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CHAMBERLINK - PROUD SERVICE PROVIDER TO ERCOC

How to identifya dodgy ISO orOHSAS auditor

Consultingprofessionto regulate

consulting feesP4

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Consultingprofessionto regulate

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Consultingprofessionto regulate

consulting feesP4

SA EnvironmentLaw Update P20

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SA EnvironmentLaw Update

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THE CUSTOMER MAYBE KING OR QUEEN...BUT NOT ALL CUSTOMERSARE CREATED EQUAL

26

Farzana Laher | Branch Manager | FNB Nigel | Branch BankingCnr of

R42 | Rhodes Avenue, Northeast Cnr Angelo Mall P O Box 46 , Nigel

011 8148266 | 011 7395613 | FLaher@fnb.co.za

|

Tel: Fax: E-mail:

Web: Mobile:www.fnb.co.za www.fnb.mobi

Fnb would like to thank all our loyal

customers for their support. We look

forward to many more enduring rewarding

relationships in the future.

Wishing you a merry christmas and a happy

new year over the festive season. Have a

safe journey for all those travelling.

I N D E XChamber Bulletin

We want to encouragemembers of the EastR a n d C h a m b e r o fCommerce & Industry tosubmit any and allmaterial we can publishwithin our next ChamberBulletin.

The purpose of theChamber Bulletin is togive you the opportunityto put your company,your products and orservices into a wellcompiled document,being sent out to all ourmembers and newslettersubscribers.

W e a l s o w a n t t oencourage members tomake sure that theirwebsites are up to date.I f y o u h a v e n e winformation, or photos,s e n d t h e m t owebdesigner@chamberlink.co.za or arrange for acompany representativeto come visit you. He willalso be able to take somephotographs we can usein both the ChamberBulletin and as updateswithin your website.

Make use of the servicesy o u h a v e a t y o u rdisposal.

If you are unsure whatexactly the extent of theservices are you qualifyfo r as an ERCOCmember, please let usknow and we will get youup to date.

As we are nearing theend of 2013, make surethat you have covered allthe necessary angles ofyour company. Makesure everything is up todate so that 2014 canstart at full speed.

Business News

Members Area

Page 4

Page 5

Page 6

Page 7

Page 8

Page 9

-

- How to identify a dodgy ISO or OHSAS auditor

- Fatigue - Sleep is not cheap

- A look @ Health & Safety of third parties on site

- The causes & effects of incidents

Consulting Profession to regulate consulting fees

- Personal Development and the Health & Safety practitioner

Page 20

Page 26

Page 28

Page 10

Page 18

Page 19

Page 25

- SA environment law update; November 2013

- THE CUSTOMER MAY BE KING OR QUEEN... BUT...

-

-

Fully Automated Plants - ITS

- Manufacturer of

- Effective Blinds

- Carlmach Engineering

Economic growth in South Africa : a 20-year review

Solid Wood Furniture - FTP Furniture

Page 12

Page 13

Page 14

Page 15

Page 16

-

- Revamping your garden - Pavermoulds.

- Business Finance - Business Partners

- Mag Repairs - Mag Magic

-

Special Offer to Members

NEW WEAR RESISTANT COATING LAUNCHED

PNG Publishers are offering all Chamber

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19 13

Consulting profession toregulate consulting fees

Legal, health and safety, environmental,medical and other consulting fees remainopen to exploitation, and should beregulated, said NIOCCSA.

Lack of regulation int h e c o n s u l t i n gindustry was part ofthe cause of statee x p e n d i t u r e o fR 3 3 . 7 b o nconsultants per year.Consultants and thestate could be partlyt o b l a m e .Government is not acash buyer, andpayment terms areoften in excess of 120 days.

“Smaller consultancies do not have thecash flow to carry the debt for extensiveperiods, and when submitting a quote,are likely to quote a ridiculous price in thesubconscious hope of not being awardedthe tender.

“When it does result in an award,government pays too much for too little”,writes National Institute of ComplianceConsulting of South Africa (NIOCCSA)Verification Standards Committeedirector Rudy Maritz.

“Another problem is a lack of a standardfee structure based on competence andcomplexity of the service required. Anyperson wanting to benchmark a quotemight stumble on the SACNASP rates,citing a Category B professional cancharge as much as R1630 per hour.”

SACNASP is the statutory body forNatural Scientific Professionals, whichincludes Food and EnvironmentalSciences. Their lowest recommendedrate for consulting fees is R700 per hour.

Category B consultants are defined as apartner, sole proprietor, director, ormember who shares the risk and liability

SACNASP consulting categories andrates

of a business practice, performs work of aconceptual nature in natural sciences ordevelopment, provides strategyguidance in planning and executing aproject, or carries responsibility forquality management.

“These specialist fields do not exist invarious state departments, and if it does,it may not be applied internally due to therequirement of independence from theoutcome of a project application,” writesMaritz.

“Application of a state project in terms ofNEMA and the NCA has to be handled byan external consultant at these statutorydetermined consulting fees.

“The same applies to the SACPCMP, andtheir schedule of fees. If governmentspends that much, what does the privatesector contribute to the consultingprofession?

“There is no mechanism to governprofessional consulting practice. This isone of the reasons for the formation ofNIOCCSA, to promote and enhance thepublic image of consultants, and toprotect the public from exploitation, byse t t ing consu l t ing competencystandards, auditing and reporting on theprofession.

“In the absence of standards of costing(as opposed to price fixing by setting astandard rate) consultants are free toquote according to their own assessmentof worth.

“Professional bodies do not alwaysconnect the dots by adding a monetaryvalue to a professional designation, likeSACNASP did, and a graduateprofessional deems him or herself worthmore than a person with a one weektraining certificate,” writes Maritz.

Construction health and safetyconsulting fees

Health and safety institutes do notregulate fees

Continue on P23

Editors CornerP4

EditorsNoteSo we have come to the end

of 2013. It still feels so

surreal.

We hope that this year has

been one you can look back

a t a n d s e e a l l t h e

opportunities you have

grabbed hold of with both

hands and made a success

of each one of them.

May the lessons learnt be

remembered to ensure that

2014 can only turn out even

better than 2013.

May you end the year on a

positive note.

As the East Rand Chamber

of Commerce & Industry we

want to wish al l our

members and their families

a marry Christmas and an

amazing new year.

Editor & Chief

Zack Tesner

A group ofSouthern AfricanHealth and safetyprofessionals plan

to regulateconsulting fees.

or unconscious of their “incompetence”.

– Unconscious competence

As they recognize their “incompetence”, theyconsciously acquire a skill,

– Conscious competence

Then consciously use it, requiring lots of concentration

– Unconscious competence

Eventually, the skill can be utilized without it beingconsciously thought through: the individual is said tohave then acquired unconscious competence.

Would it not be fun to find outhow far you can go?

Improving yourself proactively, working on self-awareness, improving your skills and knowledge sothat you can reach your full potential, all of this is aninvestment into the greatest asset you’ll always have– Yourself.

