local or foreign business representatives on
the proposed Immigration Board.
Suggestion:
That representatives be drawn from the business sector to
represent the interests of commerce and industry and the
interests of foreign investors that have already invested in
South Africa.
CONCLUSION
Owing to the major skills crisis in South Africa, which
limits both new and increased investment, AmCham is concerned
that the sections of the Amended Immigration Bill No 29 as
proposed, although aiming to facilitate the entry of skills, is
in fact doing the opposite by not clearly defining the parameters
for subsequent regulations to follow. Clarity is called for in
the anchor law itself in order to avoid confusion in any
regulations which may follow.
AmCham hopes that serious consideration will be given to these
points and thanks the Portfolio Committee once again for the
opportunity to present views before them. It is hoped that any
new legislation governing the issuance of work permits is
conducted in terms of clearly defined legal parameters thereby
reducing subsequent regulations to the minimum and decision
making on applications more transparent.
Yours sincerely
Luanne Grant (Mrs)
American Chamber of Commerce in South Africa.
17 April 2002
Immigration Bill
BSA submission to the PARLIAMENTARY Portfolio Committee
on Home Affairs
Text of oral introduction on 17 April 2002 to BSA’s
written submission of 15 April 2002
It has been observed that immigration harden hearts and softens
brains like no other issue. Resistance to foreigners is often an
emotional reaction based on the inaccurate assumption that
instead of growing resources you and the foreigner compete for
limited resources. Not even the USA gets by without foreign
investment and massive inflows of foreign skills. The arrival of
legal immigrants has a multiplier effect because they are
consumers as well, and causes a net increase in jobs and growth.
· The EU is looking for 1.6 million
immigrants per annum.
· Germany has a new liberal
Immigration Bill designed to simplify entry of skills especially
the 75 000 computer technicians she is looking for.
· Even Xenophobic Japan wants to
import foreigners
· Ireland is attracting million of
immigrants and the return of its diaspora
· Los Angeles is only 35% ‘white’
and by 2050 nearly 200 million of the total of 400-million
Americans will be Latino, Black or Asian, many technologically
trained.
We are competing for there foreigners but we are not an
attractive destination. Legal immigrants, we believe, are no
threat to us but constitute a competitive advantage. They promote
economic growth and give vigour and adversity to our country. We
don't need to discourage legal foreigners.
In the summary of the UN Economic Report on Africa 2000 paragraph
39 reads ‘Any improvement in African economic performance
will depend on the extent to which the continent becomes
integrated into the world economy.’ This entails a flow of
commerce and skills, remembering that when we import a skilled
foreigner s/he comes with the capital, knowledge and resources
that his/her country of origin has invested in him / her, and we
get this free.
Do we need the additional impediment of a levy or licensing fee?
The investor, after all, stands last in the cash receipt queue,
after suppliers, employees, lenders, government and reinvestment.
Uncertainty is anathema to investors. If there is uncertainty
they require a very high rate of return. It is estimated that
over 500 changes have been made to the business regulatory
environment in the past 6 years in South Africa, hardly
encouraging confidence from investors.
The National Enterprise Survey conducted by Dr S Gelb for the
President found obstacles to investment tabled by foreign owned
and local business to be crime, high interest rates, labour
regulations, uncertainty about the labour regime in the future,
high effective company taxes, low skills, lack of institutional
incentives and others. As an aside, our attention was drawn to an
article in Beeld newspaper yesterday whereby the US Trade
Representative published a report on various countries. Regarding
South Africa the comment was made that there were three major
impediments to trade and investment in South Africa, namely
crime, the Telkom monopoly, and the archaic immigration law.
But the most sobering statistic to emerge from the survey was the
response to the question to what extent government takes into
account the concerns of business when formulating policy. ’Hardly
ever' was the response of virtually 50% of the respondents. In
this context there must be a high ‘investment hurdle rate’
because investors do not have confidence in the government’s
determination to reduce investment risks and costs. A confident
and progressive immigration regime is one way to stimulate
investment interest in South Africa.
Foreign saving can top up domestic savings shortfalls but this is
limited, and generally follows the lead of domestic investment.
