Export Credit and Foreign Investments Insurance Amendment Bill

Adv. Z.L. Madasa MP- ACDP

Thursday, 15 August 2002

In Parliament today African Christian Democratic Party MP Adv. Z.L. Madasa gave the following speech during the Second Reading Debate on the Export Credit and Foreign Investments Insurance Amendment Bill:


The Bill is really a technical amendment introduced to the house perfunctorily.

It seeks to clear perceived or real ambiguities which may arise from the reading of section 2 of the existing Act.

It is alleged that section 2 as it stands may be interpreted to read that the minister of Department of Trade and Industry has to approve every contract of policy insurance despite the delegation of powers to the ECIC. This amendment seeks to bring clarity as to a proper interpretation of the said section. Other amendments are consequential hereto.

Although there is nothing contentious in this amendment I need to make the following policy statements:

We understand the need for certainty of the law to bolster investor confidence. But this should not absolve the department from being professional and vigilant.

Contracts can and are breached especially when the private developer is well covered, as is the case in these kinds of schemes.

We must learn from the past. Huge amounts were lost in the Cahora Bassa scheme even though technically it was a good project. Similarly Denel lost money in the past when its exports to Iraq were followed by the gulf war.

In schemes like these we must ensure co-insurance in such a way that other national insurances and private insurances are involved in order to spread the risk.

We need a clear policy approved by the cabinet that will entail a country-by-country limit on the amount covered depending on the prevailing investment environment in each case at the time.

Contingent liability can and does grow and when that is the case the matter must be reported to the cabinet.

When huge amounts are involved there must be policy in place in terms of which the minister’s approval is obtained. The minister of finance and the central bank must always be represented when huge amounts are involved.

As there is nothing contentious in the content of the proposed amendment per se, accordingly the ACDP will support the Bill.



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For further comment please call Adv Z.L. Madasa MP at 083 3024938 or ACDP Media Liaison Liza Bloemetje at 082 4781037