But beyond self-development, personal developmentalso includes developing and helping others. ‘Youcan make more friends in two months by becominginterested in other people than you can in two yearsby trying to get others interested in you”.

I pray that your path to personal development will betruly uplifting, and that the process, as well as theachievements, will continue to be positive, andenergizing.

Stage 2

Stage 3

Stage 4

Invest in yourself

“Until you make the unconscious conscious, itwill direct your life and you will call it fate.”

Personal development and theHealth and Safety practitioner

Ria Swanepoel

The world, more specifically the businessenvironment, is constantly changing. As a result it isexpected of the Health and Safety practitioner torespond to these changes in a fitting and professionalmanner, to constantly evaluate own performances andto recognize where strengths and weaknesses lie.

No one is perfect, and no one knows everything thereis to know. Socrates said “The only true wisdom is inknowing you know nothing”. Thankfully we generallydon’t need to know everything, but we shouldrecognise when to learn something, and when todevelop new skills and abilities.Personal development for growth

The desire to improve should therefore be central to allHealth and Safety practitioners and can be achievedby displaying a commitment to unending personaldevelopment, and by actively striving to keep Healthand Safety skills and knowledge up to date.

Defined, “personal development” means theconscious pursuit of personal growth by expandingself-awareness and knowledge and improvingpersonal skills.

So how can you get started on this journey of personalgrowth?

To see your situation as it really is and accept it.Identifying areas of your job where it might be reallypainful to accept the status quo.If you accept the truth you have laid the mostimportant foundation for real growth.From there you can move forward. Withoutacceptance it is not going to work.

Are you a victim or a winnerAre you self-confident or notAre you in control, successful, happy …… Or not?

You have to know where you stand. You have to makethe unconscious conscious. Psychologists refer to thisas the “Four stages of competence”:

– Unconscious incompetence

Individuals are initially unaware of how little they know,

1. Step number one involves acceptance.

2. How do you see the world and yourself in it. Howyou see yourself will determine how you act!

Stage 1

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P5Business News

How to identify a dodgyISO or OHSAS auditor

In South Africa’sskills shortage, it isdifficult to get ac o m p e t e n t ,independent andobjective ISO orOHSAS auditor for2nd and 3rd partyaudits.

Frequently, auditees do not check norverify auditor credentials prior to theauditor conducting an audit on their site.Remember, you are paying the bill andneed to ensure that you are getting acompetent auditor to come and assisty o u i n i d e n t i f y i n g c o n t i n u a limprovement opportunities in yourmanagement systems.

A common mistake we are all guilty of isthat we assume that the auditor isregistered or competent. We also trustthat when the individual do say that hisor her registration is in order, that itactually is. Just like with any otherprovider of services, you need to verifythe current status of the auditor prior tostarting the engagement.

Below are some of the signs that youmight not be getting what you thoughtyou should, in your audit:

When do people take short cuts or fallasleep or are most likely to be fatigued?When do we have less supervision? Isshift change-over not a critical part toaudit?

1. The auditor does not audit thenight shift or other shifts.

2. The auditor generates a non-conformance for a legal register notbeing presented.

3. The auditor generate the auditreport during the actual audit.

4. The auditor does not audit the“other” part under the standard’slegal & other clause.

5. Under the “legal” clause, theauditor only audit the “OHS Act” or“Mine H&S Act” and not otherapplicable SHE legislation.

Nowhere in any of the ISO9001,ISO14001 & OHSAS18001 standardsunder the clauses for legislation does itgive a requirement to have a legalregister. It does state that there must beaccess to legislation, it must be updatedand communicated, but that can bedone and proven in other ways as well.

You paid for 3 days of auditing, not 2days and then the last day they sit andgenerate the audit report. Ask howmany days the audit will be and howmany days the audit report writing willtake. Be prepared to pay for anadditional day for the completion of theaudit report off-site.

“Other” refers to head office or grouprequirements, customer requirementsor contractual requirements (not limitedto these examples only). When last didan auditor prepare prior to the audit forthis information and then on the day ofthe actual audit did he/she audit the“other” requirements?

This clause does not stipulate only onelaw – it implies “all” applicablelegislation to your operation.

Continue on P24

Business NewsP6

T h e u l t i m a t eservice deliveringchamber.

Why join theEast Rand

Chamber ofCommerce &

Industry

We have what you need.

Gone are the days wheret h e C h a m b e r o fCommerce was theinstitution whom arrangedcake and tee events somembers could meeteach other.

The need in companies isso much bigger than this,and that is the reason wehave decided to bedifferent.

You benefit frombecoming an ERCOCmember.

And more service toselect from.

WILL

Datadex

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Visitwww.burnshield.com

08610 BURNS011 440 5171

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Fatigue – Sleep is not cheap!Celeste Erasmus

Fatigue affects a person’s health, increases thechance of workplace injuries occurring, and reducesperformance and productivity within the workplace.What is Fatigue?

Fatigue can be defined asincreasing difficulty inperforming physical ormental activities. Signs offatigue include tirednesse v e n a f t e r s l e e p ,p s y c h o l o g i c a ldisturbances, loss ofenergy and inability toconcentrate, irritations,short temper, etc. Fatiguecan lead to incidents because workers are not alertand are less able to respond to changingcircumstances and they have impaired concentration.Fatigue can also lead to long term health problems.What are the causes of fatigue?

Roster design, eg. too many consecutive night shifts;Aspects of the tasks being undertaken, eg. greaterworkload within standard shifts; andStressors, eg. Work environment, dust, heat, cold,noise, mental, physical, etc

Sleep disruption dueto ill family members;Strenuous activitiesoutside work, such assecond jobs, sportactivities, clubbing,partying,Sleep disorders,Inappropriate use ofalcohol, prescriptionand illegal drugs.Stress associatedw i t h f i n a n c i a ld i f f i c u l t i e s o rd o m e s t i cresponsibilities, goingthrough a divorce,children being sick,etc

E f f e c t i v e c o n t r o lmeasures along with education about sleep health andthe importance of making sleep a high priority should

Work related causes

Non-work related causes

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P7Business News

form the basis for any fatigue management plan.

Fatigue control measures refer to a range of strategiesaimed at either minimizing or counteracting the effectsof fatigue when driving and working. Fatigue controlmeasures can only temporarily reduce the risk of afatigue-related accident, they cannot eliminate therisk.

The only cure for fatigue is sleep.

Where do you start and which control measures arethe most effective and can assist the employer bymanaging an effective Fatigue System?

Identify the hazards of fatigueAssess the risks of fatigueImplement risk control measures andMonitor and review the effectiveness of thecontrols.

Warning signs to look out for:

Trouble focusing, or narrowing of attention,Head nodding, or inability to keep the eyes open,Not remembering the last few minutes,Poor judgment, slower reaction time,“Zoning out”,Daydreaming and wandering thoughts.Constant yawning or rubbing of eyes.Drifting in the lane

If a driver experiences any of these symptoms whilstbehind the wheel it is very likely that your drivingperformance is already impaired.