The major source of funding for investment in South Africa is
almost exclusively the private corporate sector, accounting for
over 98,6% of total net capital formation of R165-billion in the
period 1991-2000. Government has been of little help because it
has been dissaving through the 1990s and in real terms government
actually destroyed capital.
A recent comparative study by BSA compared South Africa with
similar developing countries namely Australia, Brazil, Ireland,
Malaysia, New Zealand, Poland, South Korea and Turkey. Our growth
in real GDP per capita for the last 20 years was the lowest. Our
effective tax rate, which is the actual rate companies pay, is
far higher than all these countries - 5 times higher than
Ireland. Apart from company tax numerous other taxes disguised as
user charges and levies (which is exactly what the licensing fee
is) also impact significantly on costs and hence on investment
decisions.
Countries with the lowest effective tax rates have been,
unsurprisingly, the largest recipients of Foreign Direct
Investment over the past decade.
Do we need a new Immigration Act? Of course we do; the old Act
and particularly the culture that has sprung up around it, is
unconstitutional, inefficient and philosophically antiquated. It
is based on the old laager mentality; draw the wagons onto a
circle and don’t let any foreigners in.
As for the licensing fee, of course it will have an effect on
domestic and foreign investment. It will make our effective tax
rates even less competitive. The Department of Home Affairs
considers the system to constitute an acknowledgement of the
necessity of importing knowledge to grow our economy and helping
to provide the means to train domestically. However without the
fee this perception and actuality will be vastly increased in
employers and investors. Allowing exemptions on clear and
unequivocal terms where the employer has a sensible program for
training South Africans will also help to neutralize the
disincentive effect of the fee.
As far as the value of migrants is concerned, a mammoth study
carried out for the American Congress in 1997 by the National
Academy of Sciences concluded that immigration provided a net
direct benefit of $10-billion to the American economy, excluding
benefits of new businesses started by immigrants and the gains
from a broader range of products and services. A Berkeley study
calculated that American taxpayers make a cumulative profit of
$80 000 from each legal immigrant over his lifetime. Other
studies suggest that legal immigrants in America add at least 1,6
new jobs each, and skilled immigrants would probably add double
that.
We deal with the impact on the mining industry under the
text of proposed amendments to sections 12 and 16 of the Bill, as
follows hereafter. Apart from what is contained therein we will
expand orally on the following issues in particular:
· Massive impact on the GDP of some
of our neighbours
· Failure to consult with and advise
our neighbours
· Deleterious consequences to
employment and mining investment
· Implications to SADC and NEPAD
· The absence of leakage of legal
mining migrant labour, employed under the interstate agreements,
into illegal processes.
WRITTEN REPRESENTATION : 15 APRIL 2002
The Committee has said it does not want speeches or ideology. It
wants practical proposals for amendments. We will accordingly
just indicate our viewpoint in a brief introduction of 4
paragraphs and then pass to proposed amendments.
Introduction
1. Africa, where man developed, has been the continent
subject to the greatest migrations in history. Although many
factors may motivate migrants, most people prefer to stay where
they are unless driven by desperation. 9 out of 10 people in the
world live and die within 100 miles from the place they were
born. Migrants in this sense, poor or rich, are an exceptional
group. Their energies and willingness to take risks has driven
development all over the world.
2. While migrants are important, Business itself does not want to
import foreign skills if it can avoid it because they are
expensive, they drive up the labour market, and they do not give
Business the security it gets from domestic skills. Business
needs to train South Africans and fully supports government
skills development strategies, but training is not as simple as
it may seem. There must be an available position, and usually the
worker must be literate, numerate and trainable. Because the
acquisition of high level skills is often a lengthy process we
have to supplement it with some imported skills or we will fall
further behind in technological prowess and we will never catch
up. There are only 3 instances when the importation of skills is
critical:
(a) When they are needed to grow our economy to create a
critical mass of skills which will enhance further investment and
training of our people. Training is useless if there are no jobs
to train for. Importing certain skills does not take jobs away
from South Africans. It creates jobs by faster growth and newly
competitive industries. Jobs require growth, skills and
investment and in a globalising world this means we must make
ourselves an attractive investment destination and a good place
to run a business. If this requires some skills we do not have we
have to import them and in the process improve the competence of
our own workers. Most real training occurs in the workplace by
experiential transfer of skills, where it occurs automatically
and inevitably as part of the process of working in a team.
