1st Quarter Performance Report2012/13

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Performance Against the Business Plan

Strategic Objective: Protect Consumers from Hazards through Advocacy Education and Awareness

Output PerformanceMeasure or Indicator

Annual Target Quarterly Milestones

Actual Achievement Reason for Variance

Consumer Rights as espoused in the CPA and consumer themes

1.1 Number of themes on consumer protection accessed online (website or in print)

2 Themes linked to consumer complaints/ trend/ systemic issues

4 Consumer fact sheets and 4 business targeted information circulars (right to choose) sec 13/14/15/16

4 Fact sheets circulated -DEAFSA-Uniting Reformed Presbyterian ChurchPublic Service Commission4 Business circulars circulated to: -Metro Rail -SA Poultry Association-City of Joburg 

Target met

9 Workshops9 izimbizo conducted3 public hearings1 conference

1.2 Outreach 9 Workshops9 Mall/ Taxi/ Train outreach 2 school/ tertiary Consumer Clubs1

2 Workshops3 Mall/ Taxi/ Train outreach

Workshops conducted:- City of Joburg- Ward 62 Community - Public Service Commission -Uniting Reformed Church -DEAFSA - Poultry Association Mall Activations/ Exhibitions:- Reds Mall- Presidential Visit - Metro Rail

Target Exceeded

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Strategic Objective: Protect Consumers from Hazards through Advocacy Education and Awareness

Output PerformanceMeasure or Indicator

Annual Target Quarterly Milestones

Actual Achievement Reason for Variance

Meetings held: - Cirrus Techvue - BUSA & NCC - Eastern Cape Province - University of Joburg - Wits University - University of Pretoria - Cell C MBA Graduates- SAA & NCC- BMF and BLA - COTTI Regulatory Cluster - New Era & NCC - DM Tobias Pokolo Campaign - GMO Labeling Task Team - Northern Cape Province - Call Center Operations Management

75% 1.3 Number of reports consumers finding NCC advocacy comments useful

90% of consumers finding the NCC comments useful

Provide website content (Fact sheets, circulars etc.), Launch website: marketing unit)1 report

Content developed but not placed

Website is managed by the dti, NCC does not have authority to input.

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Strategic Objective 2: Improve Consumer Redress as envisaged in the CPAImproved Customer Redress as envisaged in the CPA 

Measure 2.1: Percentage of complaints timely resolved. 

60% 2011 :5% remaining carried over complaints resolved               -Case Management System Manual customized and developed    

 -Referral Protocols developed        

Carried over Complaints -8455 A total of 94 % of carried over complaints -processed

50.3 % -resolved Withdrawn- 330Non Referrals – 328Referrals - 231Compliance Notices -307Consent agreements -1539Conciliation Processed Conducted - 1609

42 % - set-down conciliation Set down - 3606 -Standard Operating Procedures developed for Complaints Handling

  

 -Referral Protocols developed -Referral protocol, agreement reached with the Public Protector Early Resolution -A referral protocol project plan has been approved by the Commissioner -20 institutions identified for possible referral protocols development.

Target exceeded                 The Case Management System pending procurement- dependent on budgetary availability

 Target Exceeded

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Strategic Objective 2: Improve Consumer Redress as envisaged in the CPA

Baseline to be established

2.3 Number of capacity building workshops for NGOs/ CPGs  

Capacity Building: NGO’s and Advice Offices

Develop a NGO focused training manual on the CPA and disseminate to 100 NGO’s

-Proposal Drafted for Wits Law school to incorporate CPA into the legal studies.- Training Manual developed in consultation with Wits University -Funding Proposal for CPG Capacity Building developed - Letters drafted to funders for donor funding support

Target Exceeded

Number of Consumer Satisfaction

3 consumer Protection practitioners accredited

Establish ADR Unit/Department within the enforcement Division

Established ADR Unit/Department within enforcement division, a Director appointed as per the approved structure. 