Like other risks associated with mining, the risks fromfatigue need to be controlled in order to fulfill theemployers’ duty of care. The fact that individualbehaviour outside of work can have a massiveinfluence on fatigue does not reduce the employers’obligation to address the issue with the principles ofrisk management, including following the hierarchy ofcontrol.

Although there are many controls that can be appliedto the problem, I’m only going to address 3 below:

Napping is the most natural countermeasure againstfatigue and has been shown to reduce many of theperformance impairments caused by sleepdeprivation, sleep restriction and working long hours.

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Symptoms of driver fatigue

Establish a fatigue safety approach

1. Napping

Continue on P23

A look at Health & Safety of Thirdparties on site GerritAugustyn

The health and safety duties of employers or owners ofpremises are not only emphasized by law, but alsosupported by recent judgements in the South AfricanCourts. Let us take a look at a scenario to demonstratethe legal position.The Scenario

Company A is a manufacturer of automotive parts. Theyown a premises in Pretoria on which they have amanufacturing plant. Next to this premises they rent aproperty which they use as an outlet where customerscan purchase automotive parts from Monday to Saturdayduring normal business hours. The Health and Safetymanager is of the opinion that the company only has aresponsibility towards the health and safety of theiremployees, and that this responsibility is limited to thepremises they own and not the outlet that they rent nextdoor.The Incident

A client visited the automotive company’s outlet topurchase automotive spares. He entered the premisesand parked in the designated parking area for visitors.On his way into the outlet the client slipped on the floordue to it being wet after the cleaner washed it. No signwas displayed to warn persons that the floor is wet andcould be slippery. The person severely injured his ankleand had to be transported to hospital where he had toundergo surgery. The Health and Safety manager wasinformed of the incident.The Question

The Health and Safety manager of the automotivecompany received a letter from an attorney representingthe client who sustained the injury due to the fall at theparts outlet. The client is seeking compensation for theinjury. The Health and Safety manager insists that thecompany cannot be held liable for the injury of the clientas they only have a duty towards employees and onlywhere they are the owner of the premises.

The employer’s health and safety duties extendto every-one on site, even unexpected visitors.

Health and Safety duties when you own or rent a property

First we have to deal with the matter of owning or rentingthe property and how this impacts the health and safetyduties of the company. Health and safety legislation inour country does not distinguish between an ownerand/or renter of premises when ensuring a workingenvironment free of risk to the health and safety ofemployees. Whether you own or rent the premises is ofno concern, as the legislative requirement is set in/on allareas where work is carried out to the advantage of anemployer.

Legislation requires an employer to take care ofeveryone’s health and safety and not only employees.This includes contractors, sub-contractors, facilitators,auditors, inspectors, clients etc. On the companypremises the company is responsible for everyone.

The common law principle of take reasonable care isalso important here and applicable to everyone, not onlyemployers. This applies to all areas in South Africa, evenwhen someone visits a mall to go and buy groceries.Health and Safety duties and Case Law

In a recent matter, dating back to 19 August 2009, anelderly woman went to a Dischem Pharmacy in Pretoriawhere she fell and fractured her right hip. She allegedthat one of the Dischem employees was the cause of herfall after bumping into her and subsequently institutedaction for R850 000 in damages against Dischem as wellas the individual employee under the law of torts.

The honourable Judge Hennie De Vos grantedjudgement in favour of the applicant and in making theorder said that any person that worked in a public shopshould do so in a manner as not to endanger others.

Another important matter is that of Niemand v Old MutualInvestment Group Property Investment (Pty) Ltd(35421/2009) [2012] ZAGPPHC 87 (1 June 2012). In thiscase the plaintiff claimed damages from the defendant,the owner of a shopping mall in Pretoria, as a result ofinjuries sustained by the plaintiff when she slipped andfell on a slippery substance on the floor of a loading bayon the premises.

The judge was of the opinion that the defendant was infact negligent in not taking reasonable steps to keep theloading zone properly monitored and clean and in notensuring the safety of anybody entering the area.

Do you have measures and processes in place to showthat you take reasonable care of anybody entering yourpremises and are your employees aware of the possiblelegal implications of third parties entering yourworkplace?

Editors CornerP8

The Causes & Effectsof Incidents - Christel Fouche

PassionateAbout SHEQ!

Causes of Incidents

Incidents can be generally defined as being the result ofunsafe workplace conditions, acts, or poor decisionmaking by someone in the chain of events. Statistics andpractitioners’ opinions about these statistics differ, but it isgenerally accepted that 20% of incidents are a result ofpoor workplace conditions and the remaining 80% arecaused by some form of human error or non-conformance.

Technical equipment (machinery and tools)Articles, materials and substances ( heavy, sharp, toxic)Working environment (lighting, noise, temperature,humidity)Human decision making factors and actions (acts,omissions, carelessness, negligence, errors ofjudgement, poor attitude)

A management system failure in one or more of theseareas causes incidents.

Workplace conditions can be described as the generalstate of the workplace environment.

Although workplace conditions only form 20% of thecausative factors, this is the area that needs the mostattention. The reasons for first addressing conditions arethat risks can be predicted and controlled. It is also far morecost effective to address conditions than to continuouslycontrol acts – i.e. human behaviour.

No matter how informed and competent people are,various factors influence day-to-day behaviour. The mostreliable worker will at some time perform unsafe acts, or failto follow correct and known procedures.You will reduce opportunities for human errors by seeingthat as many risks as possible are controlled byengineering standards.

Human errors are largely unpredictable. Even with the bestinformation, training and monitoring programmes in place,there will be a time when, for whatever reason, someonewill fail to follow the correct steps and procedures.

Common factors that influence human behaviour usuallyresult from one or more of the following deficiencies orerrors:

Lack of knowledge, skill, or abilityPhysical or mental stress, imbalance or incapacityPoor attitude

Poor purchase specifications

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Job Factors

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Poor design and substandard conditionsInadequate maintenanceLack of or ineffective trainingLack of work standardsLack of supervision and mentoringSubstandard practicesFailure to identify hazards and associated risksPoor or absent administrative controls.

TheANSI Code (Z16.2-1962 R1969) classifies unsafe actsand conditions as:

Inadequate guards or protectionDefective tools, equipment, substancesCongestionInadequate warning systemsFire and explosion hazardsSubstandard housekeepingHazardous atmospheric conditions (gases, dusts,mists, fumes, vapours)Excessive noiseRadiation exposureInadequate illumination or ventilation.

Operating without authorityFailure to warn or secureOperating at improper speedMaking safety devices inoperableUsing defective equipmentFailure to use personal protective equipmentImproper loading or placementImproper liftingTaking improper positionServicing equipment in motionHorseplayAlcohol, drugs or other substance abuse.

Incidents affect one or more of the following – individuals,organisations, clients, the general public, the community,and the environment.

The effects may be temporary or permanent and many canbe identified immediately. Health and environmentaleffects may only become evident after a period of time.

