NATIONAL ASSEMBLY

QUESTION FOR ORAL REPLY

QUESTION NO.: 124

DATE OF PUBLICATION: 16 AUGUST 2011

Mr K B Manamela (ANC) to ask the Minister of Economic Development:

(1) What, with reference to the Walmart deal, are the terms (a) of review and (b) given concerning job (i) creation and (ii) retention;

(2) whether he has found any link between Walmart and the retrenchment of approximately 31 000 staff members of a certain company (name furnished); if not, what is the position in this regard; if so, what are the relevant details?                                                                          NO2445E

REPLY

(1) Government participated in the Competition Tribunal hearing in order to ensure that the public interest issues in the Competition Act are adequately addressed. This is consistent with the provisions of the Competition Act, which provides for government through the Minister of Economic Development to participate in the proceedings inter alia of the Competition Tribunal.

In the course of our participation, we made a request for the discovery of a number of documents and of information in the possession of Walmart, that were critical to show the impact of Wal-mart's purchase of a majority stake in Massmart on employment, historically disadvantaged and small businesses, spaza shops and supplier industries.

The Competition Tribunal did not order all the information which was required by our independent expert and by our legal counsel.

We asked for an opportunity to cross examine the witnesses of Walmart, Massmart and of some of the other parties who chose to intervene in the proceedings. However, our legal team was significantly constrained from properly and adequately cross examining the witnesses due to the scheduling decisions of the Tribunal.

It is our view that these decisions of the Tribunal form compelling grounds for a review of the decision; that adequate discovery and time for cross-examination of witnesses would have assisted the Tribunal to consider the public interest harms arising from the merger (and particularly the negative effect on employment in South Africa) more fully and to have developed more appropriate and effective conditions for the transaction.

In our law, if an administrative body such as the Competition Tribunal does not give effect to the right to fair administrative action protected by the Constitution, parties to those proceedings can apply to a higher court for a review of the proceedings, and in this case we request that the matter be referred back to the Tribunal.

At the same time, the law provides for the right of appeal of the decision on grounds of law or facts. The representative trade union in the matter, or any of the merger parties, may exercise this right of appeal. An appeal has been duly made by the trade union. In terms of the Competition Act, the Minister of Economic Development may on behalf of government participate in any proceeding of the Competition Appeal Court in order to make representations on public interest grounds referred to in section 12A(3) of the Act.

Government's intervention must be seen in the context of the high unemployment levels in the country.

No country has been able to create sustained wealth and prosperity based on consumption only. You cannot shop your way to wealth and jobs. The big lessons of the last six decades for successful developing economies have been simple: build your factories, your mines and your agricultural sectors as the critical providers of jobs. They in turn require a strong and growing private and public services sector to manage the investment, distribution and knowledge-generation activities that sustain the productive sectors of the economy.

In Walmart the choice is simple: do we prioritise jobs in supplier industries and in small and medium retailers and spaza shops; or do we prioritise large retail chains which mainly import from elsewhere in the world? Our choice as government is clear: we prioritise jobs in South Africa.

The legal processes with Walmart are about the conditions that the company should adhere to when it enters our market - will it support small business, local factories, jobs in food processing, in textiles, in our electrical appliance and furniture industries - in other words in the South African manufacturing sector that employs more than a million workers - or will it increase the existing levels of imports significantly?

(2) This is a matter that is being dealt with between the business and labour parties under the Labour Relations Act. Should any further information become available, it will be forwarded to the Honourable Member.

Issued by Parliament, August 30 2011

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