After careful consideration, the Department of Environmental Affairs has decided to request the board to wind up the operations of Buyisa-e-Bag with a view to the absorption of the functions into the department. This is seen as the most practical option and is likely to pose the least risk to the accounting authority of the department.
This decision follows a review process undertaken by the department that presented three options as possible ways forward for this company, that is, continue with the current structure, wind-up the company and establish it as a public entity; or wind up the Company and absorb the function into the department.
Buyisa-e-Bag was created as a result of the Memorandum of Agreement (MoA) signed between industry, labour and government during 2002 and was established in 2004/05. Its intended objectives were, among others, the expansion of waste collection networks, the establishment of rural waste collection small, meduim and micro enterprises (SMMEs), creating additional capacity in non governmental organisations (NGOs), job creation, improving skills and re-skilling workers in the plastics field.
The Department of Environmental Affairs, as sole funder of the company became concerned about, amongst others, the governance, expenditure and performance of the Company - concerns also shared amongst others by the National Treasury.
Consequently, the department undertook a review of the company to determine whether the objectives that were set for the company were being met and if not, what contributed to this. The purpose of the review and the department’s position on the way forward for the company is informed by the department's desire to ensure cost effectiveness, transparency and accountability, prevent duplication of work already 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.
The department then concluded that the company has failed to meet the objectives as set out in the founding MoA between government, labour and industry. At the heart of the problem appears to be the"founding" Memorandum of Agreement that required the setting up of a Section 21 Company (that must comply with the Companies Act), but which is solely funded with public funds (which means that the company must also comply with the Public Finance Management Act (PFMA).The Companies Act and the PFMA have different requirements in terms of governance and consequently, the department considered this matter to be one that required urgent resolution.
The department has proposed to the board that such winding up is given effect to through a voluntary process facilitated by a resolution of the Board. We have been informally informed that such voluntary winding up process is in principle supported.
For media queries contact:
Albi Modise
Cell: 083 490 2871
