An Investment Protocol for the Province of KwaZulu-

Natal

13 October 2010
In this presentation

• Background
• Objectives
• Key Investment Policies
• Regulatory Environment
• Main Processes Followed in starting a business
1. Company Registrations
2. EIA
3. Land Acquisition
4. Land Development
5. Infrastructure and Services
6. Investment Incentives
• Other important regulatory requirements
Definition

Investment Protocol entails:

• Compilation of investor-related information
• Aimed at providing prospective and investors with
relevant, guiding information wrt:
• Regulatory Environment
• Policy and procedures
• Provision of relevant services
Background

• Paradigm shift in factors driving investment decisions world wide

• Investors’ concerns about delays in commissioning of projects

• FDI not expected to increase spectacularly in 2011

• Need for real time information to assist investor decision

• Perpetual complaints about too involved government processes

KZN Investment Protocol

Objectives

• To provide clear guiding principles and information for investors

• To provide open and honest communication to investors

• Eliminate ambiguity when communicating with investors

• Promote ease of doing business in KZN

• Fast track decision making by investors

• Increase investment flows into KZN

Policy priorities governing business in
SA & KwaZulu-Natal

• RDP – address socio-economic division

• GEAR –increase trade openness & improve investment climate
• ASGI-SA - accelerate job creation alongside econ growth (abolish jobless
growth)
• B-BBEE – empower black majority & increase participation in economy
• NIPF & IPAP - set out government’s approach to South Africa’s
industrialisation path; help align both private and public sector efforts
• PGDS
• PSEDS
• IDPs
• Other important priorities:
• Rural development
• Promotion of Green and energy-efficient goods and services
• Downstream mineral beneficiation
• etc
Regulatory environment

Regulatory bodies

• FSB - supervises activities of financial institutions

• ICASA – television and radio broadcasting, telecommunications and the
assignment of radio frequencies
• SANAS – gives formal recognition of competence to Laboratories,
Certification Bodies, Inspection Bodies, Proficiency Testing Scheme
Providers and Good Laboratory Practice (GLP) test facilities
• SRP – investigate insider trading and regulate acquisitions and takeovers
• SABS – promotion and maintenance of standardization and quality
• NERSA – regulate the electricity, piped-gas and petroleum pipeline
industries
• NRCS - protects public rights to SHE (safety, health & environment
• Competition Commission
• Etc,
Regulatory environment

Main Regulations

• Company Registrations
• Environmental Impact
• Land Acquisition
• Property Development
• Provision of Infrastructure and services
• Incentives application
Registering a business

Procedure Estimated Responsibility

timeframe
Reserve a company name with the Registrar 3 days (electronic CIPRO
of Companies and pay fees lodgments
Lodge formation documentation 5-7 days CIPRO

Open a bank account 1-2 days A commercial bank

Register with SARS for income tax, VAT, 12 days SARS

and employee withholding tax (PAYE and
SITE).

Register with the Department of Labor for 4 days, simultaneous DoL

Unemployment Insurance and any other with Procedure 4
obligations
Environmental Impact Assessment

Basic Assessment

• Applicant will be informed as to whether project needs a

basic assessment or not

Scoping and Full EIA

• Applicant will be informed as to whether project needs

scoping and Full EIA.
EIA process (Basic Assessment)

EIA procedures Estimates timeframe Responsibility

1. Submission of an Application Applicant
 
2. Acknowledgement 14 days. KZNDAE
3. Accept/ reject/ request further Within 30 days KZNDAE
information.
4. Issue decision / Environmental Within 30 days. KZNDAE
authorisation
5. If KZNDAE cannot meet the 60 days KZNDAE
timeframe, then an automatic
extension
6. Issue decision / Environmental Within 30 days. KZNDAE
authorisation

Note: PAJA (Promotion of Administrative Justice Act) becomes applicable when decision is
not made within last 30 days. Applicant has grounds for legal recourse through this act.
EIA process (Scoping Report)

EIA procedures Estimates timeframe Responsibility

1. Submission of an Application Applicant
 
2. Acknowledgement 14 days. KZNDAE
3. Accept/ reject/ request further Within 30 days KZNDAE
information.
4. Issue decision / Environmental Within 30 days. KZNDAE
authorisation
5. If KZNDAE cannot meet the 60 days KZNDAE
timeframe, then an automatic
extension
6. Issue decision / Environmental Within 30 days. KZNDAE
authorisation

Note: PAJA (Promotion of Administrative Justice Act) becomes applicable when decision is
not made within last 30 days. Applicant has grounds for legal recourse through this act.
EIA process (Environmental Impact Report)

EIA procedures Estimates timeframe Responsibility

1. Submission of an Application Applicant
 
2. Acknowledgement 14 days. KZNDAE
3. Accept/ reject/ request further Within 60 days KZNDAE
information.
4. Issue decision / Environmental Within 45 days. KZNDAE
authorisation
5. If KZNDAE cannot meet the 60 days KZNDAE
timeframe, then an automatic
extension
6. Issue decision / Environmental Within 30 days. KZNDAE
authorisation

Note: PAJA (Promotion of Administrative Justice Act) becomes applicable when decision is
not made within last 30 days. Applicant has grounds for legal recourse through this act.
EIA process: Conclusion

• KZNDAE will solicit comments from other government departments

• Comments to be made and submitted within 40 days of receiving
documents from KZNDAE
• Decisions must be issued within two days of signature
• Public holidays and 15 Dec to 02 Jan are not counted as working
days
• Accredited EIA consultants are available on KZNDAE Database if
required by applicant
Land Acquisition

