BRIEFING TO THE PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT 05 AUGUST 2015

BRIEFING TO THE PORTFOLIO COMMITTEE ON

SMALL BUSINESS DEVELOPMENT

05 AUGUST 2015

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Legislative Mandate Strategic outcome oriented goals Medium Term Strategic Framework Departmental Budget allocations Skills Development Programmes

• Production Workshops and Agriculture• Market Delimitations• Market Opportunities: service providers• Skills Development Implementation Model• Skills Development Delivery Areas• Offender skills development in production workshops• Offender skills development in agriculture

Responses to issues raised by the Committee Conclusion

OUTLINE OF PRESENTATION OUTLINE OF PRESENTATION


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Legislation Mandates and Other Policy MandatesLegislation Mandates and Other Policy Mandates

A. Constitutional Mandate

- The Constitution of the Republic South Africa (Act 108 of 1996),

B. Legislative Mandates- Correctional Services Act 1998 (Act No. 111 of 1998), as amended- Correctional Matters Amendment Act (Act No.5 of 2011)- Criminal Procedure Act, 1997(No. 51 of 1977)- Child Justice Act (Act No. 75 of 2008)- The Promotion of Administrative Justice Act, (Act 3 of 2000) as amended- The Health Act (Act No. 61 of 2003)- The Mental Health Care Act (Act No. 17 of 2002)- Prevention and Combatting of Torture of Persons Act (Act No.13 of 2013)

C. Other Policy Mandates- The White Paper on Corrections in South Africa - The White Paper on Remand Detention Management in South Africa- National Development Plan Vision 2030


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STRATEGIC OUTCOME ORIENTED GOALS

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Strategic Outcomes Oriented Goal 1

Remand detention processes are effectively managed by ensuring that remand detainees attend courts as determined by relevant legislation and are held in secure, safe and humane conditions, and provided with personal wellbeing programmes; and relevant services are provided to Awaiting Trial Persons (ATP’s), thus contributing to a fair and just Criminal Justice System (CJS).

Goal Statement Provide an effective management of remand processes by ensuring that remand detainees participate in court processes, and are provided with safe, secure and humane accommodation and psychological, spiritual and health care needs; and Awaiting Trial Persons (ATP’s) are electronically monitored.


All sentenced offenders are being incarcerated in safe, secure and humane facilities and are provided with health care needs, and effective rehabilitation programmes in line with their Correctional Sentence Plans (CSP) to enable their successful placement into society after their lawful release.

Goal Statement Offenders are incarcerated in safe, secure and humane accommodation and are provided with rehabilitation programmes in line with identified needs in correctional sentence plans, through improved offender literacy, educational skills, psycho-social, spiritual and health care needs.


Offenders, parolees and probationers are successfully reintegrated back into their society as law-abiding citizens through provision of social reintegration programmes

Goal Statement Provide services and interventions that will contribute to the reintegration of offenders as law abiding citizens into communities by ensuring that offenders, probationers and parolees are rehabilitated, monitored and accepted by communities.


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MTSF 2014- 2019 INDICATORSPerformance Indicator

Baseline Targets

2015/2016 2019/2020

Percentage of sentenced offenders subjected to correctional programmes

60% (55 644/92 742)

68%(64 452/94 778)

80%(81 060/101 324)

Percentage of parolees without parole violations

79.6% (38 768/48 703)

95%(55 567/58 492)

97%(79 710/82 175)

Percentage of probationers without violations

80% (13 560/16 950)

94%(17 443/18 556)

97%(23 025/23 737)


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ENE 2015 ALLOCATIONS PER REGION AND PER PROGRAMME

` Adminis-tration

Incarce-ration

Rehabilita-tion

Care Social reinte-gration

Total

R'000 R'000 R'000 R'000 R'000 R'000

Head Office 1 456 906 3 895 230 88 936 37 159 113 671 5 591 902

Sub-Total Centralised Funds 60 155 3 561 724 0 0 44 226 3 666 105Staff and office accomodation 39 237 969 224 0 0 44 226 1 052 687

Sub-total PPP Prisons 0 1 021 188 0 0 0 1 021 188PPP Index - Current fee 0 825 923 0 0 0 825 923PPP Index - Capital fee 0 195 265 0 0 0 195 265Municipal Services 20 918 795 524 0 0 0 816 442Capital works 0 775 788 0 0 0 775 788Sub-Total Region Funds

