Job Creation Blue Print: discussion; Strategic Planning Workshop Report: finalisation

Meeting report

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
25 June 2003
JOB CREATION BLUE PRINT: DISCUSSION; STRATEGIC PLANNING WORKSHOP REPORT: FINALISATION

Chairperson: Ms C Nkuna

Documents handed out:
Greville Wood Developments letter to Minister of Housing (Appendix 1)
Greville Wood Developments letter to Minister of Trade and Industry (Appendix 2)
Greville Wood Development letter to South Africa Academy of Engineering (Appendix 3)
Department of Labour Work Programme 2003

SUMMARY
Members accepted the Committee's Vision and Mission as discussed at the Strategic Workshop on 14 April 2003.

The Blueprint for Job Creation was discussed, particularly the involvement of the Departments of Labour, Trade and Industry and Housing. The Chair agreed that all three Departments be called to a meeting to discuss the matter.

MINUTES
Strategic Workshop
The Chair opened the meeting by accepting to the Committee's Vision and Mission as discussed at the Strategic Workshop on 14 April 2003.

Blueprint for Job Creation
Ms Nkuna referred to the Blueprint for Job Creation as presented by Mr Greville Wood. The meeting did not end well as controversial issues were raised by members. More stakeholders should be present in a meeting before a decision could be taken on the matter.

The Chair turned to a response from Mr Wood following the meeting. It was stipulated that the Blueprint would assist in wealth creation and income generation for the Government. It also stated that Greville Wood Developments (GWD) had a good relationship with the Department of Housing, and went further to say that the former Minister of Science and Technology had approved the plans and urged for a pilot development to be undertaken. The Department of Trade and Industry had, however, rejected the plans and had not yet given reasons for this. Mr Wood also indicated that Ms Botha should submit her criticisms of the plans to him in writing so that he could respond to them. The Chair asked how the issue should be addressed and concluded.

Mr Ramodike (IDP) suggested that the Committee adhere to the initial agreement to invite all stakeholders to the meeting as the Committee could not act on letters. He advocated direct interaction.

Mr Kolweni (ANC) said that Departments could not drag their feet with regard to this as it seemed to be a good idea. There must be reasons for the refusals from inter alia Department of Trade and Industry. The Department of Housing should also be brought in to such a meeting.

The Chair asked whether other stakeholders should be present at a meeting with the Departments.

Mr Kolweni pointed out that stakeholders were not Government entities and should be kept separate to prevent arguments and counter-arguments in a meeting. He further suggested that the Department of Labour also be brought on board.

Mr Lucas (ANC) suggested that a site visit be organised to evaluate the Blueprint. Mr Wood' colleagues should also be present. He said that Mr Wood had attacked GEAR as a government implementation.

Mr Ramodike pointed out that the project had not been piloted and a site visit would therefore not be possible.

The Chair mentioned that Mr Wood had referred to foreign countries in his presentation when referring to successes.

Mr Nogumla (ANC) said that engineers from their own Department should be commissioned to analyse the plans and present results to the Committee. He also said that they should be wary of foreign companies dumping goods in South Africa.

The Chair then agreed that the Departments of Labour, Trade and Industry and Housing be summoned to a meeting to discuss the issue of the Blueprint. She added that Mr Wood had made great inroads into Parliament with his Blueprint.

Meeting was adjourned.

Appendix 1
Letter to Minister of Housing from Greville Wood Developments
Date 09 June 2003
Mrs B S Mabandla
The Minister of Housing
Department of Housing
Pretoria
CC Mrs Nkuna Chairperson of the Select Committee Labour. Dr R Marcus Chairman - NACI, Messrs A. Hirsch and V. Gumede - the Presidency,

Dear Mrs Mabandla

On Wednesday the 4^th June, under the chairpersonship of Mrs Nkuna, GWD addressed the Select Committee on Labour and Public Enterprises at Parliament. The address concerned the development of worker-owned, labour intensive factories in South Africa.

One of the catalysts used to create jobs in these factories, is to teach low skilled communities how to manufacture their own houses, schools and community buildings. The manufactured buildings will conform to the National Building Regulations and from day one will be bankable assets. This plan will run parallel to current brick delivery systems.

By teaching people to manufacture rather than construct buildings, skills provided through manufacturing can project workers into other forms of manufacturing, once the building tasks are completed. From this, sustainable, growing economies within newly housed communities can develop. Contrasting this, brick delivery methods, provide no sustainable economic growth once the houses are built.

