Committing to fast track Water Use Licensing Processes within 90 days

Committing to fast track Water Use Licensing Processes within 90 days

Publication date: 

In his State of the Nation Address on 23 February 2020, President Cyril Ramaphosa made a declaration that water use licenses should be finalised within 90 days, with effect from 01 April 2020. Since this declaration, the Department of Water and Sanitation has worked tirelessly to revise Water Use Licensing Regulations in order to finalise the process within the new turnaround time of 90 days as declared by the President. 

The Minister of Human Settlements, Water and Sanitation, Ms Lindiwe Sisulu together with her team responded to this directive as given by the President. The team ensured that the process of license applications is revised in response to the new stipulated time frame.

“The revised time frame for the finalization of the Water Use License Application process will ensure that DWS is an active and responsible participant within the economic and social sectors, with a particular impact on the recovery of the South African economy. The shortened time frame will bring certainty to all applicants and users”, said Minister Sisulu.

According to the previous regulations regarding the procedural requirements for Water Use License Applications and Appeals, 300 days were prescribed to finalise this process. However, the Department of Water and Sanitation has revised these regulations and ensured that the water use license application process is finalized within 90 days.

The business processes of Water Use Licensing has been revised and significant progress has been made. These processes include pre-application Department of Water and Sanitation South Africa DWS_RSA engagement with the applicant, compilation of the required technical reports, and public participation.

The Department assesses the application which can be rejected if it is incomplete, or be accepted if the required information is complete.

When all the information required is made available, the accepted applications are assessed and a decision is made within 82 days. The final step, which lasts for 4 days, comprises post administration of the decision (a letter of rejection of the application or a license is issued) and communication to the applicant.

To fast track the process of Water Use Licensing, the Department has also involved stakeholders to participate. Various stakeholders in the water and economic sectors, including agriculture, forestry, domestic, industry and mining, have been engaged by the Department.

The Department is fully committed to have meaningful engagements with all interested stakeholders to unlock delays and fast-track water use licenses to within 90 days as it was specified by the President”, said Mr Singh.

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Tongaat Hulett sells agribusiness in Eswatini for R375m

Tongaat Hulett sells agribusiness in Eswatini for R375m

The sale of the country’s largest independent sugar estate comes as Tongaat seeks to reduce debt by R8.1bn by March 2021

Sugar producer Tongaat Hulett, which is seeking to reduce its debt by R8.1bn by March 2021, says it has agreed to sell an agribusiness in Eswatini (previously Swaziland) for R375m. 

The sale of Tambankulu Estates includes two agricultural estates astride the Black Umbuluzi River in northeastern Eswatini, with 3,767ha under cultivation.

The purchaser is Eswatini’s Public Service Pensions Fund.

Tongaat Hulett acquired Tambankulu in 1998, and the transaction is expected to be concluded on December 1. Tambankulu is the largest independent sugar cane estate in Eswatini with an average annual yield per hectare of 125 tonnes, Tongaat said.

“Tambankulu’s farms are modern, using hi-tech irrigation systems, fertigation, artificial ripeners and herbicides,” the group said.

The sale comes as Tongaat pursues a revival strategy that includes slashing its R13bn in debt by about 60%, tapping shareholders for about R4bn, and selling assets after a weak operational performance in recent years coincided with allegations of dubious accounting practices. 

As part of the plan under relatively new CEO Gavin Hudson, Tongaat struck an agreement with Barloworld in February to sell its starch business for up to R5.3bn.

The deal is in jeopardy after Barloworld triggered a material change clause — a rarely invoked clause in M&A that allows buyers to withdraw from deals if the value of the transaction has been undermined by a significant development. Tongaat disagrees that Covid-19 has been sufficient to trigger this clause, and the issue is being referred to a third party.

Barloworld said, earlier this month, that the coronavirus would have a material impact on the value of the starch business.

The industrial group said then that the starch business was likely to face a 17.5% drop in annual core profit, stating that the pandemic, which has had an adverse effect on industries, would lead to a scramble for cash and that economists have projected one of SA’s steepest recessions yet.

Tongaat and Barloworld are to appoint an independent accountant tasked to determine whether Tongaat can go ahead with the deal or exit it altogether. In May, Barloworld said the process would take between six and eight weeks.

“We are confident about the future of Tongaat, and that the disposal of Tambankulu will help to further position the group for longer-term sustainability and value creation for Tongaat shareholders,” Hudson said on Wednesday.

In morning trade, Tongaat’s share was 1.50% lower at R5.27, having fallen more than 95% over the past three years.

