Thursday, 31 May 2018

My Small Enterprises Ombud Service private member's bill tabled in Parliament

On Tuesday 29th May my Small Enterprises Ombud Service private member's bill was ATC'd. That's Parliamentary speak for being listed in the Announcements, Tablings and Committee Reports of that day. The bill has been sent to the Portfolio Committee on Small Business Development for consideration. I expect to present it to the Committee early in the Third Term, in August.

I had hoped to wait until the deadline for comments and submissions on the bill, 11th June, to make final adjustments before tabling it. However, out of the blue Parliament imposed a deadline of 31st May for bills to be tabled if the sponsors wanted them finalised during this, the 5th Parliament which ends just before the next election, expected in May 2019. Fortunately the many submissions I received included nothing fundamentally different from what the bill envisages so we were able to get it through in time.

The bill is available to download from the DA website here.

Below is some background on the bill. I am now deep into the lobbying stage to get maximum support for the bill from political parties, business and other stakeholders.



1.1. Small, medium, and micro enterprises and co-operatives (SMMEs) comprise
a large portion of the South African economy. These smaller companies,
ranging from street hawkers to small factories, are the heartbeat of our
economy and can be considered as the most accessible sector for entrepreneurs
and those seeking to establish their product, brand or business. It is
estimated that SMMEs generate half of gross domestic product (GDP) and
nearly 60% of employment in SA. 90% of all new jobs will be created by
SMMEs by 2030, according to the National Development Plan. With more
than 9.3 million people unemployed, supporting these SMMEs is critical.

1.2. Every effort must be made to ensure that SMMEs are given the backing and
financial support they require in order to thrive and prosper. One of the key
components in this regard is ensuring that SMMEs are paid swiftly and
timeously. Without cash flow, SMMEs will struggle and eventually collapse.
Furthermore, the current environment in which SMMEs operate is not
conducive to the speedy resolution of disputes. SMMEs may not have the
necessary financial and human resources infrastructure to sustain the
protracted resolution of a dispute.

1.3. It is to this end that it is proposed that an Ombud Service be established that
will have jurisdiction over those matters pertaining to agreements to which
SMMEs are a party. Such an Ombud Service will provide an alternative
dispute resolution mechanism to SMMEs, thus removing these enterprises
from delays and extensive costs occasioned by formal legal processes.
Furthermore, this service will allow the Minister responsible for SMMEs to
provide targeted interventions to assist SMMEs through the Ombud Service.


2.1. The Bill provides for the establishment of the Small Enterprises Ombud
Service (Ombud Service) as a juristic person and for its day to day
functioning. It also provides for the application process and the process to
resolve disputes.


3.1. Chapter 1 deals with definitions used in the Bill.

3.2. Chapter 2 deals with the establishment of an independent Small Enterprises
Ombud Service, its mandate, functions and powers, the establishment of its
Board, the functioning of the Board, its staff component, funding, dissolution
of the Ombud Service and matters relation to its day to day functioning. In
addition it specifically provides for:

– Appointment of Chief Ombud and chief financial officer, conditions of
appointment, functions;
– Application of Public Finance Management Act;
– Reporting;
– Delegations;
– Role of the Minister;
– Regulations; and
– Offences and penalties.

3.3 Chapter 3 deals with applications to the Ombud Service and the processing

3.4. Chapter 4 deals with investigations by the Ombud Service and representation
before the Ombud Service.

3.5. Chapter 5 deals with the orders that can be made by the Ombud Service.

3.6. Chapter 6 deals with public access to orders and the short title and
commencement of the Act.


4.1. The appointment of staff, development of systems and procurement of
physical structures will be funded by an appropriation from the Department’s
annual budget.


5.1. The Member proposes that the Bill must be dealt with in accordance with the
procedure established by section 75 of the Constitution since it contains no
provisions to which the procedures set out in section 74 or 76 of the
Constitution apply.

5.2. The Member is of the opinion that it is not necessary to refer this Bill to the
National House of Traditional Leaders in terms of section 18(1)(a) of the
Traditional Leadership and Governance Framework Act, 2003 (Act No. 41 of
2003), since it does not contain provisions

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