Postal Services Amendment Bill: briefing

Meeting report

LABOUR AND PUBLIC ENTERPRISES SELECT COMMITTEE
9 September 2003
DEPARTMENT ON POSTAL SERVICES AMENDMENT BILL: BRIEFING

Chairperson Ms C Nkuna (ANC)

Documents handed out:
Select Committee on Labour and Public Enterprises Business Plan
Departmental Powerpoint Presentation on the Postal Services Amendment Bill
Postal Services Amendment Bill

SUMMARY
The Post Office presented its proposed amendment to the committee, the amendment would prohibit courier companies from operating in reserved areas without proper authorisation. The Postal Services Act allowed companies who operated in reserved areas prior to the Act to continue doing so.

The committee adopted the Select Committee on Labour and Public Enterprises Business Plan.

MINUTES
The Post Office recommended an Amendment to the Postal Services Act, which contained a loophole that limited its ability to effectively compete in the market. The Department said the Act allowed courier services who operated in reserved areas before the Act took affect, to continue operating as usual.

The Department said the Post Office was obliged to provide an accessible, universal service to all South Africans, irrespective of the profit motive. This pressured the Post Office to take full advantage of the more lucrative markets to subsidise the financial burden created by their universal service obligations.

Discussion
Ms Nkuna (ANC) said the Department should possibly charge lower rates for the poorest people, especially those in the deep rural areas.

Ms P Ntombela-Nzimande, Deputy Director-General, Postal Business Unit, Department of Communications, said the Department would have difficulty applying a pricing formula to poverty levels.

Mr L Lever DA (North West) said it was unnecessary to amend the Act as the Court of Appeal had already interpreted the Act in the Postal Services' favour. Any other court in South Africa would follow the precedent set and it was merely duplication to make the requested amendment.

Ms Ntombela-Nzimande said the Postal Services held intense discussions on this very point and decided it would be more advantageous to amend the Act than to allow it to be open to other possible interpretations.

Mr Lever asked whether any of the courier companies were consulted on the proposed amendment.

Ms Ntombela-Nzimande said it was an oversight not to discuss this amendment with the Courier services beforehand, however she said issues around the reserved areas and its consequences were discussed in various other platforms.

Mr Lever said with the advances in the internet, the postal market was experiencing a metamorphosis that would affect the Postal Services' long-term strategies.

Ms Ntombela-Nzimande said electronic communication may replace certain of the Post Offices services whilst other services would be enhanced. Electronic buying resulted in a greater demand for goods deliveries.

Mr Lever asked whether the committee should have a meeting with the regulator.

Ms Ntombela-Nzimande said at the time under discussion, the regulator was not yet fully established. She recommended the committee discuss the resources and capacity available to the regulator.

Ms Nkuna asked for clarity on the relationship between the Post Office and Postnet.

Ms Ntombela-Nzimande said Postnet was one of the Post Offices competitors. The two entities often worked together, as with many other competitors to achieve common business interests.

Ms Ntombela-Nzimande said the courier industry was very large with some international presence and many specialised couriers, mentioning the medical industry as an example. Courier services were at pains to be included in the transport logistics sector. This was unlikely, as the anthrax phenomenon in the USA, emphasised the national security implications of the postal services.

The meeting was adjourned.