Media Releases

Inside OUTA Jan-Feb 2016

Jan-Feb Inside Outa

In this issue
Message from the Chairman
Outa’s new journey and expanded mandate
SANRAL threatening ‘listing’ in e-toll SMS
OUTA in awe of public participation
Causes on the horizon: The nuclear deal,  waste tyre tax, tariff hikes proposed by  Eskom, South African Airways


Message to all our members

Good day fellow Active Citizens
The new year has started at pace, and January saw OUTA’s work give rise to South Africa’s largest public participation in law-making, when over 117,000 submissions were made to Government on the Aarto amendment gazette by 6 January 2016.  Then on the 26th January, we presented OUTA’s overview to the Parliamentary Portfolio Committee on Transport, by providing our insight and opinions on why the e-toll scheme has failed, and why the fuel levy needs to be taken seriously as an alternative mechanism to pay for the GFIP.  In addition, we cautioned the committee on the forthcoming plans by Government to enforce e-tolls through the license renewal process.

Despite the fact that a couple of the MP’s present chose not to grasp the messages and issues we tabled, we can rest assured that our case has now been tabled before the Parliamentary committee.  The fact that a few members felt it necessary to castigate our points tabled, they cannot ignore the facts and reasons of the scheme’s failure, which was provided in no uncertain terms in our presentation.

In February, OUTA’s role as a growing civil intervention organization will be explained at a media conference, at which we intend to provide more detail about why, what and how our expanded role will evolve. Our new web platform will be unveiled, along with an insight as to our strategic intent and a look at some of the additional causes we will be tackling.
Let me assure all that the e-Toll issue remains at the forefront of our focus and attention, along with the E-Toll Defence Umbrella and our commitment to fight for the rights of our members.

OUTA’s growing team, capacity and robust systems, will enable our new work.  But it is a journey, as opposed to an over-night transition, and one which we trust you will remain part of and continue to support us, as we strengthen our resolve and tackle some of the serious matters that need to be challenged in South Africa today.

To our contributing members, we thank you for your support. You provide us with the means and ability to do our work in fighting for citizen’s rights.

Have a splendid 2016.

Wayne Duvenage
OUTA Chairman

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OUTA’s new journey and expanded mandate

OUTA has started on a journey of expanding its mandate into other areas where the need to challenge policy, laws and conduct that lead to or are responsible for tax abuse.

tax-question

Over the past two years, we have been asked by the public and other organisations to consider a look into other concerns of a similar nature, that arise from time to time. As one can imagine, our country has no shortage of issues that require challenging in this regard, but the secret is to ensure that we handle this growth and transition as a journey.  We most certainly cannot attend to the myriad of issues that urgently seek attention.  Furthermore, this is not a growth and strategy that can be turned on at the flick of a switch.  As such, OUTA is finalising its cause selection criteria to ensure the issues we challenge are real, necessary and will meet our mandate, vision and capabilities.

Furthermore, OUTA is by no means abandoning the e-toll challenge, which for all has been acknowledged as raising an extremely successful campaign to date, with only 9% of Gauteng Freeway users paying toward the ill-conceived scheme.  On the e-toll issue, we remain focussed and committed to the end, whilst providing the protection offered to our contributing members under the e-Toll Defense Umbrella.

Our plan going forward, will be to finalise our methodology and processes of project selection and engagement, along with platforms and programs we intend to deploy. This will be provided in greater detail and clarity at a more formal media conference planned for mid-February.

Our brand acronym of OUTA remains in place, but it will shortly stand for “Organisation Undoing Tax Abuse”.  The outcomes we seek for each cause we take on, will be clearly explained as to why we are involved, what the issues are and how we intend to deal with the matter.  The ultimate outcomes sought for each cause will be driven by our view of what the best interests of society at large ought to be, in each instance.  Our tools and platforms will ensure we adopt a very participative and inclusive approach in the work we conduct.

Organised civil society has always played an important role in South Africa’s past and the extent of our country’s future prospects requires that we continue to work hard to protect the people’s rights.  We have a good constitution and an effective legal system that should be put to work in holding our political authorities accountable to the people in certain areas of policy, law and conduct.  We believe that Government and members of the public service who are serious about reducing corruption and maladministration, will or should embrace organisations such as OUTA, as we are all on the same side of Team SA.  Those who feel otherwise and who blatantly self enrich or waste our taxes, may just feel the heat of the new OUTA in time to come.