Privately-owned land State-owned land Ingonyama trust land

Land can be transferred between different Purchases or leases of State land are subject Applicant goes to local tribal authority
buyers/sellers at any time to tender. Two scenarios apply for the (Chief) with proposal
acquisition of State land.
The process is handled by a registered Application by an investor or developer for If Chief approves, approval letter is
broker or estate agent the use of a particular plot of State land; or issued to applicant

All transactions must be recorded in Deeds A response by an investor to an invitation by Approval letter is taken to Ingonyama
Office the government for bids to develop land. Trust Board (ITB)

In cases of registered mortgage bonds, The land is evaluated to determine whether Applicant fills the form providing details
cancelation fees charged on seller on a freehold sale or long-term lease would be of proposed project
termination of bond agreement more appropriate.
If ITB approves, a minimum of 2 years
lease will be granted
The property is advertised for six weeks for
competing developers to respond.
A valuation by an independent valuer is Applicant must apply for renewal
carried out. before 2 years expires
ITB can renew the lease up-to 40 - 45
The proposal is evaluated by the evaluation years depending on the project type
committee.

The Minister of Public Works signs the sale.

The process usually take 3 – 6 months to
complete
Rezoning (Planning Development Act)

Process Requirements Resp

1. The application is Application must include: Developer
handed in to the 1. The application form
municipality. 2. Written motivation
3. Proof of ownership in the form of a registered deed
of the land.
4. The written consent of the registered owner of that
land
5. Copies of the layout plan or general plan for sub-
division or consolidation of land or development
outside a scheme, and
6. Any other plans, diagrams, documents, information
or fees.
Rezoning (Planning Development Act)
2/5
Process Requirements Resp.
2. Receipts of Once the application is lodged, the municipality must: Municipality

application 1. Record the receipt in a register.

and the 2. Notify the applicant in writing within 28 days of any
request for document that may be outstanding.
further 3. Notify the applicant that the application is complete within
documents. 14 days after the receipt of the additional documents.
4. If no request is made by municipality within 28 days, the
application is considered to be complete.
5. Additional information must be provided within 90 days
from applicant, or decline in writing to provide the
documents.
6. Application process must be complete before the next
step, which is giving of public notice of a complete
application.
Rezoning (Planning Development Act)
3/5
Process Requirements Responsib
ilit
3. Giving Within 14 days of notifying the applicant that the application is Municipality
public complete, the municipality must give notice.
notice

4. Manner of The public notice must be given in the following format: Municipality
public 1. Display a notice on the land
notice 2. Serve notice to interested parties.
3. Publish a notice in a newspaper distributed within the area
concerned.
4. Hold public meetings if notice displays are not possible.
5. The municipality should obtain the opinion of a registered
planner before taking the decision not to publish a notice.
Rezoning (Planning Development Act)
4/5
Process Requirements Resp.
5. Petitions The municipality must reply to the designated person or the first Municipality
and delivery person on the list. This action will constitute as a notice to each
of groups person on the petition.

6. Amendments 1. A municipality may amend the application any time after the Municipality
to notice has been published but before approval.
application 2. Any person, who has commented must be notified of the
prior to amendments and given a further 14 days to comment.
approval 3. If the amendments are material, the municipality must re-
issue the notice allowing 30 days for comment.

7. Applicants’ 1 Copies of all comments made to the municipality must be given Applicant
right to to the applicant within 7 days of the closing date for comment.
reply 2 The applicant may reply in writing to the people who made
comment, within 21 days.
Rezoning (Planning Development Act)
5/5
Process Requirements Resp.
8. Site The municipality must: Municipality
inspection 1. Notify the applicant and agree on a time and date for the
inspection.
2. Secure the property after the site inspection if the owner or
occupier is not present.

9. Public 1. A municipality may decide whether or not to conduct a Municipality

hearing hearing within 14 days of the waiver or comment.
2. If they decide to hold a hearing, this must take place within 60
days.
3. All parties then have a right to attend the hearing, to state
their case, call witnesses, cross-examine any person and
have access to all documents.
Infrastructure & services

Process Requirements Estimated duration

Electricity connection 1. An application to be submitted to 1. estimated quote of
the nearest Municipal offices at installation costs within
least seven days prior to the 14 days of the initial
requested connection date. application
2. Proof of property holding: title deed 2. Installation up to 24
or lease agreement months for large
3. A cash deposit or bank guarantee projects
may also be required to cover
costs in the event of non-payment.

Water connection Same as above 1. one day to two weeks

for serviced sites
2. between one 1 and 12
months for sites that
are not serviced
Infrastructure & services

Process Requirements Estimated duration

Telkom line connection An application to be submitted to 1. one week for
the nearest Telkom sales. telephone line
connection if lines
are in place
2. up to four 4 months
if equipment
upgrade is required
Incentives application

Most incentives are administered by thedti and application thereof take different
timeframes to conclude. E.g.

Incentive Application duration Responsibility

APDP 2 months thedti
EIP 14 weeks thedti
FIG 3.5 months thedti
BPOII 8 weeks thedti
Other important regulations

• Labour Laws
1. LRA
2. BCEA
3. SDA & SDLA
• Intellectual Property Laws
• Tax
• Exchange Controls
• Importing and Exporting
• Sector specific regulations
• Municipal By-laws
Conclusion

• KZNDAE has reported a significant reduction in number of

applicants complaining about EIA turnaround time

• Change of the EIA regulations is cited as one of the reasons. E.g.

Small projects like installation of pipes within certain ranges, no
longer require EIA.

• Some Municipalities attribute complaints by applicants to poor

advise given by officials during initial consultation by applicant.

• Improvement of efficiencies is required particularly in wrt

regulations such as rezoning and connection of utilities.
Thank You