Target Met

Appointment of one conciliator , one per sector /province

Five (5)Trainee Conciliators -Monitored by the qualified Conciliators5 - Sectors Allocated :

Motor

Retail

Education

Time Share

Telecoms

 

Target Met

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Strategic Objective 2: Improve Consumer Redress as envisaged in the CPA

Measure 2 .3(a)% of complaints and matters received , finalized and disposed of using the CPA Enforcement tools :

60% complaints received and addressed by being finalized , resolved and disposed of

Consent Agreement 1 500   Compliance Notices 300 Referrals 20 (60 %)

Consent Agreements -

1539

 Compliance Notices -307  Non Referrals – 328Referrals -

231  

Target exceeded

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and complianceProtect Consumers from unethical business practices through law enforcement and compliance

Measure 3.1: Number of Industry sectors Identified for investigations (NCC Initiated complaints )

3 Industry sectors

ICT –Section 63  

-Section 63 investigation (Project Plan Approved )ICT project plans Approved  Pay TV  -Following the issuance of compliance notices - MULTICHOICE and Top TV -Revised terms and Conditions Analyzed by the Commission -Analysis of the revised terms and conditions to be finalized in 2012/13 Financial Year  SABC The NCC Recommended that The SABC to publish the said television licence terms and conditions mentioned herein before on its website bring the said terms and conditions to the attention of all television licensees;Held a meeting with the SABC Group Chief Executive Office  

Ongoing  

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and compliance

Medical and Pharmaceuticals –Section 24       

Section 24 - Project Plans Approved Project Plans for Medical and Pharmaceuticals Approval  OPEN MEDICAL AID SCHEMES  Top 4 Open medical schemes were analysed:-Fed-Health Medical Scheme-Bonitas Medical Fund-Momentum Health Medical Scheme Medshield Medical Scheme Rules- recommendations on the Open Medical Aid Scheme Investigation- referral to the equality court  

On going

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and compliance

Medical and Pharmaceuticals –Section 24       

Section 24 - Project Plans Approved Project Plans for Medical and Pharmaceuticals Approval   OPEN MEDICAL AID SCHEMES  Top 4 Open medical schemes were analysed:-Fed-Health Medical Scheme-Bonitas Medical Fund-Momentum Health Medical Scheme Medshield Medical Scheme Rules- recommendations on the Open Medical Aid Scheme Investigation- referral to the equality court  

On going

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and compliance

Enforce of compliance with the Act through Litigation  

3.2: Percentage of investigated complaints filed by the Commission settled through Litigation.  

70% 2011: 10% of matters are carried over from 2011. Review and Declaratory orders to be filed with the High Court for clarity on issues of procedure and interpretation

79 Compliance notices were opposed and 15 have been concluded at the NCT. 1 Application for interim relief and 28 Application default judgements. The levels of compliance on all entities that were locked in litigation with the NCC has however improved significantly with issues in disputes being limited to only about interpretation of two sections: 14 and 63

The declaratory will necessitate the process of issuing compliance Notices until the court has clarified the law and procedure.

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and compliance

Measure 3.3Percentage of investigated complaints timely finalized

70% of complaints escalated from complaints Handling Unit

Finalise carried over complaints. 60% of cases escalated resolved

 TRANSPORTATION INVESTIGATIONGAUTRAIN – Investigation into the Compliance with section 63 of the CPA Gautrain requested seven months to comply with section 63 or more time to apply to the Minister of Trade and industry for a stay in the issuance of compliance notices by the CommissionMeeting with the DG of transport scheduled for 10th of July 2012 SANRAL The Commission Analyzed the terms and conditions of E tag , against provisions of the Consumer Protection Act 68 of 2008 and found that about eighteen (18)Clauses were in contravention of the provisions SANRAL has amended its terms and conditions to comply with the CPA Outstanding issues of Tariffs to be addressed with the Department of Transport – meeting scheduled for July 10 th 2012ROAD TRANSPORTATION The Commission discover that the 449 bus companies policies on refunds do not comply with the provisions of section 63(2)Meeting with the DG of transport scheduled for 10th of July 2012

On going  

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Strategic Objective 3: Protect consumers from unethical business practice and misconduct through law enforcement and compliance

Protect consumers from unethical business practices and misconduct through the law enforcement and compliance 

Measure 3.6: Number of Industry Codes of conduct developed in terms of Section 82 of the CPA

Four industry codes of conduct

industry codes of conduct (one industry)

A draft Guideline for revised for Industry Codes of Conduct were gazetted for public comments on the 23 May 2012

Target has been met

Protect consumers from unethical business practices and misconduct through the law enforcement and compliance 

Measure 3.6 (a): Percentage of processed exemptions application.   