2 240 369 9 185 628 1 063 057 1 759 103 777 525 15 025 682Gauteng 345 276 2 058 337 240 700 486 894 135 878 3 267 085Western Cape 462 694 1 682 854 261 599 330 514 171 112 2 908 773Eastern Cape 356 204 1 309 338 131 416 232 419 84 921 2 114 298

KwaZulu/Natal 288 732 1 638 106 147 739 307 359 119 039 2 500 974LMN 413 560 1 233 318 140 485 188 722 160 187 2 136 271Free State/NC 373 904 1 263 676 141 119 213 195 106 388 2 098 281Total 3 697 275 13 080 858 1 151 993 1 796 262 891 196 20 617 584

Of which the following sub-programmes are centralised in Head Office


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ENE 2015 ALLOCATION PER REGION AND PER ECONOMIC CLASSIFICATION

Region Compen-sation of Employees

Goods and Services

Transfers Payment for Capital Assets

Total

R'000 R'000 R'000 R'000 R'000Head Office 1 149 056 3 488 270 87 376 867 200 5 591 902

Sub-Total Centralised Funds

0 3 062 891 0 603 214 3 666 105Office & staff accomodation 0 1 052 687 0 0 1 052 687Sub-total PPP Prisons 0 1 021 188 0 0 1 021 188Capital works 0 172 574 0 603 214 775 788Municipal Services 0 816 442 0 0 816 442Sub-Total Region Funds 12 885 038 1 992 567 33 097 114 980 15 025 682Gauteng 2 668 052 561 441 6 378 31 214 3 267 085Western Cape 2 507 538 367 728 9 322 24 185 2 908 773Eastern Cape 1 826 246 255 542 2 461 30 049 2 114 298KwaZulu/Natal 2 157 638 324 519 5 657 13 160 2 500 974LMN 1 895 982 231 629 3 594 5 067 2 136 271

Free State/NC 1 829 582 251 709 5 685 11 305 2 098 281Total 14 034 094 5 480 837 120 473 982 180 20 617 584

Of which the following GFS items are centralised in Head Office


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The Department of Correctional Services offers skills

development programmes and services that aim not only to

equip offenders with marketable skills and knowledge but also

to inculcate positive attributes and attitudes which would

encourage offenders to jettison undesirable behaviour and

embrace norms and morals acceptable in the society.

Furthermore, to encourage the establishment of SMME’s by

offenders once released rather than only focusing on securing

employment.

SKILLS DEVELOPMENT PROGRAMMES


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Mission- to support the Departmental mission through the provision of products and services for offenders’ development and to reduce government expenditure.

Primary Mandate

•To fulfil the purpose of the correctional system in terms of Correctional Services Act, Act No 111 of 1998, as amended, (Section 3(2)(b) ” The Department must as far as practicable, be self-sufficient and operate according to business principles”. The Department has the responsibility, to ensure that offenders are appropriately skilled in market-related skills. Furthermore, Paragraph 4.4.8 of the White Paper on Corrections (2005) states that “the department must strive to develop commercial viable enterprises”.

• To supply products that are manufactured in the production workshops to other governments departments as regulated in Section 133 of the Correctional Services Act, Act No 111 of 1998, which states: “All government departments must, as far as practicable purchase articles and supplies manufactured by sentenced offender labour from the Department at fair and reasonable prices as may be determined by the Minister of Finance”.

PRODUCTION WORKSHOPS AND AGRICULTURE


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The objectives of production workshops and agriculture:

• To enhance self-sufficiency and generate income/revenue for government.

• To create work opportunities for offenders and skills utilization of offenders.

• To contribute to the development of offenders, to use agriculture production and workshop manufacturing processes to impart skills and work ethics that will expose offenders to the norms and requirements/expectations of the workplace.

• To promote self-employment of offenders upon their release.

There are 21 farms (mix farming – animal and plant production as well as 92 small sites (vegetable production). Furthermore, there are 19 textile, 10 wood and 10 steel workshops, 1 shoe factory as well as 6 bakeries.

PRODUCTION WORKSHOPS AND AGRICULTURE


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DCS receives first priority in the provision of products/items. Surplus products/items and/or capacities (not needed for self-sufficiency purposes) will be made available to produce/manufacture products/items for other government departments and their officials at a cost.

The market for DCS is restricted to:

DCS- Self-sufficiency: (The aim is to supply all the needs of the Department of Correctional Services that can cost effectively be manufactured / supplied by the various workshops and farms),

Government Departments: (includes all the departments and administrations as listed in Annexure 1, column 1, of the Public Service Act no 111 of 1984),

Other (Clubs, Messes and personnel of DCS and other Government Departments) and

All Parastatals & institutions that are classed as boards of control (statutory institutions) under control of the above-mentioned Departments, forms part of the broader government.