(b) When we need skilled foreigners to train our people directly,
both for practical and academic purposes, and also to access
foreign donor and investment funding. Especially but not only in
the field of knowledge work such experts are crucial. It must be
borne in mind that a skilled foreigner is a gain to our resources
and a subtraction from those of the foreigner’s own country,
which trained and sustained the foreigner.
(c) When it is part of a regional growth strategy under SADC and
NEPAD principles (which will apply to unskilled and semi-skilled
as well). There has been very little development under this
heading because as far as we aware no African country has yet
devised a coherent migration policy.
3. Clearly we have a shortage of skills. The University of Cape
Town estimates that official figures for emigration underestimate
the true scale of the brain drain by two thirds. There is an
acute leakage of both black and white professionals. 40% of all
African investment goes outside Africa due to a lack of
confidence in growth in Africa. The International Organisation
for Migration of the UN is driving a programme to try to get
skilled black emigrants to return from overseas to Africa. Africa’s
per capita income is lower now than 50 years ago for one reason
because of the withdrawal of a lot of investment from Africa. We
must reverse this and globalise intelligently to attract capital
back to productive businesses in Africa, which are not hamstrung
by ideological fixation or historical resentment.
4. We need to be bold, to open our doors a little wider to
skilled foreigners and perhaps also energetic and innovative less
skilled entrepreneurs. We should not retreat into the same laager
into which Afrikaner nationalism disappeared. It is simply untrue
that the old government’s policies focussed on open inflow
of whites into the country - the old government brushed off
British and European foreigners who were not ideologically bound
to government policies and the apartheid regime.
We then pass on to the proposed amendments overleaf.
Text of major or substantial amendments proposed to
Immigration Bill B79-2001
Following the scheme of the Bill seriatim, with
insertions underlined and deletions in brackets (the most
important issues headed in bold)-
S4. General entry permit
The proviso is unclear and poorly phrased. The word [and]
should be substituted by ‘save that it’ and the
Roman numerals deleted so that the proviso follows in one
sentence.
S11. Relatives permit
A discretion should be granted to allow a relatives permit to the
immediate family of a temporary resident. At present there is no
provision for such possibility at all. We propose insertions of a
new sub-paragraph 11(3).
`11(3): In its reasonable discretion the Department may issue
such relatives permit on similar terms, to the holder of a
temporary residence permit.’
S12. Work permit
Generally Business does not support the licensing fee
system and will address the Committee in this regard. Each
additional charge or impost upon Business reduces economic
growth, investment and employment. Already Business faces major
disabilities in regard to cost of capital, lack of incentives for
investment, high effective company tax rates, crime, political
instability in sub-Saharan Africa, labour protectionism and many
others.
With regard to the mining industry the fee can turn marginal
mines into loss-making entities with accompanying contraction in
employment and deleterious impact upon the investment climate of
all mines. The low dollar costs of production resulting from the
slide of the rand will soon fade as production inflation swells
costs. The consequences of the fee can cause economic breakdown
in our more vulnerable neighbours. We note that Cosatu believes
an investigation into the impact of the fee should first take
place and that the fee should not simply be imposed upon mining.
If the fee system is persisted with, the industry proposes that
mining contract labour be excluded from the fee as there is no
leakage from the mining labour system of mines using the
interstate agreements and our neighbours are dependant upon
miners’ remittances. This will require additional
sub-paragraphs 12(6) and 16(8) both effectively saying simply -
12(6) and 16(8): ‘Mining labour contracted strictly
according to the provisions of interstate agreements with
neighbouring countries shall be excluded from the payment of the
fee or financial consideration to be shown in the training fund.’
This will also satisfy our SADC obligations and facilitate
development of NEPAD. In addition exclusion will send an
appropriate message to investors and neighbours, since even if an
exemption is available at a later stage it will be perceived to
be temporary and changeable.
