PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY

National Consumer Commission progress report

(third quarter)

15 FEB 2012

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DelegationMs Mohlala-

National Consumer Commissioner

Mr Kgabo Mantsho -

Chief Financial Officer

Mr Ntseileni Netshitoboni -

Director : Information and Communication Technology

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PORTFOLIO COMMITTEE ON TRADE

AND INDUSTRY

Successes and Challenges

Enforcement and Investigations

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Compliants Handling status Complaints

• Calls received -Average -8000 per month• Dropped Calls (Not Picked up because of capacity ) – 20 000 per Month

• Actual complaints- 9 709 • Reformulations - 680 • Withdrawals - 237• Advisory Opinions - 4 506 Total 15 132

Staff complements

- Call Centre Agents- 5- Professional Staff -6- Contract Workers –31- Qualified Conciliators – 3( two on contract )- Total Complaints Handling staff compliment -45

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Complaints handling successesSystems:

• Enforcement guidelines, • developed procedure manual / standard operating procedures • Developed work streams and Categorization of complaints , • Bulk disposal

Resolution of Complaints• Resolution rate still at 42.5%• Consent agreements concluded: 2301 • Compliance notices issues – 301• Referrals and Non referrals –362• Conciliations – 1160Total number of resolved matters- 4 124• 06 Compliance certificate issued thus far• Keeping consumers informed

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INVESTIGATIONS SUCCESSES

ICT Sector

• The Mobile operators: Transgressions: Section 48 Unfair Contract

terms, Section 63- expiry of minutes; Section 54; Limitation of

liability - Regulation 44(3), Section 14(1) fixed terms contracts –

Issued Compliance Notices –Objections raised

• Pay TV- Unfair Contract Terms, Bundling-Issued compliance

Notices to Top TV , Multi-choice

• Objections to notices

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INVESTIGATIONS SUCCESSES continued

• Public Broadcaster: SABC - The disclosure of information about the terms and conditions of TV Licenses – Television licence terms and conditions Finalised by NCC– Consent Agreement Drafted discussions to be concluded – Section 54- Availability of SABC Radio Station’s Frequencies

and Broadcasting Coverage Services: • Requested and received low-power transmitter expansion plan of

the SABC• Prepared and distributed questionnaires to over 140 NGO’s across

the 9 province – received few responses (out of Emails sent out 4 responded)

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INVESTIGATIONS SUCCESSES continued

Compliance with -Section 48 – Unfair Pricing – Pre-paid Data-Section 63 of the CPA Identified 7 ICT entities that have terms and

conditions for Data Bundle : G Connect Vodacom, MTN, FNB Connect, I BURST, Telkom -8ta -The terms and Condition of the entities – negotiations communication with entities underway to ensure compliance

International Roaming Service charges-Triggered by complaints received :28 Agreement to be assessed: Applicable tariffs, comparative analysis -Service provider to be appointed

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INVESTIGATIONS SUCCESSES continued

Goods and Services in the Medical and Pharmaceutical Industry-

• Open Medical Schemes-Top four Medical scheme rules, membership application forms/contracts in-depth analysis into those rules and membership application forms/contracts.

• The rules and contracts of the following 4 open medical schemes were analyzed: Fed-Health, Bonitas, Medshield Medical Schemes and Momentum :

• Right of consumers to select suppliers –DSPs, Unfair contract terms (excessively one sided clauses – the right to suspend terminate contracts, Waiting period- discriminatory practices, Unilateral changes to terms and conditions .

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INVESTIGATIONS SUCCESSES continued

• Consultations with all top four Schemes and Council for medical Aid Schemes

• Concluded interactions with open medical Aid schemes

• Report to be finalized by 15 December 2011

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INVESTIGATIONS SUCCESSES continued

• Pharmaceutical Industry -Goods and services offered and

supplied within the pharmaceutical industry: Costing of Medicines:

Advertising and Marketing, Disclosure of Prices

• Confirmed with Medicines Control Council to establish a task team

on the MOU between the MCC and the NCC

• Workshop with the Pharmaceutical Steering Committee held -

Identified the following

• Disclosure of Information

• Fair Pricing

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INVESTIGATIONS SUCCESSES continued

• Retail and Manufacturing: Disclosure of prices of goods and services in terms of section 23;Consumer’s right to return goods in terms of section 20 read together with section 56. Lay – bys in terms of section 62 and regulation 34;

• The Retail and Manufacturing investigation focused on the retail outlets were inspections were conducted,

• The Commission sent correspondence to retailers who had not responded to the compliance letters forwarded in quarter 2.