This article first appeared in Business Live and was authored by Karl Gernetzky

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The cannabis industry in SA – still a field of dreams

The cannabis industry in SA – still a field of dreams

The industrial, medical and recreational potential of the cannabis plant is touted as being worth between $150bn and $250bn. South Africa could be a world leader in this emerging industry, but rather than being bold, the government is fiddling with incremental changes to legislation.

The market for cannabidiol products has exploded in South Africa in the past year, with drops, vape products, teas, supplements and rubbing oils available at outlets ranging from health shops to flea markets.  

The floodgates were opened in May 2019 when the minister of health enabled non-prescription access to certain cannabidiol (CBD) products with the publication of a 12-month “exemption notice” on these products.

This allowed the sale of CBD products as long as they contained no more than a 20mg “daily dose” of CBD, and made no specific health claims about the product’s ability to treat disease or serious symptoms. 

At the same time, the minister lowered CBD formulations above those thresholds from Schedule 7 to Schedule 4.  

Previously, CBD was a medical no-no because it was a component of cannabis; thus lowering CBD to Schedule 4 meant it could be prescribed by medical professionals when intended for therapeutic purposes.

This notice expired on 23 May, and new regulations were scheduled in the nick of time, on 22 May.

While activists campaigning for a lighter regulatory touch argue that nothing has changed, the new schedules do provide some indication of the route that the government wants to take with regard to the “holy herb”.

The new schedules have made permanent the changes introduced last year, with some amendments.

For a start, tetrahydrocannabinol or THC, the main psychoactive constituent of cannabis, is now listed in Schedule 6, replacing dronabinol, a specific THC formulation that contains cannabinoids.

“This is significant, because it means cannabis is being acknowledged as having medicinal benefit,” says Paul-Michael Keichel, a partner at Schindlers Attorneys. “Prior to this, it was treated as having no medicinal benefit.”

“Low dose” CBD products are now Schedule 0, where before they were excluded from the medicines schedules. But “this is not a free pass,” he says.

Schedule 0 substances are still scheduled and under the amended regulations are now classified as complementary medicines.

This is important. 

Under the exclusion notice, there was no need for importers, wholesalers or distributors to be licensed to produce or distribute these CBD products. Nor did they need to prove to the regulatory authorities that the product complied with its labelling. 

Now every person in the value chain, except for retailers, will require a 22C licence (of the Medicines Act) to manufacture, import, export, wholesale or distribute these products, says Keichel.

Products, where the dosage of CBD is above the prescribed limits, remain on Schedule 4 and will require a prescription for dispensing. 

“The rules around complementary medicines are extremely burdensome,” says a spokesman for the Traditional and Natural Health Alliance, which last month took the Department of Health and the South African Health Products Regulatory Authority (SAHPRA) to court in a bid to overturn the regulations governing complementary medicine.

“This will harm small and medium-sized businesses currently involved in the CBD product industry because they now have to comply with rules better suited to the production and distribution of scheduled medicines,” the spokesperson said. 

This adds a logistical, technical and financial burden to small companies and will add to the cost of doing business.

Where the new schedules do shed light is that the minister has attempted to resolve the grey area that was commercial hemp production.  

Substances (fibres and other materials from the cannabis plant) that are now used in the manufacture of hemp products – clothing, rope, bricks, paper, nappies, biofuel, there are thousands – are now exempt from the scheduling of the Medicines Act.

Before, a licence was required from SAHPRA to grow hemp, but this now falls under the ambit of the Department of Agriculture – a vast improvement. However, Keichel notes that the levels of cannabinol that a product must fall below to be called “hemp” are nonsensical, as SA does not have sensitive enough tests to detect such low levels.

“We have tried to meet with them to determine a way forward that is acceptable to the government and the community but they insist on following a top-down approach. This is an opportunity for the government to work with its people. We can be a world leader in 5-10 years.”

While the Department of Agriculture is scrambling to get its act together, there is another problem. Hemp is considered cannabis in the Drugs and Drug Trafficking Act, which now needs to be amended.

“The new scheduling is a step in the right direction,” says Pierre van der Hoven, entrepreneur and CEO of AfriCannaBiz. 

“But the fact remains that South Africa’s cannabis policy is incoherent, resulting in complex legislation that is preventing a start-up industry that has the potential to empower small-scale farmers and entrepreneurs, from taking root.”  

Gareth Prince, chair of the Cannabis Development Council and a lawyer who has been advocating for the legalisation of cannabis for more than 20 years, does not believe government sees the same potential in the industry that the rest of the world sees. 

“Government has no vision for South Africa’s cannabis future,” he says.   

“The economic power of this is immense, yet they will not empower black and brown people because they are held back by irrational fears. The challenge of substance abuse is not met with criminal legislation. That is a social problem that needs to be dealt with.”