The Select Committee expressed the view that Housing, Dti and S&T departments should be brought into further discussions, however, Prof. Nkuhlu earlier suggested that GWD meets the President and presents the plan. The Presidency requested that the National Advisory Council on Innovation, under the chairmanship of Dr Marcus, engineering advisor to the Minister of S&T, convene a meeting on the Job Creation Blue Print and advise the Presidency.

We intend to request NACI to invite representatives of the Select Committee to the meeting, as it represents society at its "grass roots", that is precisely where these factories are to be developed.

Therefore, before the NACI meeting and as the Dti evaluators have failed to provide a rational written evaluation on the BP since 1995, GWD is inviting Business SA, the Engineering Academy of SA and the Engineering Council of SA, to provide evaluations on the Business Plan and Technology Systems, which have stumped the Dti. We are doing this so that the Select Committee, if invited, can take part and make informed decisions during discussions.

The technologies and systems incorporated in the Blue Print, that maintain the manufacturing business plan are complex and it is the reliance of the business plan on these systems, which has caused confusion among decision makers within government, business and labour.

To date we have had fruitful discussions with the Department of Housing regarding the Blue Print and enquire if the Departments would like to be present at the NACI meeting, if so may we put your Department's name forward to the NACI secretariat.

The Blue Print simply stated is to make National Housing the prime source of sustainable job creation in South Africa, whose solution is capable of spilling over into the rest of Africa. However, from meetings with your department, it appears that Housing cannot accommodate the Blue Print because of its broad practical base.

We have included, as an attachment, a copy of our address to the Select Committee, which will provide insight. Therefore, should you wish to be briefed further on the Blue Print, please contact GWD and we will arrange a mutually acceptable date.

Appendix 2
Greville Wood Developments - Letter to Minister of Trade & Industry
Minister of Trade & Industry 18 June 2003
Department of Trade & Industry
Pretoria
CC Mrs Nkuna, Chairperson-Select Committee on Labour & Public Affairs, Dr Ginwala- Speaker of the National Assembly, Ms Pandor Chairperson of the National Council of Provinces, Dr Marcus Chairman NACI and Mr V Gumede- Presidency, C. Wood GWD, Mr Philander Secretariat- Parliament.

Dear Minister Erwin
A target set by the Growth and Development Summit is to develop 2,5 million jobs by 2014. As you are aware, the Blue Print address joblessness industrially, at the micro-economic level and from the Summit's targets and recent developments, it appears it is time for dialog regarding the Blue Print.

The Presidency recently requested the National Advisory Council on Innovation to evaluate the Job Creation Blue Print, then the Select Committee on Labour and Public Affairs, requested GWD to present the plan and the presentation occurred on the 4^th June 2003.

Because of the interest shown in the Blue Print, it would be of assistance to review the numerous evaluations the Dti conducted on the efficacy of the engineering business plan. However, as the Dti provided no written reports to GWD over the past eight years, it is difficult for all concerned to understand Dti's negative findings. These evaluations are crucial to further critical deliberations in Parliament and at NACI and we were going to ask the NACI chairman to request them from you, but as the Select Committee would also find them beneficial, we are writing to you now to compile these evaluations.

These were the evaluations that we are aware of: In 1995 Dr Ruiters & Mr Dirks, 1996 Mr Hirsch and the 1997 the Dti evaluation of our report to the Foundation for Research Development, which was the basis of our meeting with you in 1997. This report is of particular importance for, as you indicated at that meeting, the plan was impractical. It is essential for NACI and the Select Committee to understand how policy evaluators can determine the outcome of manufacturing business plans, where Ford, GM, Goodyear and Siemens collaborated in their development and pronounce them impractical. Therefore the Dti's rational argument showing these companies to be incompetent in developing manufacturing plans, are crucial to the whole debate of developing a practical solution to poverty and joblessness.

Then Dr Jourdan and Ms Smith in 1998 tried to evaluate the plan and again in 2000 Dr Ruiters. Towards the end of 2000, there must have been a re-evaluation just before the previous election, as the Dti notified engineering advisor to S&T Minister, Dr Marcus that government was now serious about developing the BP. Later in 2002, Dr Potgieter re-evaluated the BP and his remarks appeared to infer there were no programmes within government that could accommodate the Blue Print. You will recall, we pointed this out to you in meetings in 1997 and 1999 and presented you with numerous, similar claims from provincial governments going back to 1994, referring the BP back to central government stating there was no policy in place to allow for the development of a practical solution to poverty and joblessness. It would appear government have not rectified this point.