• Checkers Shoprite –Meeting – information and Correspondence still under review

• Pick and Pay, –First was on Interaction- 07 December 2011 • Lewis Group • JD Group – Interactions under way • Pumpkin Patch – response received – still to meet

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INVESTIGATION SUCCESSES continued

– Nationwide inspection – Focus; rural areas (NPA and SAPS – Partnership)-Returns and refunds; Price disclosures/ Trade Descriptions- Code of Conduct , quality service –section 54 and 55

– Inspection in townships and other retailers

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INVESTIGATION SUCCESSES continued

• Public Transportation Industry – Section 63

• Tickets: Voucher utility expiry period: Ticketing policies assessed-

• Letters sent to Entities

• Putco (responded to Commission’s)

• North West Transport

• Metrorail

• Gautrain -response letter received

• The Commission has met with Gautrain in October 2011

• To include privately owned public transportation on compliance

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OPERATIONAL CHALLENGES

• Insufficient budget impacting on the efficiency of the office

• Insufficient capacity in relation to human capital with relevant

expertise

• IT challenges i.e. Telephone system , insufficient computers

• Manual operation hampers efficiency of the office

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Legal services unit

PORTFOLIO COMMITTEE ON TRADE

AND INDUSTRY

Successes and Challenges

Legal Services Unit

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Legal services successes The NCC came into being in April and has already issued many

Compliance Notices. At this point we have fifteen matters before the National Consumer

Tribunals. These are big matters the resolution in favour of consumers of

which will have real impact in favour of consumers throughout the telecommunications sector.

We have managed to maximize our resource to avoid unnecessarily using the services of external services providers for example vetting all agreements we enter into with external services providers like lease, software licenses etc, doing Industry codes internally, doing guidelines on advisory opinions internally etc. This has saved the Commission hundreds of thousands of Rands

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Legal services – successes continued

We have managed to agree a reduction of legal costs with various Attorneys and Advocate without compromising the quality of the work and that has saved us money.

Without a dedicated call center and file management system, we have managed to take in more than hundreds of thousands of complaints which is never easy to do manually.

We have recruited within the legal department, eight legal graduate who are currently undergoing training when we could have recruited people who does to necessarily require training in line with government policy on skills transfer and training.

•

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Legal Services - Challenges

One of the most expensive to run department within the NCC is legal. This costs of Counsel, which can be as a High as R 75 000 a day to run one matter

The one challenges is that the systems of the NCT has for long been dealing with the NCR and it has been a big challenge adjusting receiving a new agency.

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Legal Services - Challenges continued

Although it has been mentioned as a success, but using internal resource s to do some work that could have been done by external resources and could not be done due to limited financial resources has taken human resources away from the legal department from doing administrative and policy analysis

Human Resource has been one of the biggest challenges. Currently the structure makes provision for six Legal Advisors and we do not have any due to budgetary.

The Department is also in need of research tools i.e. law reports etc.

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Legal : Exemptions and Accreditation of Industry Codes (EAIC)

PORTFOLIO COMMITTEE ON TRADE

AND INDUSTRY

Successes and Challenges

Legal : Exemptions and Accreditation of

Industry Codes (EAIC)

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EAIC successes• The initial guidelines for accreditation of industry codes were published for The initial guidelines for accreditation of industry codes were published for

comment on 7comment on 7thth April 2011. April 2011.

• Industry and interested parties provided useful comments on how best the Industry and interested parties provided useful comments on how best the guidelines should be formulated to cover all industry applicants.guidelines should be formulated to cover all industry applicants.

• A seminar was held to consult and update the industry on status update and A seminar was held to consult and update the industry on status update and way forward regarding accreditation of codes guidelinesway forward regarding accreditation of codes guidelines

• The study to finalize guidelines resumed in October 2011.The study to finalize guidelines resumed in October 2011.