Prince led the case that saw Constitutional Court Justice Raymond Zondo decriminalise the personal and private use of cannabis in September 2018.

Zondo gave the government 2 years to amend the legislation in this regard, notably the Criminal Procedure Act, the Drugs and Drug Trafficking Act and the Medicines and Related Substances Act (of 1965!). 

By all accounts, Parliament will miss this September deadline. 

“The Department of Justice has done jackshit in this regard. We are 20 months past the court judgment,” Prince says. 

“We have tried to meet with them to determine a way forward that is acceptable to the government and the community but they insist on following a top-down approach. This is an opportunity for the government to work with its people. We can be a world leader in 5-10 years.”

Government, it seems, does want to unlock the value of this nascent industry, but it will do so at its own pace. BM/DM 

This article first appeared in the Business Maverick and was written by Sasha Planting

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The impact of Covid-19 on South Africa’s agriculture economy

The impact of Covid-19 on South Africa’s agriculture economy

We are all living through something the severity of which we have never experienced before and are currently in the 64th day of lockdown. There have, of course, been pandemics before. The plague or Black Death of the mid-1300s resulted in between 75 and 200 million human deaths, while 100 million people perished due to the Spanish flu in 1918/19. In the late 1950s, Asian flu (H2N2) infected more than a million people, resulting in approximately 116,000 deaths, and in 2009/10 a strain of H1N1 infected 1,4 billion people and killed around 50 million.

Agriculture has been declared a critical industry and as such is exempt from the harshest lockdown regulations. However, job losses in the agriculture sector will be an unintended consequence of lockdown. In South Africa, this will be a major spoke in the wheel of government’s ambition to increase employment in agriculture and agro-processing by a million jobs by 2030.

Now, in 2020, we are faced with Covid-19. The fortunate thing is that science has progressed tremendously with respect to understanding diagnostic technologies, the epidemiology of disease, vaccine development technologies and screening for antiviral treatments. However, for now, there is no treatment or vaccine.

What we do know is that Covid-19’s mortality rate is higher than that of the 2009 H1N1 virus, and it is far more infectious.

To slow down the spread of the pandemic in order to give healthcare systems time to prepare, governments worldwide have enacted varying levels of social distancing and lockdown. This response is having a massive negative impact on our already struggling economy.

While agriculture has been declared a critical industry and as such is exempt from the harshest lockdown regulations, the industry as a whole, and secondary agricultural industries in particular, are feeling the consequences.

Food production value chains are operational, albeit not at optimal levels, which is causing bottlenecks and blockages that will lead to product losses.

For example, with restaurants closed, the demand for high-end meat cuts has dwindled to the point that some feedlots are not buying-in cattle, putting their businesses and jobs at risk. Similarly, the throughput at abattoirs is down.

As farmers are forced to keep more sale-ready animals back, they need to spend more on feed and routine stock remedies such as vaccines and supplements, while not generating an income from those sale-ready animals. However, we are already seeing that farmers buy less essential and preventative medicines. The knock-on effect on co-ops is significant. As turnover decreases, co-ops are letting their stock levels decline, in turn affecting their suppliers.

Similar situations prevail in other segments, especially the poultry sector where the single biggest purchasers of broilers – the fast-food chains such as KFC and Nando’s – are closed. In the companion animal sector, the picture is even worse. Vets attend to emergency cases only. Walk-in consults, routine vaccinations and non-emergency procedures just do not occur.

Job losses in the agriculture sector will be an unintended consequence of lockdown. Constraints on the movement of labourers, especially seasonal and migrant workers, are and will lead to increased automation and mechanisation. In South Africa, this will be a major spoke in the wheel of government’s ambition to increase employment in agriculture and agro-processing by a million jobs by 2030.

What will the economic recovery be like?

Studies of the economic impacts of epidemics and pandemics in 1918, 1957/8, 1968 and 2003 show a deep but steep V-shaped drop and recovery, followed by positive growth. I believe we will experience the same. In particular, I believe that the positive side of human nature will take over. The joy of having survived the crisis will stimulate all to work, invest and spend.

After lockdown, trade outlets like cooperatives, wholesalers and veterinarian practices will be low on stock and we can expect good sales as they fill their shelves. As markets stabilise, farmers too will again start using essential stock remedies and veterinary medicines.

When will this be? I am no expert, but my guess is that a relaxation of lockdown will start the recovery and that once we know the infection peak is behind us (probably by September 2020) we will see relief, happiness and optimism that will drive economic improvement, supported by what I believe will be a government-driven “Marshall Plan”.

Keep well, keep strong and together we can make this work.