Please note, both Dr's Ruiters 2000 and Potgieter's 2002 evaluations, confused low-tech, labour intensive manufacturing with the high-tech IT industry, so nobody knows what they actually evaluated. Through your DG demonstrating his technical ineptitude, it is possible that all previous Dti evaluators were just as inept in trying to evaluate engineering business plans as Dr Ruiters was. Therefore from this point and the evaluation where Dti must have shown that some of the largest industries in the world are incompetent, we request that Dti's numerous evaluations of the Blue Print are made public so similar errors can be exposed, if they are there.

Moving from reports, a point you made in an e-mail, which has also caused confusion, requires your clarification. It stated, you originally supported the Plan, but your Executive Committee indicated that government could not show favour by supporting this private Blue Print plan at the expense of all the others similar plans, Dti was evaluating.

Members of the Select Committee had difficulty with this, as know one is aware of these "other plans". Especially plans that develop a sustainable industrial solution to joblessness at a low skilled level, where GEAR's potential is expanded to also address the micro-economy through a second tier of industry. In addition, according to expressed views, you statement appears to be in direct conflict with the President's remarks, which invited the public to assist government in eradicating poverty and joblessness. In our opinion the President's invitation to the public is the basis Parliament invited GWD to explain the Blue Print, but this action does not reflect your Executive Committees rejection of the Blue Print in 2000.

Your co-operation in clarifying these points and providing copies of Dti evaluations will be of assistance in taking the Job Creation Blue Print forward.

Appendix 3
Greville Wood Development Letter to South Africa Academy of Engineering

Dr B Kruger
President
South Africa Academy of Engineering
CC Mrs Nkuna, Chairperson-Select Committee on Labour & Public Affairs, Ms Pandor Chairperson of the National Council of Provinces, Dr Marcus Chairman NACI, Prof J Sheer, Mr V Gumede- Presidency, C. Wood GWD, and Mr Philander Secretariat- Parliament.

Dear Dr Kruger Date 20 June 2003

Last year, as president of the SA Academy of Engineering, you provided criticism regarding the Job Creation Blue Print that was circulated in Parliament. Our counter arguments on the Academy's negative views, demonstrated this criticisms lacked understanding of the manufacturing process and the manufacturing industry in general. To date the Academy has not refuted any of our counter arguments.

By now, everyone agrees that GEAR will not address joblessness among low skilled people and some unions are calling for it to be scrapped. We presented an argument to a Parliamentary Select Committee on not scrapping, but reinforcing GEAR through the engineering business plan the Blue Print provides. This would enable GEAR to work not only on the macro-economic level, but also at the micro level, as this is where unemployment is rife. It would operate alongside and complement, capital-intensive factories by providing labour-intensive production alternatives, coupled to management, marketing and engineering product R&D that can sustain factory production.

Our address to the Select Committee on this process and can be viewed at - Address

The engineering plan that underpins GEAR's macro-economic focus, stipulates that ultimately all low skilled labour will be eliminate in factories and mines. This does not suit Africa, whose people generally are low skilled. Therefore, Africa requires its own engineering plan to provide jobs at a low skills level, where work subverts capital to become the prime source of wealth creation, as this sector also has difficulty accessing capital. As Africa does not have this unique engineering plan, it therefore cannot create jobs at the micro-economic level.

To create jobs there, engineers must provide this alternative plan, as policy formulation is incapable of doing so. The plan must first be piloted to demonstrate that the plan is be able to bringing low skilled communities into manufacturing processes, provide products for manufacture through product R&D and marketing strategies, with management structures that can support business plans at this low skills level. We claim the Blue Print that the Academy previously reviewed negatively, if piloted, can demonstrate that these objectives can be met. Blue Print on the Web.

The recent Growth and Development Summit harmonized clashing interest of the three constituents to halve unemployment by 2014. In this regard, we again request the Academy to re-evaluate the Job Creation Blue Print and provide a rational argument for or against it's business and engineering plans ability to redirect GEAR to also focus on micro-economic development. Failing this, please acknowledge that the Academy's previous assessment was flawed.

As you are aware, the Blue Print is based upon labour intensive production, coupled to appropriate low capital tooling, all linked to, high-tech management system whose costs are amortized over many factories thus providing affordability. This management system organizes the interaction of the business and production elements in these factories from a distance and could have a profound influence on GEAR's ability to develop second tier industrial processes that can develop the low skilled micro-economy.

The Presidency has requested the National Advisory Council on Innovation (NACI) to evaluate the Blue Print and on the 4^th June, we addressed the Parliamentary Select Committee on Labour and Public Affairs on the plan. Critical arguments that can be substantiated, from the Academy would be an important contribution to the Select Committee's deliberations and the future NACI presentation, from which the Presidency and Parliament will ultimately be advised.