PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY
National Consumer Commission
A Progress Report
(third quarter)
24 JANUARY 2012
1

Ms Mohlala-
National Consumer Commissioner
Mr Kgabo Mantsho -
Chief Financial Officer
Mr Ntseileni Netshitoboni -
Director : Information and Communication
Technology
2

PORTFOLIO COMMITTEE ON TRADE
AND INDUSTRY
Successes and Challenges
Enforcement and Investigations
3

Complaints
•
Calls received -Average 8000 per month
•
Dropped Calls (Not Picked up because of capacity )
– 20 000 per Month
• Actual complaints-
• Reformulations -
9 709
680
• Withdrawals 237
•
Advisory Opinions 4 506
Total 15 132
Staff complements
Call Centre Agents5
Professional Staff 6
Contract Workers
–
31
Qualified Conciliators – 3( two on contract )
Total Complaints Handling staff compliment -45
4

Systems :
• 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
– 1160
Total number of resolved matters- 4 124
• 06 Compliance certificate issued thus far
•
Keeping consumers informed
5

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 TVUnfair Contract Terms, Bundling-Issued compliance
Notices to Top TV , Multi-choice
• Objections to notices
6

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)
7

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
8

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 .
9

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
10

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
11

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
12

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
13

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
14

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
15

PORTFOLIO COMMITTEE ON TRADE
AND INDUSTRY
Successes and Challenges
Legal Services Unit
16

 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
17

 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.
18

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.
19

 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.
20

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)
21

• The initial guidelines for accreditation of industry codes were published for comment on 7 th April 2011.
• Industry and interested parties provided useful comments on how best the guidelines should be formulated to cover all industry applicants.
• A seminar was held to consult and update the industry on status update and way forward regarding accreditation of codes guidelines
• The study to finalize guidelines resumed in October 2011.
• Terms of references, project plan and questionnaire were prepared to facilitate the study and finalization of guidelines.
• Three industry associations were invited to participate in the study on accreditation guidelines, Advertising Standards Authority of South Africa,
Airline industry South Africa and Consumer Goods Council South Africa
22

• We have provides advice to the
Minister on exemption application from the Council for Medical Aids Schemes
• We have recruited three interns to assist with finalization of the accreditation guidelines
23

• Finalization of the industry accreditation guidelines was postponed until end of the financial year 2011.
• Industry not ready to provides codes to commence with the study.
• Lack of resources to perform the study exercise.
• Appointment of a service provider to assist with the study did not succeed because of costs and failure to meet the terms of reference
24

Awareness Education and stakeholder
PORTFOLIO COMMITTEE ON TRADE
AND INDUSTRY
Successes and Challenges
Awareness, Education and Stakeholder unit
25

Statistical Presentation
No. of NCC Staff ( Advocacy; Education and Awareness): 7
South African Population : 48 million
Ratio: NCC staff members to population size is 1: 6. 857. 000
Outreach Category
Izimbizo : Rural Communities
Consumer Education
Number reached
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
Population in Millions
48
48
% Province
0.005 % Free State; North
West; Limpopo
1.12% Gauteng, North
West, Mpumalanga
Media( Interviews and Articles): Print and Electronic
NGO Seminars
28
Stakeholder Capacity Building
No. of
Participants
209
48
Business ( Chambers of Commerce and One-on-One) 208
58.33%
National
Province
Eastern Cape; Free State; Gauteng;
North West; KwaZulu - Natal; Limpopo;
Mpumalanga; Western Cape; Northern
Cape
Eastern Cape; Western Cape; Gauteng;
KwaZulu Natal

Awareness Education and stakeholder
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 27

Awareness Education and stakeholder
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 .
28

Awareness Education and stakeholder -
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
29

External
Awareness Education and stakeholder
• 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
30

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
31

PORTFOLIO COMMITTEE ON TRADE AND
INDUSTRY
Successes and Challenges
Corporate services unit
(financial management, Information and communication technologies and human resources)
32

• 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 efficiently
33

• Procuring the accounting and human resource
(ACCPACK and VIP payroll) software
• Adequately resourced division with most key positions filled.
34

• Late transfer of funds into NCC bank account disabling the NCC to timeously 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
35

Information and Communication Technology
(ICT)
Successes and Challenges
36

• ICT policies have been drafted
• ICT Director appointed
• Server room established
• LAN fully developed
• Computers evenly distributed
• Call centre management has been implemented
• Microsoft Software's deployed
37

• Case Management System ready for implementation
• Registration of our own domain name into
“.org.za”
38

• 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
39

The following TOR haven't been implemented due to insufficient funds
1. Business Recovery Plan (BPR)
2. ERP with the ICT plan
3. Case Management System Implementation
(Budget)
• Lack of support IT staff
• Power cuts (potential damage of the server)
40

Human Resources (HR)
Successes and Challenges
41

• HR Policies were developed and approved at
MANCO
• All positions on Chief Director level have been filled
• Total staff are 81 employees (47 on contract
34 permanent)
• 46% of staff are male and 54% are female
• 45 unemployed graduates appointed on contract (admin level)
42

• 4% of current staff are disabled
• Climate survey results were positive
• Implementation of VIP payroll system
43

• Only 32 out of 135 (24%) of approved positions have been filled (Budget constrains and under staffed)
• (2/5) 40% of staff at executive level are female and (3/5) are male
• High volume of work with only few employees
• High staff turnover rate in October - NEHAWU members going back to the dti
44

• 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.
45

Revenue
Less operational costs
Balance after op costs
R33 107 646.05
R20 628 788.91
R12 478 857.14
LESS CAPEX
IT
Computer Hardware
Furniture
Total balance after CAPEX
R3 481 466.94
R 92 000.00
R1 236 505.69
R7 668 884.51
46

Total Balance (B/F) R7 668 884.51
Other big payment to be processed in January
Payroll deductions
Rent
R 2 057 370.54
R 510 000.00
Call Centre deposit
Security
ESTIMATED BAL END OF JAN
R1 441 000.00
R 54 000.00
R3 606 513.97
47

• Thank you
• Ke ya leboha
• Nda levhuwa
48