1. BUYISA-e-BAG 1

2. Presentation Outline Background Review – Purpose – Findings – Conclusion Options considered Way forward 2

3. Background MoA between Government, Labour and Business – offset negative social and economic impact of plastic bag levy Purpose of levy to promote the reuse of carrier bags and to enforce a minimum thickness of bag which would promote the recycling of the bags Objectives of Buyisa-e-Bag: – support the expansion of collector networks; – establish rural collection SMMEs and create additional capacity within NGOs; – through the expansion of the collector section and the building of SMMEs the Section 21 Company was to create job opportunities and decent work, it was estimated that between 1900 and 3800 new jobs could be created; and – the Section 21 Company was also to work with Sector Education and Training Authorities to address and improve skills and re-skill workers in the plastics field 3

4. Review - Purpose DEA, as sole funder, is concerned about, amongst other things, the governance, expenditure and performance. Review to determine whether the objectives as set out in the MoA have been reached and, if not, what contributed to this. The purpose of the review and the recommended way forward is informed by the Department's desire to: – achieve the original objectives; – ensure value for money/ cost effectiveness; – ensure transparency and accountability; – prevent duplication of work already being done by the Department; – and minimise job losses and disruptions in the functions of the Company during the transition to a new or revised structure 4

5. Review - Findings Governance arrangements – Set up as Section 21 Company – should comply with Companies Act – MoU between DEA and Buyisa and Articles of Association – comply with PFMA – Buyisa operates on combination of rules – not fully complying with Companies Act or PFMA Strategic plan – Buyisa does not have and never did have a strategic plan – Activities not in line with stated objectives Expenditure/value for money – Not managed to spend the allocated funds from its inception – High administrative costs 5

6. Review - Findings Activities – Have not met targets of 2010/11 business plan Effectiveness – Difficult to measure effectiveness Duplication of functions – Similar functions performed in Department Public and media perception – Negative perception in media 6

7. Review - Findings Conclusion – Failed to meet objectives as per “founding” MoU – Core problem: Section 21 Company (that must comply with Companies Act) but solely funded with public funds (which means that PFMA must apply) 2 Acts have different requirements in terms of governance Current structure allows for very limited oversight by Department 7

8. 3 options considered for way forward Continue with the current structure, that is a Section 21 Company in terms of the Companies Act, but revise the Articles of Association to resolve the governance and management problems Confusion with regard to the governing legislation and reporting requirements would continue. Structure required to comply with both the PFMA and Companies Act are significant and expensive Wind-up the Company and establish a Public Entity – Government support rationalisation of entities – Similar functions are already performed within the Department Wind-up the Company and absorb the function and the staff into the Department – Preferred option 8

9. Preferred option Key issues: ensuring minimal job losses, retain the original objectives of the MoA Similar functions is already performed in the Department, the existing policies and systems be will used to achieve the stated objectives Regional presence Cost of administration much lower (approximately 12%) - ensure value for money. Legal certainty with regard to governance, the PFMA will apply and all the department's financial policies will apply which will significantly reduce the risks to the Department. 9

10. Way forward Board signed special resolution to voluntarily wind-up (last signature 14 July) Department appointed KPMG to facilitate the winding-up Buyisa will remain a corporate body and retain all its powers as such, but shall from the commencement of the winding-up cease to carry on its business except in so far as may be required for the beneficial winding-up thereof Buyisa allowed to continue operating under strict control and management of the Board during the winding-up process 3 to 6 months after which the functions and staff will be fully absorbed into the Department No jobs will be lost as a result of the absorption of the functions of Buyisa into the Department and employees conditions of employment will be honoured 10

11. Thank you 11