SHEQ programme management is a pro-active processwith the focus on containing risk by controlling hazardousconditions.

Well designed and executed inspections identify issuesthat are related to these causes.

Very closely related to this article is my article on Dominoes& Occupational Safety wherein I wrote about the late H WHeinrich’s Domino Effect.5

Unsafe Conditions

UnsafeActs

Effects

P9Business News

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allen@akwa.co.zariette@akwa.co.zaTel: 011 425 1114Fax: 011 425 0228

www.pavermoulds.co.za

Mag Magic today, is a well-established company specialising in the repairs andrefurbishing of Mag Wheels, servicing large corporate companies on a nationalbasis, as well as smaller local clients.

We boast a highly dedicated management team with hard-working employeesdedicated to providing the highest of sales and service excellence to everycustomer, no matter how big or small.

Mag Magic is in continual pursuit of service excellence and is willing to assistcustomers with information or queries to the best of our ability, thus the reasonfor our excellent ongoing business and referrals. After sales service is alsoextremely important to us, in order to maintain strict control of our serviceexcellence policies and customer satisfaction.

Since inception, the company has prospered into an aspiring company,maintaining a steady growth, largely due to positive word of mouth marketingand advertising. "It is an interesting industry and after each day, I feel a greatsense of achievement." The owner developed an engineering backgroundwhilst working for an engineering company for 10 years before venturing outon his own. "Running your own business is hard work, but you know you haveto do your best because you have responsibilities."

Service Excellence

P15MEMBERS AREA

Physical Address:30 Leeuwpoort StreetTown CentreBoksburg,1459

www.magmagicrepairs.co.zamagmagic@absamail.co.za

Tel:Cell:

082 660 5549082 480 7865

Member NewsP16

ITS - Plant Manufacturers and Electroplaters

Fully Automated Plants

Polymer Tanks

With expertise that boasts an unrivalled combination of professionalism, qualityand skill, the approach followed is that which can only translate into excellencefor our clients. Our experience in evaluating our clients’ needs and compilingappropriate solutions to address these and other issues, has only benefited ourclients.

ITS is involved in the manufacture, installation and commissioning ofvarious types of plants.Upgrading and Repairs to existing plants.Boasting a large workshop with all the necessary machinery and trainedworkman to complete any task necessary.Maintenance to existing plants with the ability to manufacture, change andinstall individual items (i.e. pipes, tanks, ducts, scrubbers, etc.).Each client's needs are calculated on an individual basis, thus each solutionis "Tailor Made" to suit the client.Full Documentation accompanies all plant commissioning.

Types of Plants Manufactured and Installed

Continuous Wire Pickling Plants.Pickling Plants.Fumeless Pickling Plants.Plating Plants.Effluent Treatment Plants & Clarifiers.Single Tanks Available on request.

Advantages

Resistant to various corrosive chemicals.Wide temperature range (suitable for hard coat anodising - 32°F/0°C orType II, i.e. 'Hot' anodising - 85°F/29.4°C).Small Thermal Expansion Coefficient - This implies that the the dimensionswill remain constant under varying temperature ranges.Due to the small Thermal Expansion Coefficient, larger units can besupplied thus saving on valuable and often expensive floor space.Can be supplied in varying shapes and sizes to suit the needs of the client.

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Contact Us

Physical Address:

Postal Address:

Tel:Fax:

Email:

Website:

Through the skills andexpertise input of the

two foundingmembers, Anton

(Tony) and Miya, ITS isnow an international

entity that exportproducts abroad on a

regular basis.

13 Derrick RoadSpartanKempton ParkGautengSouth Africa

P.O. Box 9663EdleenSouth Africa1625

+27 11 394 4654+27 11 394 4654

info@its-cc.com

www.its-cc.co.za

ITS is Level 4 BBBEE(Broad-Based Black

EconomicEmpowerment)Contributor.

Plating

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Electro-Barrel Plating

Electroless Nickel Plating

Strip Plating

Electro-Barrel plating has the advantage of being able to plate multipleitems at the same time, which increases productivity and reduces overallcost. The amount of items depend on the size of each item.Currently, ITS does Electro-Barrel Plating in Copper, Nickel and Tin.

Electroless Nickel plating has the advantage of having a smooth evencoating on the plated component and flexibility in plating volume andthickness.

Strip plating is used when the piece of metal to be plated is, well, a strip ofmetal. ITS currently have the technology to do Brass (an alloy of copper andzinc) strip plating. This involves the metal to be plated, to be prepared invarious solutions where they are then plated at various levels, depending onthe clients' needs.

ITS is in the process of setting up a Nickel Strip Plating line, to be able toprovide a wider choice of plating for their customers. The line should be fullyfunctional by the end of 2007.

P15MEMBERS AREA

P17MEMBERS AREA

Contact Us

Physical Address:

Postal Address:

Tel:Fax:

Email:

Website:

Through the skills andexpertise input of the

two foundingmembers, Anton

(Tony) and Miya, ITS isnow an international

entity that exportproducts abroad on a

regular basis.

13 Derrick RoadSpartanKempton ParkGautengSouth Africa

P.O. Box 9663EdleenSouth Africa1625

+27 11 394 4654+27 11 394 4654

info@its-cc.com

www.its-cc.co.za

ITS is Level 4 BBBEE(Broad-Based Black

EconomicEmpowerment)Contributor.

European Antiquesand Furniture

Welcome to the Blue

B e a g l e E u r o p e a n

Antiques and Furniture

website. Our beautiful

showroom in Meyerton

displays our unique

i m p o r t e d a n t i q u e

furniture. The antiques

are imported directly from

countries in Europe,

focusing mainly on The

Netherlands. Should you

be looking for a specific

piece of antique furniture

/ item, which is not

c u r r e n t l y o n o u r

catalogue, we will gladly

assist in sourcing this for

you.

Marianné Botha

082 445 3145

Contact us

Website:

Email:

Cell:

www.bluebeagle.co.za

mariannebotha6@gmail.

com

For personal advice and quotations on furniture, doors,bars, mirrors and frames in any Hardwood or Railway

Sleeper.

Furniture Timber Palace, Meyerton, Gauteng, aSolid Wood Furniture manufacturer, a recognisedname in the South African furniture manufactureindustry.

Furniture Timber Palace (also known as FTP) is afamily run business, that design and manufacturesan upmarket range of Quality commercial anddomestic furniture since 2000, emphasisingfunctionality and design, catering for the

discerning homeowner, Lodges and Guest houses.

7 Meyer StreetMeyerton

016 362 4791

Cell: 082 825 1224

Physical Address:

Website:

Email:

Tel/ Fax:

Cell:

www.ftpvaal.co.za

dewaldpieters@absamail.co.zaftp@telkomsa.net

Member NewsP18

Awnings

There are many benefits to havingawnings installed with the greatestbenefits being energy savings.

Folding Doors

With a little help from WoodenFolding Doors and your ownimagination you can divide aroom such as your lounge toaccommodate a dining room...

