DPE PRESENTATION ON THEFT OF COPPER CABLES 28 February 2012

TABLE OF CONTENTS THE ROLE OF SOC IN THE DEVELOPMENTAL STATETHE ROLE OF SOC IN THE DEVELOPMENTAL STATE  Infrastructure Development  Industrial Development DPE’ SHAREHOLDER ROLE & SOC GOVERNANCEDPE’ SHAREHOLDER ROLE & SOC GOVERNANCE  Striking the Healthy Balance NON-FERROUS METALSNON-FERROUS METALS  Impact on Eskom & Transnet PROPOSED SOLUTIONPROPOSED SOLUTION  Legislative Amendments 2 CONFIDENTIAL

3  Government is the only social agent with an intrinsic interest in ensuring adequate investment in infrastructure  Clear strategic signal: security of supply, bulk rail infrastructure & core network services.  However, while such investment is a pre- requisite to sustaining the economy, COPPER THEFT is disruptive to this objective. A core role of the SOC is to provide strategic network infrastructure to ensure security of supply and develop key industrial capabilities  Infrastructure investment can create demand conditions for the development of industrial capabilities.  In complex, high risk areas of manufacture, it is vital that the State takes a leading investment role to transform the economic trajectory – MAINTENANCE COSTS are a serious draw-back for SOC & Government. INFRASTRUCTURE INDUSTRIAL DEVELOPMENT

4 The DPE’s mission is to ensure that the SOC are both financially sustainable and deliver on government’s developmental objectives TO OPTIMIZE THE ALIGNMENT BETWEEN THE ROLE OF THE SOC IN THE NATIONAL ECONOMIC STRATEGY – INFRASTRUCTURE & BUILD PROGRAMS THROUGH THE CREATION OF AN ENABLING ENVIRONMENT FOR THE INFRASTRUCTURE INVESTMENTS. DPE National Interest Enterprise Interest

ESKOM & TRANSNET Transnet and Eskom raised serious concerns on the impact of cable and metal theft on their operations. Non-ferrous metals - copper, aluminum, brass, stainless steel and lead - are the core of the electric cables that transmits electricity, they make up cabling in the communications network and public transport particularly rail. RELEVANCE - these cables are key for provision of transport (Transnet), energy (Eskom) and telecommunications services (Infraco) and theft has a direct economic impact on citizens and business. SOC OWN INTERVENTION - detailed security plans and massive media drive to dissuade people from stealing copper cable CHALLENGE – copper  is still regarded as lowly metals and minor economic offence;  loss thereof is not thoroughly investigated;  the numbers are still increasing. 5

PROPOSED AMENDMENTS – DPE’S PERSPECTIVE (1) Legislative review be undertaken to ensure harsher punishment to those found guilty of theft. 6  The inclusion of “copper” in the definition of “precious metal” as defined in the Precious Metal Act, The Act defines precious metal as gold, any metal of the platinum group and the ores of such metals and any other metal that the Minister of Minerals and Energy has declared by notice in the Gazette to be a precious metal.  Amending the Second Hand Goods Act, to address gaps in the market into which the stolen metal and cable are disposed;  Enforcing the licenses necessary to trade in second-hand goods - in this way dealers who bought the stolen metal and cable will be obliged to be registered as second-hand dealers and would have to account for the goods or face criminal charges.  Current Situation - any person who is in possession of any goods which give rise to a reasonable suspicion that they were stolen and cannot give a satisfactory account of possession is guilty of an offence and liable to a fine or three months imprisonment or both.

PROPOSED AMENDMENTS – DPE PERSPECTIVE (2)  Amending the International Trade Administration Act - to ensure that trading in or exporting stolen copper is categorised as a serious economic offence;  Amending the Miscellaneous Offences Act - to ensure that theft and illegal possession of non-ferrous metals are covered by the Act and secondly, to introduce strict and harsher punishment than currently provided for;  Amending Schedule II of the Criminal Procedure Act 1977 to criminalise any offence under any law relating to the illicit dealing in or possession of precious and non-ferrous metals. 7

CONCLUSION The Department has already engaged the Department of Justice and Constitutional Development and they have indicated support for the legislative review. The Department is in the process of engaging other departments such as the Department of Trade and Industry, Department of Communications, Department of Police and the Department of Mineral Resources on these proposed legislative amendments.

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