100% of applications processed received in terms of section 55 of the CPA

100% of applications received processed

Application for exemption by CMS received and processed and recommendation to the Minister finalized Application from CMS is a resubmission of exemption resulting from the Minster’s decline in granting exemption regarding the earlier analysis on their application in October 2011. Analysis was completed and the advice sent to the Minister in April 2012.The analysis on the application for exemption from the Department of Health was completed and the advice sent to the Minister in June 2012

Target met

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Strategic Objective 4: Conduct Research for Policy Legislation and Regulatory improvements

Conduct research for policy ,legislative and regulatory improvement

4.1: Number of Consumer Research Studies Conducted and reports produced

3 Consumer Research Study reports to be conducted on vulnerable consumers

Consumer research study on low income consumers

RESEARCH ON THE ATM FEES:  During this quarter we conducted a research on the ATM fees. We chose ATM fees because ATMs are generally used by the low income consumers. In our research we found that the big four banks employ an ad valorem pricing system for cash withdrawals and cash deposits. The research also revealed that it is accepted that the off-us fees are higher than the on-us fees with the implicit price incentive for the customers to use their own banks ATM infrastructure. The pricing structures are typically quite complex and it is difficult for the average consumer to be sure of the applicable fees. The research makes the following  

Target met

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Strategic Objective 4: Conduct Research for Policy Legislation and Regulatory improvementsConduct research for policy ,legislative and regulatory improvement

4.2: Industry Research Study and reports produced.

3 industry studies to be conducted

Industry Research report on motor vehicles and medical services industries  

MOTOR INDUSTRY The Research conducted a research on the terms and conditions of the warranty on new vehicles. In South Africa, a new car factory warranty extends from 1 year to 3 years and maybe extend to 5 years. In some cases some care manufactures have warranties of 10 years. In our research, we found that the warranty terms and conditions are not fair to the consumers. As a result, a concerted effort must be made by the NCC to engage NAAMSA in helping its members to develop terms and conditions that are fair and just. Within Codes of industry guidelines, a strategy needs to be formulated to influence the motor industry to develop new set of warranty terms and conditions. At the moment, it is a discretion of the car manufacturer to either replace or repair the defective part or component. Manufacturers do not accept responsibility of damage resulting from the defective component. A copy of our analysis is attached. During this quarter we developed a project plan for the project and preliminary research on the recall of BMW both in South Africa and Internationally. 

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Strategic Objective 4: Conduct Research for Policy Legislation and Regulatory improvements

MEDICAL INDUSTRYDuring this quarter we developed a project plan and also did a preliminary research on overbooking of hospitals and clinics. The South African health system consists of a large public sector and a small private sector. .The private sector spends about R66 billion to service about 7 million of the population while the rest of the population depends on R59 billion spent by the public sector. A recent study by Lean Insider shows that overbooking of patients would address patient no-shows and enable hospitals to attend to more patients. According to this study, this would improve service and result in increased efficiency. Our research shows that overbooking would only be beneficial to clinics and hospitals and not patients and this practice contravenes section 47(3) of the Consumer Protection Act. We conducted our research on four public hospitals (Johannesburg General, Chris Hani Baragwanath, Ga-Rankuwa and Pretoria Academic hospital) and 3 private hospitals, (Brenthurst Clinic, Eugene Marais and Parklane Hospitals. None of the above-mentioned hospitals admitted to practicing over-booking of patients during pre-admissions.AUCTION INDUSTRY The Investigation came as a result of a complaint lodged by Mr. Tony David Kobe. Mr. Kobe complained about Auction Alliance and the Liquidators, Westrust. He complained about the sale of the property that was owned by his company (Inyanga).After assessing the evidence that was put before the NCC by Mr. Kobe, we then decided to institute a full investigation in terms of section 72 of the CPA and its regulations. In conducting our investigation we summonsed the Auction Alliance for documents in terms of the CPA and the regulations. We also summonsed the liquidators and the buyers of the property to come for a hearing so that we can get clarity von the sequence of events leading to the sale, during the sale and after the sale of the property. We attach a transcript of this hearingOngoing and there is no variance.

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Strategic Objective 5: Achieve customer and Stakeholder Expectations

Achieve customer and stakeholder expectations

5.1: Number of codes of formalized MOU and SLA concluded between the NCC and other institutions.

2 NGOs 1 international organization1 professional association1 interest group

Identify and contact target organization

Contact made with:- the Federal Trade Commission (USA) – one international organisation-Society for Consumer Affairs Professionals (SOCAP).- one professional organisation-Meriting Consumer Voluntary Group Development forum. – one interest group

target met

Achieve customer and stakeholder expectations

5.2 (a) Number of reports produced by established Standing Advisory Committees(SAC) in terms of section 3(1) (b) (11) M &E

1 Annual recommendation / report on status consumer protection

TOR approved by MEC and Minister.  Committee members appoint 

-Member to SAC on Vulnerable Groups appointed “TU”-Members to SAC on Industry Stakeholders appointed “QR” -Requests for nominations sent to Provinces, awaiting feedback. 