Shade Ports

Shade Ports have two designs,Gazebo and Pyramid. The fabric iseasily cleaned, by simply hosing itdown...

Blinds

Patio Blinds Exterior, PatioBlinds Interior, Roman Blinds,Sunscreen Roller Blinds,Wooden Venetians, VerticalBlinds...

Physical Address:116 Christian RoadNuffieldSprings

Tel:Fax:Cell:

011 818 2167011 818 3982082 852 2339

www.effectiveblinds.co.zainfo@effectiveblinds.co.za

The services we provide is formulated to make the experience of installing blinds and awnings easy,comfortable and professional. This is how we do it:

You make an appointment with us at your convenience. After hours is by appointment only.

We visit you in the comfort of your home.We will offer advice borne out of years of experience to assist you in making the right choicesWe measure your windows, doors and skylightsWe custom make your blinds, and awningsWe fit them to perfectionWe will continue to service you in the following manner;Cleaning of blinds and awnings (off site)Repairs of Blinds and awnings both on site (where possible) and off site.Re-covering of awnings.

Contact us todayTel: 011 818 2167

info@effectiveblinds.co.za

www.effectiveblinds.co.za

P19MEMBERS AREA

SA environment lawupdate; November2013 by Edmond Furter

A spate of SA environment lawamendments were made in 2013, withmore due in 2014. Some are enforced bythe DEAEnviro Management Inspectorate(Green Scorpions), some by DOE, DOH,and DOL.

This SA environment law update of November 2013includes new energy, air, dust, water, rail freight andwaste laws, and state strategies.

The Department of Energy (DoE) and their consultantmet in October 2013 to finalise an Energy EfficiencyTarget Monitoring System (EETMS), to enforcemandatory reporting of energy-related data.

Interested parties may comment on the web portal, or ata workshop at the CAIA offices in Johannesburg,Auckland Park, on 26 November 2013 at 09:30 (contactShirley Parker on caiainfo@caia.co.za or 011 482 1671).

DoE wants to track progress on industry’s aspirationalenergy efficiency improvement target of 12% by 2015.

The Department of Energy has five energy efficiencystrategies, intended to provide the lowest cost options toreduce energy consumption, improve energy security,global competitiveness, and job creation.

Innovations have been introduced for municipal streetlighting, public buildings, solar water heaters andimprovements in industrial efficiency.

The South African National Energy DevelopmentInstitute (SANEDI) manages most of the implementationaround energy efficiency and data.

SA Parliament’s Energy Portfolio Committee held publichearings on nuclear energy as a reliable source ofsupply. Nuclear energy is one of the components of theIntegrated Resource Plan, a 20-year national electricitygeneration plan, due for interim review this year, whichseeks to direct the expansion of the current fleet of powerstations.

The plan emphasises security and readiness of supply atthe right time, reports the Parliamentary MonitoringGroup. SA electricity consumption last year increased by

Comment on mandatory energy use reporting

SAhas five energy efficiency strategies

Nuclear energy and risk management

1.7%.

Academics in the energy sector suggested thatmanufacturing was capable of supporting an extendednuclear programme, and believed that more than tworeactors were needed, with the added benefit ofincreased job creation, but stressed that properscheduling was vital, as well as “correct communication”.

The Nuclear Energy Corporation (NEC) noted thechange in world energy perspectives after Fukushima,with heightened risk mitigation leading to increasedcosts, and longer timelines. Better global governance ofsafe and environmentally-friendly energy sources isneeded. Interestingly, the oil-rich countries are opting fornuclear power in their plans.

Fossil fuels are likely to account for about 80% of energyuse until around 2040, with more emphasis on naturaland shale gas, but there will also be increased coalconsumption until after 2030.

SouthAfrica is currently the only major player inAfrica onnuclear generation, although other countries areshowing greater political commitment and appetite fordevelopment.

Those opposed to the nuclear industry expressed theirconcern that insufficient time was allotted to informingParliament of the dangers, risks, and pitfalls of nuclearpower, including concerns on evacuation plans, disposalof nuclear waste, and review of the plan.

The Department of Mineral Resources has called forcomment on proposed Regulations to close gaps in the

regulatory framework forHydraulic Fracturing (fracking)and to p resc r i be goodinternational industry practicesand standards for safeexploration and production ofpetroleum.

Technical Regulations for Petroleum Exploration

SA environment law updateP20

Power from trees and waste

Environmental Implementation and ManagementPlans guide

Pipeline Levies

Coastal and protected areas Bills

Process Controllers and Water Services Works

National Dust Control Regulations in force

Blending of diesel and petrol with biofuels will bemandatory from October 2015. Hendrina Power Stationof Eskom is first to use a fuel oil and waste oil blend.

The Department of Environmental Affairs called forcomment, in terms of the National EnvironmentalManagement Act, on the draft third edition Guidelines forEnvironmental Implementation and Management Plans,intended for national and provincial departments onpreparation and implementation of environmentalmanagement plans in terms of the procedures forcooperative governance.

The National Energy Regulator of South Africa called forcomment on proposed levies for the piped gas andpetroleum pipeline industries for 2014 -2015. Levies areeffectively reduced compared to the previous cycle andwill be 37.930 c/Gj and 0.40437 c/litre respectively, fromApril 2014.

The National Environmental Management Act:Integrated Coastal Management and Protected AreasAmendment Bills were approved by the NA Committee,with some changes.

The Department of Water Affairs has called for commenton Draft Regulations relating to Compulsory NationalStandards for Process Controllers and Water ServicesWorks, provided for by Section 9(1) of the WaterServices Act. A correction notice was also published forthese draft Regulations.

In terms of the National Environmental Management: AirQuality Act, this regulation covers residential and non-residential areas with an acceptable limit of 600

mg/m2/day and 1200 mg/m2/day respectively. Dustfallmonitoring programmes, dustfall control and reportingmay be required by an Air Quality Officer if deemednecessary.

In terms of the National Environmental Management: AirQuality Act, 2004, small boilers have been declared ascontrolled emitters and emission standards have beenestablished.

In addition, the Pressure Equipment Regulations willsoon be amended by the Department of Labour.

Regulations prescribing the format of the atmosphericimpact report, required in terms of the NationalEnvironmental Management: Air Quality Act, have beenpromulgated.

The Department of Economic Development willintroduce the Infrastructure Development Bill toParliament to provide for public infrastructure as adevelopmental priority.

National Norms and Standards relating to environmentalhealth in terms of the National Health Act, are inpreparation following public comment.

Proposed regulations to phase out the use ofpolychlorinated biphenyls (PCB) materials andpolychlorinated biphenyl (PCB) contaminated materials,are in preparation following public comment. Proposedregulations for phasing out and management of ozonedepleting substances are also in preparation, followingpublic comment.

