“Where are the Socio Economic Impact Assessments (SEIAs) promised by the Cabinet in October 2015? This is the single most important policy today. If we get the SEIA process right, everything will be efficient and work towards the overall good of the country,” said Free Market Foundation (FMF) executive director Leon Louw at an FMF media briefing.
“We are told that SEIAs are now mandatory for all new legislation and that between June 2015 and May 2016 there have been 117 SEIAs undertaken, so where are they? None have been released to the public and the system is not transparent which raises suspicion.”
In 2007, the Cabinet decided on the need for a consistent assessment of the socio-economic impact of policy initiatives, legislation and regulations following a study commissioned by the Presidency and the National Treasury in response to concerns about the failure to understand the full costs of regulations and, especially, the impact on the economy.
From 1 October 2015, all draft policies, Bills or regulations must include an impact assessment that has been signed off by the SEIAS Unit. Departments must include information generated by the SEIAS in the recommendations and a summary of the main findings of the final impact assessment as well as annexing a full report. Policies and regulations that are internally signed by Ministers should also be subject to SEIAS. Guidelines for SEIAs have been issued.
SEIAs deal with the costs versus the benefits of proposed legislation. SEIAs start with the premise of ‘at what cost’ will the benefits of proposals be. Louw said that by using SEIAs, policymakers have a real opportunity to honestly examine the negatives that the positives will achieve and the costs of implementation and compliance. “Be honest, identify and satisfy yourself as a policymaker that you understand all the costs but also that the benefits outweigh these. There is no free lunch. All government policy means an allocation of finite government resources and a transfer of wealth, which usually impacts the poor in society. Doing more of one activity must mean doing less of another,” he said.
Louw referred to the proposed Twin Peaks legislation as a prime example of where no identification of the problem had taken place – the “mischief” factor – and no quantification of the costs versus benefits. Another example was the Mineral Rights Nationalisation Bill, which had dramatic negative effects on the mining industry. He said that Financial Advisory and Intermediary Services (FAIS) SEIA is the only known example. However, nobody in Treasury has since checked if any of the benefits ever materialised. In fact, the opposite happened with thousands of black brokers being driven from the industry and far less advice on offer to consumers. FAIS was used as a propaganda exercise to get the bill through Parliament according to Louw.
He said that being new to this concept, South Africa is perfectly positioned to implement best practice taken from examples from other countries. Rather than follow their lead, South Africa could stand on their shoulders and be the best by looking at the shortcomings and implementing a system to overcome these. One example South Africa should seriously consider is the UK where for every new Bill introduced, an existing one of similar stature must be repealed.
Louw said the proviso in the South African guidelines that not everything can be quantified was a big mistake and should be removed. All proposed benefits must be measured and quantified. Also, the SEIA secretariat, which oversees the SEIA process, must be composed of independent experts rather than numerous representatives drawn from all government departments to ensure impartiality and efficiency. Having done extensive research on international SEIA practice and the intentions contained in South Africa’s guidelines, Louw said that South Africa was off to a good start and must take the opportunity to implement a process that works.
South African SEIA History
- 1998: Good Law Project research starts under acting executive director Leon Louw
- ±2000: DTI briefs Leon Louw
- ±2002: Department of Finance takes over (FIAS)
- ±2003: Presidency (Mbeki) takes over
- 2007: Presidency approves RIAs (‘implemented’ 2012)
- 2010: Labour law RIAs (dismissed!)
- 2015: Mandatory SEIAs announced
- 2016: Secretariat says all new measure have SEIAs
- June 2015-Mar 2016: 117 SEIAs
- SEIAs not published (as required)