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SANRAL threatening ‘listing’ in e-toll SMS

We have informed our members to not be intimidated by this SMS, as members enjoy protection under OUTA’s e-Toll Defence UMBRELLA, should Sanral issue summons against them for the non-payment of e-Tolls.

sms

Sanral launched a new tactic of intimidation by sending SMS messages to motorists with outstanding e-toll bills. These messages were split into three parts:-
– Listing user’s current outstanding e-toll balance.
– An indication of the discount they will receive if they settle now, during the 60% discount period.
– A message of intimidation which says “Failure to settle outstanding e-Toll will result in a loss of this discount, vehicle listing, and collection action being commenced against you for the full amount due”.
OUTA have informed their members to not be intimidated by this SMS, as members enjoy protection under OUTA’s e-Toll Defence UMBRELLA, should Sanral issue summons against them for the non-payment of e-Tolls. To become a member of OUTA, click here.
“When enquiring with the Sanral call center about what exactly “vehicle listing” and “collection action” means, we received no clear indication from three different staff members,” says Wayne Duvenage, OUTA’s Chairperson. “This is clearly an intimidation tactic but what’s more, the fact that SANRAL are sending questionable unsolicited messages to people, without an “opt-out” option from receiving further intimidation messages, could be deemed unlawful.  There is no qualification within these messages that this debt belongs to a specific person or vehicle registration number.
OUTA’s legal team is investigating the possibility that Sanral or their agents might be transgressing section 45 of the Electronic Communications and Transactions Act by sending unsolicited communications to persons without giving them the option to opt out or being able to confirm where they obtained their personal details.
“ As per the act, ‘communicating with persons in this manner could be a criminal offence with a fine or prison sentence of up to 12 months’,” says Duvenage

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OUTA in awe of unprecedented public participation

OUTA congratulates the public for over 117 000 submissions tracked through our web site, in order to respond to Government on the proposed amendment to the Administrative Adjudication of Traffic Offences Act.

well-done

This is arguably the largest amount of submissions ever received by government to proposed legislation amendments. The public will no doubt look forward to receiving feedback from the authorities on their inclusion of these submissions into their decision. Unlike petitions, Gazette comments have a critical role in the constitutional process and cannot be ignored by government, as it would open the door for a legal challenge by civil society.

This overwhelming public participation to a gazette is an indication of a growing active citizenry on a grand scale. It is also another major step in the fight against government’s efforts to coerce motorists into paying e-tolls, and is likely to stop government from being able to allege that such amendments are only opposed by a few people who have a problem with e-tolls, as they did with the declaration of the Gauteng freeways as toll roads.

Through various amendments to the AARTO Act and in media releases, government have made it clear that they are gearing up to use the AARTO Act and the Road Traffic Infringement Agency (RTIA), to collect outstanding e-toll fines and debt. By doing so, Sanral – through the RTIA – will attempt to coerce motorists into compliance by withholding vehicle licences, drivers licenses and driver’s permits for non-payment of e-tolls. OUTA has developed a multi-faceted strategy to protect its members against government’s attempts to stifle their rights.
Vusi Mona’s comments of 6 January are severely downplaying the seriousness of the implications and consequences that could very well transpire if these regulations are passed.

If the proposed amendments are signed into law, government intends to use the AARTO procedure as follows to collect e-toll debts:
– Non payment of e-tolls will be deemed a violation of section 58(1) of the National Road Traffic Act, i.e. failure to obey a traffic sign instructing a motorist to pay tolls.
– Infringement notices will be sent to motorists via normal mail, e-mail or sms. Previously infringement notices had to be sent via registered post.
– All documentation sent by the RTIA will be deemed to have been received by the motorist within 10 days of having been sent.
– Even if a motorist does not receive any of the documents and fails to settle these payments and ‘fines’, an enforcement order will be issued against the motorist together with an automatic instruction to block the issuing of any motor vehicle licence, driver’s license or professional drivers permit.
– Driving without a vehicle licence, drivers licence or professional permit is a criminal offence.

OUTA believes these amendments will have a detrimental impact on the public’s rights to freedom of movement, and they should be deemed as unconstitutional. Furthermore, they will make the administration of Aarto unworkable and will most likely drive a justified public revolt against the payment of vehicle licences.  If Mr Mona believes this warning as raised by OUTA is misplaced or unlikely, just as Sanral believed prior to the civil disobedience campaign against e-tolls, he clearly has still not realized the extent and the power of the people.

OUTA’s multi-pronged strategy to protect its members will entail amongst other things; the obtaining of interdicts forcing licensing authorities to issue licence and permits that were unlawfully withheld; the seeking of personal cost orders against senior officials responsible for giving instructions to withhold licenses and permits; the striking down of legislation unlawfully authorising government to withhold licenses and permits for non-payment of e-tolls; and the defence of their members in criminal court if summonsed for non-payment of e-tolls and or driving an unlicensed vehicle, as a result of the non-payment of e-tolls.

“If government follows through with these ludicrous amendments, we will be ready to challenge them. When this happens, the merits of the legality of e-tolls can once and for all be tested in a court of law, and Sanral will not be able to escape the arguments that need to be heard in a collateral challenge, which will obviate the technicalities in Administrative Law which allowed them to escape last time.  They will then have to answer to the numerous transgressions and irrationalities of an unworkable system,” said Wayne Duvenage, Chairperson of OUTA.