Small boilers are controlled emitters

Atmospheric Impact Prescription in force

State infrastructure takes priority

HealthAct sets environmental standards

PCB phase-out regulated

P21SA environment law update

Containers for recycling must be certified ‘empty’

Rail haz goods standard to change

Water quality standard amended

Carbon tax makes way for trade in Oz

New water laws

SANS 10405ED2: 2013 on Transport of dangerousgoods; Reprocessing of previously certified packaging,will soon be updated.

Used containers like metal or plastic drums offered forreprocessing or reconditioning must be ‘nominallyempty’, as far as possible by normal draining, pouring,pumping or aspirating.

Containers of division 6.1 substances, classified inaccordance with SANS 10228, are deemed nominallyempty if triple-rinsed with an effective solvent, or cleanedby a method proved to achieve equivalent removal.

The South African Industrial Container ReconditionersAssociation (SAICRA) requested users to clear wasteresidue in packaging, and not to pass on residual wasteto recyclers.

SANS 10406 for Transport of dangerous goods;reprocessing of previously certified packaging, alsorequires that the party providing the previously certifiedpackaging sign a ‘nominally empty packaging’ certificatewith each offer.

An example of the certificate is supplied in Annexure B ofthe standard. Responsible Care supports the request,and will audit signitories accordingly.

S A N S 1 0 4 0 5 E D 2 : 2 0 1 3 ,Transport of dangerous goods byrail; Operational and designrequirements and emergencypreparedness, will soon beamended. Comments haveclosed.

SANS 9297.2013 Edition 1.2, Water quality;Determination of chloride – Silver nitrate titration withchromate indicator (Mohr’s method). Consolidatededition incorporating amendment No 2, was amended toupdate referenced standards.

After a year of carbon taxation,Australia could switch to anemissions trading system by mid-2014. The initial carbon tax was setatA$23 per tonne.

Department of Water Affairs, National Water Act;National Water Policy Review. Olifants Water

Management Area: Limiting the use of water for urban,irrigation and industrial (including mining) purposes fromthe Middelburg Dam. Revision of general authorisationsin terms of section 39 of theAct.

Department of Water Affairs, National Water Act;Proposed declaration of the exploration for and orproduction of onshore unconventional oil or gasresources and any activities, including hydraulicfracturing as a controlled activity.

Business NewsP22

And so 2013 are bidding us

farewell.

What a year. Although this might be theyear that has flown past faster than any

before, this has also been the year wherepeople seem to be more exhausted than

before.

We would like to wish all our membersand their families a blessed Christmastime and a happy new year. May youenjoy this time to come and get some

much deserved rest.

Please travel safely and we’ll seeyou again in 2014.

Management & StaffERCOC; Chamberlink & Cenfed

Please note:

Our offices will close onFriday 13 December @

15:00

and will re-open onMonday 6 January @ 7:30.

From P4

Consult ing profession toregulate consulting fees

Health and safety consulting at Level 7 to 10

Consulting debate

“There is no yardstick other than self-worthassessment yet. Professional rates should be linkedto the four Skills Levels as described in the SAStandard for Classification of Occupations. In termsof this standard, professionals function at skills level 4(NQF level 7 to 10).

“Consultants not meeting these levels of competenceshould not be allowed to charge the same rate, butalso not reduce rates below the value of a person atSkills level 3, of Professional Technicians.

“In a free economy, price is based on supply anddemand, but without regulation of a profession, wewill have a wide range in pricing structures. What theprofession need is education in the process ofcosting, knowledge of what is deemed sellableprofessional knowledge, and what is not.

“As an example, travel time is often charged andbilled at professional ‘consulting time’ rate. Travellingtime should be charged at the rate for the skillsneeded to drive a vehicle, plus the rate per km for thetype of vehicle used as determined by SARS or theAA,” writes Maritz.

The South African state has in the last financial year,spent R33.7b on consultants, and many more billionsin recent decades. This has been attributed to anexodus of technical skills over the last two decadesfrom government to the private sector.

The auditor general is investigating the use ofconsultants by municipalities. Parliament’s StandingCommittee on Public Accounts (Scopa) has alsoexpressed concern over the excessive use ofconsultants by various government departments.

Community Agency for Social Enquiry (CASE)Executive Director Mohamed Motala said that someprojects could be handled in-house, without involvingconsultants.

Consulting Engineers South Africa (CESA) officialWally Mayne said government needed consultants.“We need to categorise consultants… lawyers andaccountants are also consultants, but they areactually referred to as consultants.

“Engineers in the building industry, like architects andquantity surveyors, are lumped with consultants. Yetwe deliver a valuable service. Without us,government couldn’t achieve building infrastructure.They genuinely do not have those skills.”

• Sources; NIOCCSA. City Press. EWN.

From Page 7

Fatigue – Sleep is not cheap!

How long should I nap for?

Short naps of 20-30 minutes in duration canprovide measurable increases to alertness andperformance that can extend for up to a few hours.(These naps can be taken during tea breaks andlunch times)

Caffeine has been shown to be an effective controlmeasure to fatigue by temporarily increasingalertness, sustaining wakefulness and delayingsleep onset. Caffeine is available in various forms(coffee, tea, energy drinks, chocolate, over-the-counter tablets, etc).

The combination of a short nap (20 – 30 minutes)with caffeine (150 – 200mg, or the equivalent oftwo cups of coffee) has been shown to have themost beneficial effect for increasing alertness andimproving performance up to a few hours.

Sleep experts and the Sleep Foundationrecommend taking caffeine just before a short napin order to get the benefit from bothcountermeasures. The caffeine will take 15 – 30minutes to enter the bloodstream, during whichtime an operator has an opportunity to sleep.Upon waking, the operator will have the alertingbenefits of sleep and the additional benefits of thecaffeine.

Everyone should be involved in making theFatigue Management Plan happen. The morepeople who are involved, the more support therewill be for the improvements.

2. Caffeine

3. Caffeine and Naps

Participation in managing fatigue is important

P23Business News

From Page 6

How to identify a dodgy ISO orOHSAS auditor

What about the Road Traffic

6. The auditor does not interview top managementas part of the audit.

Act, Hazardous ChemicalAct and other Environmentallegislation? If you comply with the OHS Act and/orMine H&S Act it does not mean you are legallycompliant. It means you are legally compliant to onlythat specific law.

The ISO/OHSAS standards are about auditingmanagement. It starts with management commitmentand ends with management review. A substantial partof the audit is to verify senior managements’ role andresponsibilities; appointments; knowledge ofobjectives & targets; identifying continualimprovement opportunities; communicating on SHEQand ensuring competent employees through provisionof adequate resources are provided.

If interviews with senior management including theCEO/MD/MM have not been done where is the proof ofactually auditing the management system effectivelyand how can the organization then be put forward forcertification if this critical area was not covered?

7. The auditor comes to the audit without thenecessary and/or required PPE.

8. The OHSAS auditor arrives on site for theopening meeting, not having time to completeinduction training prior to the start of the audit.

9. The OHSAS auditor cannot find their ownregistration cards/certificate of proof that they areregistered with a registration body.