The pricing of self-produced products/items are in accordance with a price and tariff structure as approved by National Treasury, from time to time.

MARKET DELIMITATIONS


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Supply of production inputs to the Department such as:

• Agriculture: -animal feed, medicines, fertilizers, seeds, seedlings, agro-chemicals, machinery and equipment, etc.)

• Wood, boards, steel, textile material, machinery and equipment, baking ingredients for bread, etc.) that are used in the production workshops and agriculture - procured externally, in accordance with SCM prescripts

Supply of goods and services to the Department such as: perishables, office supplies etc.

The procurement of most of these inputs are decentralized in regions, and management areas

MARKET OPPORTUNITIES FOR SMME’s


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TYPE OF SERVICE REQUIRED PURPOSE

Training To train offenders on entrepreneurial skills to assist them to start their own businesses upon release.

Cooperatives Establishment of cooperatives for offenders especially parolees in order to make a living for themselves.

Funding Funding for soon-to be-released offenders/ parolees to be assisted with funding to start small businesses and cooperatives.

Start-up kits Assist offenders with start-up kits, i.e, toolboxes, equipments, business templates etc. in order to make it easy for them to start their own businesses.

EXISTING OPPORTUNITIES FOR SMME AS PARTNERS IN DCS FOR BENEFIT OF OFFENDERS & PAROLEES


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The Skills Development Directorate is planning to host an Exhibition & SMME Event whereby all relevant external stakeholders which include amongst others SEDA, DTI, QCTO, SETAs, Department of Small Business Development etc. will be invited to take part in the event. The purpose of the event is to :

market offender skills by showcasing artefacts/ items manufactured by them to potential business partners/ sponsors once released.

Partner with relevant business institutions who can assist with SMME development.

Support offenders to venture into SMMEs and Cooperatives upon their release.

Forge a partnership with Community Liaison in order to assist parolees to form cooperatives through government agencies like SEDA, Foundation of African Business and Consumer Services(FABCOS) etc.

Forge strong partnerships will all relevant business institutions and organizations to promote SMME and Cooperatives to assist offenders upon their release.

INITIATIVES TO PROMOTE SMME FOR OFFENDERS


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SKILLS DEVELOPMENT : IMPLEMENTATION MODEL

Offenders who meet entry

requirements recruited for

skills development programmes, i.e. NATED programs,

skills programs & Unit

Standards

Offenders enrol in Skills

training programmes, i.e. Vocational Skills Training,

Basic Occupational Skills Training

Offenders enrol in Technical Vocational

Education and Training(TVET)

College programmes, i.e. NATED &

National Certificate Vocational

Offender assessed and declared competent upon finishing the

training programme. Issued with a trade

certificate or certificate for completed skills

programmes.

Offender issued with National N Diploma

upon completing two years practicals/

workplace experience or NQF Level 4

certificate

Top up on Entrepreneurial

programmes through

accredited training

providers, DHET or other

relevant education and

training institutions

This model encourages offenders to venture into entrepreneurship upon release, hence partnership with the

newly formed Department of Small

Business Department is essential


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BASIC OCCUPATIONAL SKILLS PROGRAMMES – short courses in consultation with SETAs

VOCATIONAL SKILLS PROGRAMMES – skills leading to attainment of artisan qualification

ENGINEERING STUDIES (NI – N6) in conjunction with DHET

BUSINESS STUDIES (N2 – N6) in conjunction with DHET

NATIONAL CERTIFICATE (VOCATIONAL) NCV L2 – L4 in conjunction with DHET

COMPUTER STUDIES – focus on hard skills including computer repairs

ENTREPRENEURIAL SKILLS TRAINING - short courses on how to start and run own business

ventures. This programme is geared towards imparting business skills to offenders for self-

employment. It includes amongst others, training on development of business plans, starting a

business, financial management etc..

SKILLS DEVELOPMENT DELIVERY AREAS


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Carpentry

Upholstery

Cabinet making

Wood machining

Wood polisher / spray painting

Welders

Fitters and turners

Textile workers

Bakers (within DCS bakeries)

Shoe manufacturers

OFFENDER SKILLS DEVELOPMENT IN PRODUCTION WORKSHOPS


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Piggery, dairy, beef, broiler, layers (egg production), abattoir operation, vegetables, agronomy and Orchard/fruit production.