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Cases on the horizon

In preparation for our broadening of its mandate, we have tentatively identified the following matters that require research and further engagement with government.

nuclearThe Nuclear deal

The allegations doing the rounds is that should south Africa proceed with the nuclear deal, the cost of the deal could have dire financial consequences for the nation, putting South Africa into enormous debt. The costs are estimated in excess of R500 billion, some estimating the costs could be in excess of R1 trillion. The initial cost of the Medupi power station was estimated at R32 billion, is currently in excess of R150 billion and OUTA contracted energy analyst, Ted Blom, estimates the finishing costs to be in the vicinity of R300 billion. If Medupi is anything to go by, the project overruns could be devastating to the South African economy. Previous finance minister Nene, is alleged to have been removed for amongst other things his opposition to the nuclear deal in the current economic climate. There are also questions surrounding the determination published recently, stating that government are gearing to proceed with the procurement of a 9600 megawatt nuclear power station. The determination was signed in November 2013 by then Minister of Energy, Ben Maartins, and signed by chairperson of the National Energy Regulator of South Africa a month later. This begs the question how the decision to proceed with the procurement of a nuclear power station could have been made more than two years ago in a different economic climate, without any widespread consultation with the general public. The question also begs how the minister could have made this decision prior to all the necessary research being conducted? These questions together with a variety of other questions remain unanswered and therefore could warrant further investigation.
OUTA members will be kept up to date on the progress of the investigation.

tyreThe Waste Tyre Tax

In 2013, a Waste Tyre Tax was introduced by government, which is now being defined as a fee. The fee is a compulsory R2.30 for every kilogram of tyre either manufactured or imported into South Africa and is supposed to be a fee for payable for the collection and recycling of waste tyres. These costs are initially born by the importers and manufacturers, but are merely passed onto the consumers.

Why are we concerned about this?

OUTA is not against recycling or an integrated industry waste management plan. Information has revealed that the waste tyre plan is being managed by a company called the Recycling and Economic Development Initiative of South Africa (REDISA). The company succeeded with a bid to draft the integrated industry waste tyre management plan for the Department of Environmental Affairs.

After acceptance of the REDISA plan, REDISA was without any competitive bidding process appointed as the service provider to implement the plan. Soon after Kuzaga Taka Consulting, a company partially owned by the CEO of REDISA, was appointed without any competitive bidding process as the management company responsible for implementing the plan. Kuzaga Taka is contracted by REDISA at an annual fee of approximately R100 million a year. Soon after, without a bid, the South African National Civic Organisation (SANCO) was appointed as a subcontractor to serve as a go-between for REDISA and tyre pickers, coming at an alleged initial cost of almost R3 million. Soon after a host of individuals, allegedly with political ties,  received tyre recycling equipment free of charge ranging from R17 million to R30 million, totalling almost R100 million in order to start up their own tyre recycling businesses.  It is clear that something is not right and that this matter requires further research and investigation.

OUTA has met with the CEO of REDISA and his delegation and will be requesting a host of information to clarify what is going on.

eskomThe intended tariff hike proposed by Eskom

Eskom has applied to the National Energy Regulator of South Africa, for an electricity tariff increase of 16.6% for the 2016/2017 financial year. So why are we concerned about this? Firstly, even if Eskom was being run efficiently, electricity is on the brink of becoming completely unaffordable in South Africa. A business day report in September 2015 states that South Africa is the 10th most expensive country in terms of electricity prices globally in 2014, although, according to the world bank, is ranked 93rd in 2014 in terms of GDP per capita. It does not take much imagination to realise that something is very. The Energy Regulation Act states that the licensing conditions of a licensee, such as Eskom, should only allow for an efficient licensee to recoup the full cost of its licensing activities plus a reasonable margin. Eskom is not an efficient licensee. OUTA, assisted by energy specialist Ted Blom, are conducting a study, of which the initial research indicates gross inefficiencies within Eskom, ranging from questionable asset valuation calculations, to the already 500% cost overruns on Medupi, failing to conduct water requirement studies for Medupi, purchasing coal from politically connected companies and middlemen for exorbitant prices, allowing the BHP Billiton contract to continue and more than
OUTA energy spokesperson, Ted Blom, will be presenting OUTA’s objections to the proposed tariff increases on the 5th of February at Gallagher Estate, with the hope of convincing NERSA to refuse Eskoms application for the tariff increase.

SAASouth African Airways

South African Airways SAA has been duped in controversy as they have been bailed out many times in the last few years by Government. In recent developments SAA was thwarted by Treasury in an attempt to lease 5 new Airbuses , through an unknown middleman, that would have resulted in SAA defaulting on their agreement with airbus, costing SAA an estimated R603 million. OUTA have put SAA on their radar and are in the process of appointing consultants and investigators to have a closer look at SAA’s dealings. Members will  be kept up to date on the progress on the matter.

carbonCarbon Tax

Treasury has published a draft Carbon Tax bill inviting comment from numerous stakeholders (including OUTA) in December 2015, for the introduction of a  Carbon Tax Bill.

This is clearly a complex matter  and our concern is that this new tax may just be another irrational ineffective policy which will not have the desired impact on behaviour change and subsequent carbon reduction initiatives. Instead, we believe that the carbon tax may simply push up the cost of doing business and very little will happen in the area of Carbon  Management/reduction, whilst government’s coffers will be increased with a revenue stream which is not ring-fenced, with very little accountability as regards the spending of this tax.

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