• Terms of references, project plan and questionnaire were prepared to Terms of references, project plan and questionnaire were prepared to facilitate the study and finalization of guidelines.facilitate the study and finalization of guidelines.

• Three industry associations were invited to participate in the study on Three industry associations were invited to participate in the study on accreditation guidelines, Advertising Standards Authority of South Africa, accreditation guidelines, Advertising Standards Authority of South Africa, Airline industry South Africa and Consumer Goods Council South AfricaAirline industry South Africa and Consumer Goods Council South Africa

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successes• We have provides advice to the We have provides advice to the

Minister on exemption application from Minister on exemption application from the Council for Medical Aids Schemesthe Council for Medical Aids Schemes

• We have recruited three interns to We have recruited three interns to assist with finalization of the assist with finalization of the accreditation guidelinesaccreditation guidelines

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EAIC challenges • Finalization of the industry accreditation guidelines Finalization of the industry accreditation guidelines

was postponed until end of the financial year 2011.was postponed until end of the financial year 2011.

• Industry not ready to provides codes to commence Industry not ready to provides codes to commence with the study.with the study.

• Lack of resources to perform the study exercise.Lack of resources to perform the study exercise.• Appointment of a service provider to assist with the Appointment of a service provider to assist with the

study did not succeed because of costs and failure study did not succeed because of costs and failure to meet the terms of referenceto meet the terms of reference

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Awareness Education and stakeholder

PORTFOLIO COMMITTEE ON TRADE

AND INDUSTRY

Successes and Challenges

Awareness ,Education and Stakeholder

unit

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No. of NCC Staff ( Advocacy; Education and Awareness): 7South African Population : 48 millionRatio: NCC staff members to population size is 1: 6. 857. 000

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Statistical Presentation

Consumer Education

Outreach Category Number reached

Populationin Millions

% Province

Izimbizo: Rural Communities 2500 48 0.005 % Free State; North West; Limpopo

Consumer Workshops : Stokvel Women; Youth; School Children on Nelson Mandela Day; Educators; Department of Public Works; Independent Electoral Committee; Kagiso Community Church; Pretoria Post Office; the dti Exhibition : Taking the dti to the people; taxi and train commuters and malls)

4274 48 1.12% Gauteng, North West, Mpumalanga

Media( Interviews and Articles): Print and Electronic 28 48 58.33% National

Stakeholder Capacity Building

No. of Participants

Province

NGO Seminars 209 Eastern Cape; Free State; Gauteng; North West; Kwa-Zulu Natal; Limpopo; Mpumalanga; Western Cape; Northern Cape

Business ( Chambers of Commerce and One-on-One) 208 Eastern Cape; Western Cape; Gauteng; KwaZulu Natal

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Awareness Education and stakeholder- successes

Consumer Education

• Rural Outreach: Izimbizo ( North West; Free State and Limpopo)- 2500

• Consumer Workshops : Stokvel Women; Youth; School Children on Nelson

Mandela Day; Educators; Department of Public Works; Independent Electoral

Committee; Kagiso Community Church; Pretoria Post Office; the dti Exhibition

: Taking the dti to the people; taxi and train commuters and malls)- 4274

• Media ( Interviews and Articles): Featured on 20 publications ( print and

electronic)- Nationwide

• Business Education ( Presentations/ Meetings): Chambers of Business and

directly to business- 208

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Awareness Education and stakeholder - successes continued

Standing Advisory Committees

• TOR developed; Adverts placed with newspapers; Meetings held

with Disabled Persons South Africa and Provincial Consumer Affairs

Offices; Nominations received from BUSA, Continuous engagement

with other government departments such as the Department of

Women Children and Persons with Disabilities.

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Awareness Education and stakeholder - successes continued

Accreditations of Consumer Protection Groups

. Workshops held for advice offices throughout the 9 provinces (208

participants); Study on state of readiness to assist consumers in line with

the CPA completed.