Target met

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Strategic Objective 5: Achieve customer and Stakeholder Expectations

Achieve customer and stakeholder expectations

5.2 Number of reports produced by established Standing Advisory Committees (SACs) in terms of section 3(1)(b)(11) M&E

1 Annual Recommendation/ Report on Status of Consumer Protection

TOR approved by MEC and Minister. Committee members appointed

-Member to SAC on Vulnerable Groups appointed “TU”-Members to SAC on Industry Stakeholders appointed “QR” -Requests for nominations sent to Provinces, awaiting feedback. 

Target met

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Strategic Objective 6: Ensuring the Establishment of a Functional Organization

Ensure the establishment of a functional organization

6.1: Developed policies with standard operating procedures including corporate values

HR and finances related policies

All policies with SOP’s developed and approved  

All HR policies are developed adopted and approved

Target met

Achieve the mandate of the NCC with an optimal staff component

7.1 : % of female appointment versus male appointments 

60% of female appointed in the organization

Development of mainstream gender issues plan

Mainstream gender issue plan developed 

Target met

Achieve the mandate of the NCC with an optimal staff component

7.2: percentage of persons with disability appointed in the NCC

4% of staff complement will be persons with disabilities

Plan for mainstreaming people with disability developed

The persons with disability mainstream plan developed 

Target met

Achieve the mandate of the NCC with an optimal staff component

7.3: percentage of approved and funded positions filled

35% of the positions in the approved structure filled

10 % of positions filled

5.3% of positions within the approved structure filled

Although there is a 4.7% variance, interviews have been conducted and staff to start at the beginning of the second quarter.

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Strategic Objective 8: Implement an Organizational Wide Performance Management System

Implement an organizational wide performance management system

8.1: % of employees with performance contract and annual performance assessment

100% of employees with

performance contract , and

annula performance assessment

Development of performance management system tool, development of individual key performance areas

Performance management system tool, performance contract of the executive and senior managers are developed

Target met

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Strategic Objective 9: Create the brand of the NCC as SA Consumer voice

Create the brand of the NCC as SA consumer voice

9.2: Number of media engagements

1 Press Conference12 Media Interviews12 Media Releases on NCC success stories

3 Media interviews3 Media releases

Media responses/ clarifications: - Giovani Mediators and Arbitrators -Accreditation- Consumer Protection Centre- Accreditation - Sunday Times- Inaccessibility of the Commission to Business- Sunday Times- City of Joburg- Moneyweb- Extension of Commissioner’s term - BP SA: Opt-out Register- Sunday Tribune- Returns & Refunds- Sunday Times x 2 - Service Quality - Die Son- Returns & Refunds- Beeld- Sanral TariffsSunday Times- Unfair discrimination- Sunday Times- Tribunal Ruling- Vodacom- Sunday Times- Status Money- Media Questions - Maskew Miller: NCC Logo“VW”Media Interviews- Lesedi FM x 2- Direct Marketing & Cellphone Contracts, Buying Property- Radio 2000- Sanral- e-tolling- Radio 702- ATM Fees- Ilungelo Lakho x 2- Product Labeling, Pyramid Schemes “XYZ”

Target Exceeded

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Strategic Objective 9: Create the brand of the NCC as SA Consumer voice

Create the brand of the NCC as SA consumer voice

9.3: NCC Service Charter developed, approved and implemented

Year 1 developed, approved and implemented 

Internal workshop on draft service charter. Revise document

-Service Charter revised in line with public input and internal input from workshops ”C”

Target Met

Create the brand of the NCC as SA consumer voice

9.3(a) Internal Communication Strategy

Developed, approved and implemented

Develop and disseminate internal news letter

Internal Newsletter developed and approved “GH”Strategic Planning Workshop- A,E & A Unit “KL”

Target Met

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Strategic Objective 10: Provide an Effective ICT Infrastructure

Provide an effective ICT Infrastructure and Network

10.1: Availability of a functional ICT System

 50% infrastructure 45% applications45% services

Disaster Recovery Plan Implementation Computer Hardware procurementWebsite and Intranet 

Disaster recovery plan has been developed and ready for implementation.Computer hardware for Call Centre is set and ready for go live. The TOR for website and Intranet have been developed.