12(1)(a). Labour standards are incorrectly stated to be as
‘determined’ by the Department of Labour. This implies
that the Department of Labour finalises these standards which it
does not. The 4th line of (a) should read, from ‘taking
into account’, as follows-
‘taking into account advice from the Department of Labour
on applicable collective bargaining agreements and other
applicable standards [delete - as determined by the Department of
Labour], if any, provided that - ‘ etc.
12(1)(a)(ii). Provision should be made for review of the
objection by the Department of Labour as it is not covered by the
general review section of s34, which refers only to
determinations made by the Department of Home Affairs. To enable
such review to take place the Department of Labour should give
its reasons for refusal to certify. It is proposed that a proviso
be added after S12(1)(a)(ii) as follows:
‘provided that the objection and the reasons for it are
conveyed to the foreigner within such period’.
Inclusion of appropriate wording providing for review of the
objection will be proposed under s34 infra.
12(2). In order to prevent personal and economic confusion by
failure to provide the necessary certification timeously as a
result of forgetfulness or accident, it is suggested that at the
end of the sub-paragraph the following should be added:
‘The work permit may be reissued without any form of
penalty if the Department if satisfied that a reasonable
explanation for the default has been made’.
12(4). A training programme is either adequate or it is not.
If adequate, the licensing fee should be waived, as was
originally understood to be the intention behind the process.
Accordingly, the word ‘reduce or’ should be
deleted in the first line of (4). A new (c) should be added -
12(4)(c) ‘where the employer has a training scheme which
is not considered adequate but which represents a reasonable
attempt in good faith to undertake training the said payment may
be reduced’.
S15. Intra-company transfer permits
It may be commercially desirable to transfer an employee from a
foreign branch of a business for a few years. However the
certification in 15(1)(a) that the employer ‘needs’ to
employ such foreigner in the Republic is too onerous. ‘Need’
can be interpreted in many ways. We propose substitution of
[need] by ‘has good business reasons’.
There seems to be a consensus that this process of inter-company
transfer should be especially encouraged in SADC countries, but
this can be dealt with in regulations or within the powers of the
Department in managing the process.
16. Corporate permit
16(2)(a). Some commentators have said that the process of
determining maximum numbers of foreigners depending upon the
financial contributions offered could be applied in a manner
approaching extortion. To avoid this problem we propose that a
ceiling or limit be inserted. It is suggested that at the end of
16(2)(a) the following clause should be added -
‘which shall not exceed the prescribed fee set out in
12(1)(b)(i) multiplied by the maximum number of foreigners to be
authorised’.
16(4). At the end of this clause the words ‘and
modify contributions accordingly’ should be included.
There are many onerous provisions for Business in this section
but bearing in mind the exceptional nature of a corporate permit
Business will not propose further amendments and will have to
reconcile itself and manage the conditions of the permit as well
as possible.
S17. Exchange permit
17(b)(iii) seems pointless (whether or not the current law is
similarly applied) if there is a bona fide exchange and merely
adds unnecessary verbiage to the Bill. It should be deleted.
S21 Direct residence
21(a)(ii). Foreigners can be held hostage by the Department
of Labour simply failing or refusing certification. It is easy
for ambitiously created bureaucratic structures to crash because
of inadequate capacity or inadequate industry and application. At
the end of this clause should be added: -
21(a)(ii) ‘--- such terms and conditions should be deemed
not to be inferior if the Department of Labour within 3 months of
receipt of a request to do so fails to certify or to notify on
good cause why it will not certify, and a refusal will be
reviewable under s34, mutatis mutandis’.
S22 Grounds for residence
The certification from the Department of Labour in 22(a)(ii) is
entirely functionless in this context and the clause should be
deleted.
22(a) to (g) are apparently alternatives and after (a), each
should be preceded by the conjunction ’or’.
S24. Undesirable persons
In 24(i)(f) after the description ‘anyone who is
fugitive of justice’ should be added ‘with due
weight to be given to the reputability of such country’s
legal system’.
S28 Immigration Advisory Board
We are concerned that the Board is likely to be
overburdened with officials and bureaucrats. The section lacks
any specific provision for civil society to be represented. Four
individuals with ‘expertise’ are to be appointed,
leaving well over a dozen with perhaps no knowledge of
immigration at all.
