SMME Ombud Bill nearly ready for Cabinet?

A small enterprise ombud service ‘will be established in the 2020/21 financial year as soon as the amended legislation is promulgated and proclaimed’, according to Small Business Development Minister Khumbudzo Ntshavheni. CompliNEWS contributor Pam Saxby reports that, responding to questions posed by DA Western Cape representative in the NCOP, Johan Londt, the Minister said work on the necessary draft amendment Bill has been completed and a socio-economic impact assessment process is already under way. The Minister’s July budget vote speech included a reference to a Small, Medium & Micro Enterprise (SMME) Ombudsman Services Bill, which she said would be tabled in Parliament before next March. However, given that the proposed new piece of legislation will need to be approved by Cabinet for public comment, revised to accommodate any relevant recommendations and resubmitted to Cabinet before being introduced in the National Assembly, this now seems unlikely. Another constituency period has been scheduled for 9 December, followed by Parliament’s annual festive season recess.

According to Ntshavheni, the ombudsman’s main function will be to investigate and resolve disputes between small businesses and ‘other parties’ – including private companies, state-owned enterprises, government departments and municipalities. Such disputes may be over alleged ‘unfairness in relation to a contractual arrangement or other legal relationship between the complainant and any other party to the complaint’; the ‘abuse or unjustifiable exercise of power or unfair or other improper conduct’; ‘undue delay’ in fulfilling the terms of a contractual arrangement or other legal relationship between the complainant and any other party to the complaint; the ‘non or late payment of a small, medium or micro enterprise’; and any ‘act or omission which results in unlawful or improper prejudice to a small enterprise’.

In a separate reply to other questions from Londt about the SMME sector, the Minister provided insight into several steps to be taken within the next three years with the aim of reducing ‘unnecessary red tape’ and ‘time-wasting by government departments that should support SMMEs’. They include the ‘review and consolidation’ of all legislation affecting the sector and a process of standardising municipal bylaws, focusing on informal traders. According to Ntshavheni, last Thursday she was expecting to launch a business plan template aimed at simplifying the process of applying for development finance, while work on a national SMME information and support database is ‘at an advanced stage’. The sector will also benefit from access to multiple services available at the Department of Trade & Industry’s new ‘biz portals’.