SADC outreach

• Road show underway to SADC, Zimbabwe visited

• Meeting held with SADC secretariat in Botswana

• To host a conference in March 2012 to launch a SADC Sub-Committee on Consumer Protection

 

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Awareness Education and stakeholder - Challenges

External

• Province to Province Cultural Diversity : (Norms and Traditions; power struggles)

• Political Diversity: Use of certain terms ( Imbizo) said to have political connotation linked to a certain political party

• Provincial Budgetary constraints for cooperative initiatives

• Political/ Traditional Factions: Barrier to entry

• What is in it for me attitude: Barrier to entry

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Awareness Education and stakeholder - Challenges continued

Internal

• Budgetary Constraints: Biggest Cost Driver, budget inadequate

• Human Resource Limitations: 80% of staff complement are contract workers and require intense training

• Inadequate IT equipment and systems

• Inadequate Internal processes

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CORPORATE SERVICES

PORTFOLIO COMMITTEE ON TRADE AND

INDUSTRY

Successes and Challenges

Corporate services unit

( financial management, Information and

communication technologies and human

resources)32

Financial management successes

• Drafting of financial policies and procedures• Setting up the following committees : bid

evaluation, bid adjudication and audit committee• Complying with shareholder compact agreement

and preparing monthly financial statements and relevant quarterly reports

• Setting up the audit committee• Getting NCC budget in its own account and

managing it efficiently33

Financial management – successes

• Procuring the accounting and human resource (ACCPACK and VIP payroll) software

• Adequately resourced division with most key positions filled.

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Financial management – challenges

• Late transfer of funds into NCC bank account disabling the NCC to timorously pay its service providers

• Budget constraints that negatively impact the business strategy

• Sharing responsibility of signing March 2012 financials (the Dti & NCC)

• Transfer of assets from dti Fixed assets register

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Information and Communication Technology (ICT)

Successes and Challenges

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ICT -Sucesses

• ICT policies have been drafted• ICT Director appointed• Server room established• LAN fully developed• Computers evenly distributed• Call centre management has been

implemented• Microsoft Softwares deployed

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ICT - Sucesses

• Case Management System ready for implementation

• Registration of our own domain name into .org.za

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ICT - challenges

• Realignment of the strategic approach• Integration of different areas into the strategy• Lack of support IT staff• No ownership of website• Struggling to get Telkom/Neotel line due to

theft of copper

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ICT challenges continued

The following TOR haven't been implemented due to insufficient funds

1. Business Recovery Plan (BPR)2. ERP with the ICT plan3. Case Management System Implementation

(Budget)• Lack of support IT staff• Power cuts (potential damage of the server)

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Human Resources (HR)Successes and Challenges

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HR - Successes

• HR Policies were developed and approved at MANCO

• All positions on Chief Director level have been filled

• Total staff is 81 employees (47 on contract 34 permanent)

• 46% of staff is males and 54% is female• 45 unemployed graduates appointed on

contract (admin level)42

HR - Sucesses - continued

• 4% of current staff is disabled• Climate survey results were positive• Implementation of VIP payroll system

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HR Challenges

• Only 32 out of 135 (24%) of approved positions have been filled (Budget constrains and under staffed)

• (2/5) 40% of staff on executive level is female and (3/5) is males

• High volume of work with only few employees• High staff turnover rate in October - NEHAWU

members going back to the dti

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HR challenges - continued

• Poor communication between NCC and the dti on staff issues;

• Lack of performance management system;• Lack of relevant skills in the market i.e. senior

investigators and researchers, statistician.

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YTD Budget Summary31 December 2011

Revenue R33 107 646.05Less operational costs R20 628 788.91Balance after op costs R12 478 857.14

LESS CAPEXIT R3 481 466.94Computer Hardware R 92 000.00Furniture R1 236 505.69Total balance after CAPEX R7 668 884.51

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YTD Budget Summary31 December 2011 - Continued

Total Balance (B/F) R7 668 884.51

Other big payment to be processed in JanuaryPayroll deductions R 2 057 370.54Rent R 510 000.00Call Centre deposit R1 441 000.00Security R 54 000.00 ESTIMATED BAL END OF JAN R3 606

513.9747

Conclusion

• Thankyou

• Ke ya leboha

• Nda levhuwa

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