It is proposed that in 28(1)(j) the following should appear at
the end of this sub-paragraph:- ‘which shall include
representatives from Business, Labour and specialists legal
practitioners in migration law’.
S29 Objectives and functions of migration control
29(1)(j)(ee). Facilitating the movement of students and academic
staff within the SADC is laudable but inadequate. Experts will
often not be available from the SADC. Add at the end of this
sub-paragraph accordingly - ‘as well as from the wider
academic community throughout the world’.
Furthermore (aa) to (ee) cannot be seen as exhaustive methods of
promoting economic growth. The words ‘inter alia’
should be added after the words ‘promote economic growth’
in (j)(i).
29(1)(k). Business believes the Department should be financed by
the fiscus and not seek to defray its overall costs by fees and
fines. The words ‘in a responsible manner’
should be added after the word ‘receives’ and the
following expression should be deleted - [in such a fashion as to
defray the overall costs of its operations.]
29(2)(f)(ii) is incorrect when it states that the Department must
prevent migration to the Republic. Obviously the word ‘illegal’
must be inserted before ‘migration’.
S30 Powers of Department
These are extensive and easily conflict with the rights of
privacy, physical integrity and the management of business. The
powers should be prefaced, after ‘the Department may’
with the words ‘with reasonable circumspection and care
at all times’.
S34 Adjudication and review procedures
As indicated previously s12(1)(a)(ii) read with s34 are
defective in that they lack a process for review of an arbitrary
or unreasonable refusal by the Department of Labour to issue a
certificate. This can be corrected by rephrasing so that the
section reads:-
‘34(1) Before making a determination adversely affecting a
person or in the case of the Department of Labour making
objection under s12(1)(a)(ii), the Department shall notify
the contemplated decision or objection and related
motivation to such affected person and give such person at least
10 calendar days to make representations, after which the
Department shall notify such person that it shall become
effective, subject to subsection 2.
‘(2) Within 20 days of its notification, the person
aggrieved by an effective decision of the Department or
objection by the Department of Labour may appeal it’
etc. Thereafter, wherever the word ‘decision’ appears
the words ‘or such objection’ should be
appended.
S36 Investigations
The words ‘acting with reasonable circumspection and care
at all times’ should be added prefatory to the words
‘investigate’, along the lines suggested in s30 Powers
of Department.
S37 Deportation and detention of illegal foreigners
Section 37(1). To prevent or limit the gross abuse of human
rights currently reported on arrest of foreigners, after the
words ‘an officer may’ in the first line should be
added ‘if he has reasonable grounds’. This will
support the present guidelines to Police.
Section 37(3), is in the view of Business, unconstitutional and
patently unreasonable. It constitutes imprisonment for debt and
takes no interest in the ability of the foreigner to pay. In
prospect it allows for indefinite imprisonment for life if
rearrest and reconviction takes place after each period of 12
months. The ensuing words should be added at the conclusion of
the present sub-paragraph (3).
‘It must be proved by the Department that the foreigner
has sufficient available funds’.
S40 Immigration Courts
Business is concerned about matters of status being dealt with in
Magistrates’ courts, for the same reason that matters of
status were originally denied to the Magistracy. However we
recognise the practical problems in consigning these issues
exclusively to the High Court, to which there is in any event an
appeal. We therefore merely express our concern but will be
guided by this Committee. In 40(2)(a), after ‘the review of
decisions of the Department in terms of this Act’, we
propose adding ‘or objections to certification by the
Department of Labour’, to match up with S34.
S41 Employers
There is no need for the reversal of onus in 41(3). Such
reversal should only take place in exceptional cases as it
offends against the principles of our system of justice. It is
not constitutional and the limitation clause is in our view not
activated. The whole of s41(3) and s41(5) should be deleted.
S45 Aiding and abetting illegal foreigners
The average person does not know whether a foreigner is illegal
or not and if he is, whether he will for example receive an
asylum permit. This section is Draconian. Feeding a starving
foreigner would appear to be an offence. Perhaps it should
exclude limited humanitarian aid.