Target met

Provide an effective ICT Infrastructure and Network

10.2(a)1.Compliance of ICT systems with governance framework2.Develop, approve and implement disaster strategy plan

Develop disaster recovery strategy and plan.

ICT Strategy A draft ICT strategy is in place. 

Target met

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Strategic Objective 11: 100% Compliance with the Signed Shareholder Compact Agreement with the dti

100% compliance with the signed shareholder compact agreement with the dti

11.1: Risk Management Plan developed and implemented 

100% risk management plan developed , approved and implemented  

Update financial policies and SCM policies according to latest and updated PFMA and Treasury Regulations

NCC has updated financial and SCM policies and these are updated as and when new Treasury Regulations and PFMA policies are updated. This includes SCM policy on legal services in our database 

Target met

100% compliance with the signed shareholder compact agreement with the dti

11.2 (a): % compliance to the shareholder compact agreement with the dti

100% compliance with the signed shareholder compact agreement with the dti  

Quarterly reports to be done and used to review if the NCC is up to date with the dti agreement

This is the first quarterly report for 2012/2013 and it has been done in compliance with shareholder compact   

Target met

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1st QUARTER FINANCIAL RESULTS 2012/13

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QUARTER 1 FINANCIAL RESULTS

Actual % Quarter 1 Quarter 1 Spent out of 2012 / 2012 YTD Budget YTD Actual Total budget Annul budget TOTAL INCOME 10,479,916.84 10,479,916.84 41,577,000.00 ADMIN AND OPERATIONAL COSTS 10,479,916.84 10,969,444.19 41,577,000.00 Compensation of employees & leave provision 5,636,750.00 5,131,545.06 23% 22,547,000.00 Telephone and Faxes 140,000.00 206,816.55 37% 560,000.00 Legal and consultants costs 922,500.00 837,840.07 23% 3,690,000.00 Printing, Stationery & Postage 24,000.00 31,107.07 32% 96,000.00 Printing and Publications Serv 159,000.00 138,983.77 22% 636,000.00 Photocopy machines lease 114,000.00 113,158.09 25% 456,000.00 Travel 87,500.00 77,720.50 22% 350,000.00 Security Services 163,500.00 163,500.00 22% 758,000.00 Cleaning Expenses 174,000.00 174,000.00 25% 696,000.00 Computer Services 70,000.00 193,736.93 69% 280,000.00 Audit Fees - External & Internal 175,000.00 454,389.06 65% 700,000.00 Entertainment Expense - Internal & External 95,000.00 387.95 0% 380,000.00 Rent, water & electricity (including lease smoothing) 1,707,000.00 2,259,066.90 33% 6,828,000.00 Audit Fees 175,000.00 454,389.06 65% 700,000.00 Other expenses 836,666.84 732,803.18 25% 2,900,000.00 INCOME / (LOSS) 0.00 -489,527.35 0.00

Transactions above budget

Telephone and faxes R140 000 vs. R206 816.55The number of complaints resolved at conciliation level results in number of calls made to outside complainants and stats on number of complaints the NCC receive also justify the increase in high telephone costs.

Computer Services R70 000 vs. R193 736.93The NCC experience challenges in its email services. Our emails were originally hosted by Hetzner via the service provider because our server did not have the software licences. This resulted in high cost being charged to the NCC because the NCC did not host the emails for its entire staff. The NCC now deals directly with Hertzner and our emails have been moved to our server

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Transactions above budget - continue

• Audit Fees – External & Internal R175 000 vs. R454 389.06• The allocated budget to the NCC only increased by 5% from

last year and it didn’t include audit fees. Based on the bill estimated by the AG after we submitted the budget in January 2012, the AG fees were approximately R1 100 000. A motivation will be made to adjust the audit fee budget.

• Rent water and electricity R 1 707 000 vs. R2 359 066.90• The main difference has been caused by the monthly lease

smoothing adjustment as recommended by the AG

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Transactions below budget

Entertainment - Internal and External R95 000 vs R387.95

Internal and external expenses incorporates expenses to be paid for internal meeting with stakeholders i.e. workshops held at the NCC, expenses paid for strategic sessions, teambuilding and or year-end function etc. The budget has been reserved mainly for strategic session fees and NCC internal workshops and a major portion will be spent in the second quarter.

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