10. The auditor demands proof of a managementreview “meeting”.

It is like going to a rugby or soccer match without yourgear. It should be standard for every ISO/OHSASauditor to have their own PPE kit that canaccommodate 80% of the health & safety situations onsite. Bear in mind that some sites would want to issuetheir own PPE because of issues such ascontamination of their product, legal complianceissues or a requirement to hand in the PPE after use.

If you want the work as an auditor, you need to plan forlogistical issues such as traveling time and induction.You cannot expect the client to be happy if you interruptyour audit to do induction training at a later stage or bein a dilemma where you cannot go on site to verifycertain documentation issues because you did not doinduction.

It should not take longer than 10 minutes for aregistered auditor/lead auditor to either show you onthe SAATCA/IRCA/RABQSA websites that they areregistered. Should these sites be off-line then thecertificates or cards proving they are registered shouldbe shown and available on their laptops. If it takeslonger than 10 minutes, you must know there is aproblem. Preferably this verification should have beendone one month prior to the ISO/OHSAS auditorsetting foot on your site.

The standards do not indicate that it must be in the formof a “meeting” if you have proof of the inputs andoutputs being communicated, discussed andapproved via e-mail – it should be acceptable.

Business NewsP24

NEW WEAR RESISTANT COATING LAUNCHED

Our Company has developed and is launching a new wear resistant

coating to the pump industry.

The new coating, known as W.A.I.R (Wear And Impact Resistant), has

been developed over the last 12 months by Carlmach Engineering cc and

Kingbat Empire Trading (Pty) Ltd, based in Springs, Gauteng.

Carlmach Engineering – Sales and Marketing Manager, Stan Van Rooyen,

explains that this coating can be applied to most components and

materials e.g. mild steel, stainless steel, cast iron and tool steel. Re-

conditioning of certain components can also be undertaken.

“We have targeted the Pump Industry, where wear rings and shaft

sleeves tend to be a major problem in this industry,” says Van Rooyen.

He explains that the thickness of the coating can be varied according to

customer specifications, for example, from 2mm to 5mm or more.

“Our tests have shown that 3mm is adequate for most applications and

tests have also shown a hardness of between 60 and 65 Rockwell and no

brittleness whatsoever. Therefore, no cracks or distortion will occur. The

coating has passed the acid and salt test, therefore, it is corrosion

resistant,” says Van Rooyen.

In highly corrosive applications, the coating can be applied to stainless

steel tubing for sleeves and stainless steel plate for wear rings.

The rings and sleeves are manufactured from raw materials to finished

products at the Springs facility.

The coating process is undertaken on a machine designed and

manufactured by the companies and is fully computer controlled. A

Patent on the machine and the coating process is pending at present.

- Conventional and CNC Machining

- CNC Turning

- General Engineering

We provide quality work and also work on CAD-CAM and Master Cam

Systems. Therefore, we are able to design components to customer

specifications.

For more information, please call

Stan Van Rooyen 0472 414 0218 (Sales and Marketing)

Carlos Caeiro 082 938 6406 (Owner of Company)

Email: carlmach@iburst.co.za

Company Profile- Carlmach Engineering cc

THE CUSTOMER MAY BE KINGOR QUEEN...

BUT NOT ALL CUSTOMERS ARE

CREATED EQUAL

Do you treat all customers the same or do

you treat them differently? Do you know

which clients generate substantial sales and

more importantly, which customers

generate substantial profits and cash flow?

In order to determine the relative

importance of your customers, rank each

customer in terms of the following criteria:

1) Sales

2) Profitability

3) Payment history

How much and how regularly does the

customer spend money with you? Is sales

revenue stable, increasing or declining?

What is the sales revenue per month over 12

months or more? To calculate sales

revenue, we first identify the products sold

and then the number of units of a product

sold x selling price per unit, we then deduct

any discounts granted.

Look at profitability by product purchased

and then adjust/ reduce for discounts,

delivery and returns. When we talk about

client profitability we are referring to gross

profit. Gross profit is equal to sales less the

cost of buying or manufacturing stock.

The calculation of the cost of sales for a

wholesale or retail business is very different

to that of a manufacturing business.

Wholesale or retail business

In the case of a wholesale or retail business,

the actual cost of a product is the purchase

1) Sales

2) Profitability

price less any discounts received plus all

costs incurred in getting the product to your

warehouse or store (transport, insurance,

import duty, equipment hired or purchased

to unload, the cost of labour used to unload

stock etc).

Manufacturing business

In the case of a manufacturing business, the

calculation of the cost of sales is much more

complex as one has to take into account

direct material, direct labour and other

manufacturing overheads.

Direct material – forms part of the

final manufactured product, eg.

wood used in a table, and the

quantity used varies with production

volumes (you use twice as much

wood for two tables as you would for

one).

Direct labour – is the labour

physically applied to manufacturing the

product.

Manufacturing overheads – include

all manufacturing costs except

direct material and labour.

Indirect material – does not form

part of the final manufactured

product eg. cleaning materials or

materials whose cost is so small that it

is not worth calculating eg cotton for

sewing a suit.

Indirect labour – cannot be directly

linked to the final product eg the

factory supervisor or people who

m a i n t a i n a n d s e r v i c e t h e

machinery.

Factory rental

Rates and taxes

Water

Electricity

Insurance of the factory and stock

L e a s i n g o f m a c h i n e r y a n d

equipment

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Business NewsP26

StevanDelportSteven is the founder ofInteger Consulting Solutions.

He is a facilitator on anumber of the leadershipdevelopment programmesand coaches current MBAstudents at Wits BusinessSchoo l , lec tu res MBAfinance at Mancosa andwrites for Entrepreneurmagazine.

For more informat ion,p l e a s e v i s i twww.integerconsultingsolutions.com

THE CUSTOMER MAY BE KING OR QUEEN...

BUT NOT ALL CUSTOMERS ARE CREATED

EQUAL

� Depreciation of machinery and equipment

How do the credit payment terms compare to other

customers? Look at the frequency and ease with which you

are paid for your products and services. If you are paid late

and have to follow up frequently with regards to payment,

this adds to your costs and should be used to adjust the

customer profitability mentioned above. The key question

here is: “Are the credit terms reasonable for that customer

and are you paid on time in terms of the agreed credit

terms?”

You have already identified your key customers who

generate the majority of your sales and profits. How many of

these are your late or bad payers?

From your categorisation you now have customers which

roughly fall into the following categories:

premium

intermediate

marginal

Is there over reliance on any of your premium customers?

Would the livelihood of your business be threatened if one of

these customers closed down or moved their business

elsewhere? If the answer is “Yes”, then you firstly need to

ensure that these customers are exceptionally well looked

after and secondly that you actively identify and target

potential new premium customers so that your reliance on

your current key customers is reduced.

Now assess those customers in the intermediate and

marginal categories with a view to determining their

potential future revenue and profit potential for your

3) Payment history

�

�

�

business. Do they buy exclusively from you or occasionally

from you? Are their businesses well managed?