Tractor and equipment operation.

OFFENDER SKILLS DEVELOPMENT IN AGRICULTURE


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RESPONSES TO MATTERS RAISED BY THE COMMITTEE


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STEPS TAKEN TO ACHIEVE THE TARGET OF 70% LOCAL PROCUREMENT

Regulations 9(1) and 9(3) of the Preferential Procurement Regulations, 2011 makes provision to promote local production and content.

The Department of Trade and Industry designates the sectors as contemplated in Regulation 9(1).

DCS invite bids for textiles, clothing, leather and footwear with a specific condition that only locally produced goods will be considered.


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STEPS TAKEN TO ACHIEVE THE TARGET OF 30% PROCUREMENT FROM SMMEs AND COOPERATIVES

According to the Preferential Procurement Regulations and in terms of the Generic Codes of Good Practice, an enterprise including a sole propriety with an annual total revenue of R5 million or less qualifies as an Exempted Micro Enterprises (EME).

To stimulate the participation of SMMEs within public sector procurement DCS has a list of prospective suppliers at each Supply Chain Management Unit which would include SMMEs for requirements that need not be advertised in the Government Tender Bulletin in accordance with general delegated powers.

To establish a list of prospective suppliers, Supply Chain Management Units must annually advertise in local representative newspapers or by any other means to invite prospective suppliers to apply for listing as a supplier.


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Bidders are required to submit original and valid B-BBEE Status Level Verification Certificates or certified copies thereof together with their bids, to substantiate their B-BBEE rating claims.

EMEs are deemed to have a B-BBEE status of “level four (4) contributor” and can claim 12 points in accordance with the 80/20-principle and 5 points in accordance with the 90/10-principle.

In instances where EMEs are more than 50% owned by black people, such EMEs qualify as “B-BBEE status level three (3) contributors”.


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Bidders are required to submit original and valid B-BBEE Status Level Verification Certificates or certified copies thereof together with their bids, to substantiate their B-BBEE rating claims.

EMEs are deemed to have a B-BBEE status of “level four (4) contributor” and can claim 12 points in accordance with the 80/20-principle and 5 points in accordance with the 90/10-principle.

In instances where EMEs are more than 50% owned by black people, such EMEs qualify as “B-BBEE status level three (3) contributors”.

The department needs to develop a policy that would regulate the engagement of big companies to use their Corporate Social responsibility budget to assist underdevelopment areas.

Currently the department does not have dedicated capacity with knowledge and understanding in order to support cooperatives.


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For 2014/15-financial year 1,957 contracts to the value of R289,222,780.19 were awarded. The number of contracts awarded to SMMEs (levels 3 and 4 contributors) and the value thereof are as follows:

• Level 4 252 contracts (12.88%) R 27,410,967-64

• Level 3 846 contracts (43.23%) R129,845,834-22

The Preferential Procurement Regulations is currently being reviewed by National Treasury and the matter with regard to supporting SMMEs, persons with disability, females and Local Economic Development is already incorporated in the draft Regulations (50/50-principle applicable to cases to the value up to R10 million per case)


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STATUS OF PAYMENTS MADE AFTER 30 DAYS – APRIL TO JUNE 2015

MONTH TOTAL NO. OF PAYMENTS

TOTAL VALUE OF PAYMENTSMADE

R’000

NO. OF PAYMENTS MADE AFTER 30 DAYS

VALUE OF PAYMENTS MADE AFTER 30 DAYS R’000

NON COMPLIANCE PERCENTAGE%

April 2015 7 849 711,102 84 1,672 1.07%

May 2015 15 144 726,845 101 1,809 0.67%

June 2015 17 416 531,589 128 1,066 0.73%


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The Department of Correctional Services is committed to the development and growth of small businesses through public sector procurement.

The Department shall cooperate with the Department of Small Business Development as well as the private sector to ensure mutual cooperation that will benefit small businesses and co-operatives.

Resolution 6 of the Ex-Offender Workshop: That government departments, in partnership with civil society, shall implement appropriate strategies and programs that will empower ex-offenders to become economically active (to be employable and to start their own businesses/cooperatives)

Engagements with the Department of Small Business Development will be crucial going forward, to ensure that the Department of Correctional Services aligns its policies so as to contribute towards inclusive and shared economic growth and job creation

CONCLUSION

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BRIEFING TO THE PORTFOLIO COMMITTEE ON SMALL BUSINESS DEVELOPMENT 05 AUGUST 2015