How many of the intermediate and especially marginal

customers have substantial future revenue potential?

1. premium – in terms of existing revenue spend

2. intermediate – with good opportunity for future

revenue and profit growth

3. intermediate – with little opportunity of future sales

and profit growth

4. marginal – with good opportunity for future growth

5. marginal – with little opportunity for future growth

In categories 1, 2 and 4 you need to ensure that the

relationship and service levels are maintained or improved

still further. You should develop the relationship at multiple

levels within the customer.

In category 3 the relationship and service levels should be

maintained or possibly reduced.

In category 5 you need to exit or improve profitability. Since

sales volumes cannot be increased, then the way to

increase profitability is to:

1. increase prices and/ or reduce discounts

2. reassess the credit terms

3. strictly enforce payment terms

4. do not accept returns

5. establish a minimum value for goods to be delivered

or charge for delivery

reduce the number of client calls made or limit customer

contact to phone calls

You should now have the following clients:

P27Business News

Business NewsP28

Economic growth in South Africa : a 20-year review

With the twentieth anniversary of the transition to a democratic dispensation in South Africa imminent, it isbecoming the in thing to evaluate the country's progress during this period, particularly in economic terms.Measured against average standards of living as reflected in real GDP per capita, South Africa appears tohave done quite well, with an increase of 33% since 1994.

However, this is not the full picture. Firstly, South Africa does not compare favourably with its peers. Duringthe same period the GDP per capita of emerging markets and developing countries increased by 115% onaverage. Brazil, India, Indonesia and Turkey, for example, all fared much better than South Africa.

Secondly, not all South Africans shared to the same extent in the increase in GDP per capita, as is evidentin a relatively high GINI coefficient of between 0,6 and 0,7, depending on how it is calculated, and anunemployment rate of approximately 40% in terms of the wider definition.

The primary importance of high economic growth for South Africa's future, with the emphasis on thecorrelation between growth and employment to address poverty, is being acknowledged increasinglyacross ideological boundaries. Although economic growth is not the absolute answer to all South Africa'sproblems, it is inconceivable that large-scale unemployment can be addressed without a drastic expansionof the economy. The differences of opinion evolve around how to achieve this.

The accompanying graph shows a sustained acceleration in economic growth from 1994 to 2007, exceptfor the period 1998 to 2002 as a result of the then crisis in emerging markets, the millennium effect and theworldwide economic slowdown early in the previous decade. The accelerated growth followed on aninternational slump and a fairly severe drought in the early nineties and can therefore not be attributed onlyto the political transition in 1994.

To my mind, the main reason for the improvement in South Africa's growth performance after 1994 lies inthe lifting of economic sanctions and the subsequent reintegration of the South African economy with the

Economic Commentary

Jac LaubscherGroup Economist4 December 2013

P29Business News

global economy. Although the lifting of trade sanctions was important (the volume of exports plus importsdid increase by 65% from 1991 to 1998), with an accompanying improvement in productivity as a result ofgreater global competition, it was the lifting of specifically financial sanctions that made the criticaldifference.

This resulted in South Africa having unrestricted access to foreign capital for the first time since 1985 andconsequently being able to allow a deficit on the current account of the balance of payments. Although thefive years preceding 1994 were characterised by an enforced surplus on the current account of on average1,6% of GDP, the following five years showed an average deficit of 1,2% − a reversal of 2,8 percentagepoints. Since then it has increased further and is currently more than 6% of GDP.

The second marked feature of the economic growth performance since 1994 was the sustainedacceleration in private sector investment from 8% of GDP in 1992 to 14% in 2008, after which it levelled offat 13% of GDP in response to the recession – see the accompanying graph. This shows that the allegationof a private sector investment strike does not hold water. The public sector only followed later but hasnevertheless also shown a remarkable acceleration in capital spending since 2002.

Several factors have contributed to this trend: new business opportunities, increased competition, apredominantly business-friendly and fairly predictable policy environment up to 2007, and a reduction inthe cost of capital in response to lower inflation and the consolidation of the government's financialposition. Measures to promote the transformation of the economy, for example black economicempowerment, affirmative action and stricter labour legislation, have been accepted as imperative forstability and offset in business models, in spite of the fact that they have increased the cost of doingbusiness.

Economic Commentary

Jac LaubscherGroup Economist4 December 2013

Business NewsP30

A third distinct phenomenon over the past 20 years has been the shift in the relative importance of variouseconomic sectors and the underlying reasons for this. It shows, for example, the difference new industriescan make, with the cellphone industry contributing to an increase in the transport and communicationsector's contribution to GDP from 6,7% in 1993 to 10,1% in 2012.

It also shows the importance of competitiveness: The financial, property and business services sector,which has time and again been rated highly in global competitiveness comparisons, increased its sharefrom 17,2% in 1993 to 24% in 2012. This is also the sector that has possibly benefited most fromtechnological development and has been least disrupted by labour unrest. The negative side of the financialsector's good performance is that it is partly based on a sharp rise in debt levels, especially as far ashouseholds are concerned, which is not repeatable.

These trends also emphasise the finiteness of natural resources, with the mining sector's contribution toGDP declining from 11% to 5,5%. The contribution of the manufacturing sector, which along with miningwas hardest hit by labour instability and infrastructure bottlenecks, has also decreased: in 1993 it was 19%compared with 17,2% in 2012. If the stabilising influence of food and liquor production is ruled out, thepicture is much worse.

The above graph shows how the South African economy lost momentum over the past five years. Thistrend is certainly worrying, especially if one considers that the decade-long continued improvement in SouthAfrica's terms of trade has come to an end and is moving in the opposite direction. It is therefore notsurprising that the government, judging by its pronouncements, is becoming concerned about the lowgrowth and employment figures.

The risk is that it could resort to counterproductive action in an attempt to improve the growth rate, forexample extending the role of government enterprises or interfering in die allocation of capital. To my mindthe expectation that a social pact between the government, business sector and unions is the answer, isoveroptimistic as it is based on a poor understanding of the drivers of private investment.

Although sound relations between the parties concerned will naturally have a positive effect on the businessclimate, this is not how businesses decide whether or not to expand their operations. Economic growth isnot achieved by agreement, but by creating favourable conditions for it to occur. This is clearly illustrated bythe lack of success of the Growth and Development Conference held in 2002.

The acceptance of the profit motive as the most powerful incentive for private economic activity holds thekey. It will be much better for the state to align its developmental objectives with the private sector's naturalpursuit of higher profits than to expect businesses to put the profit motive aside for the sake of socialobjectives.

We want to encourage East Rand Chamber of Commerce Members to submit yourcompany newsletters (up to 2 x A4 pages) so we can add them to the Chamber

Bulletin.

Please send all newsletters tobulletin@chamberofcommerce.org.za

The Chamber Bulletin is sent to all DATADEX members and Newsletter subscriberswhich brings the total to more than 20 000 viewers.

Economic Commentary

Jac LaubscherGroup Economist4 December 2013