South African Industry Research Articles

Sustainability of Local Labour Market in South Africa: The Implications of Imports Competition from China

Using South African manufacturing and non-manufacturing industry employment, imports from China, growth in manufacturing and non-manufacturing industry, and workers’ earning data, we examined the impact of imports from China, growth in manufacturing and non-manufacturing industry on manufacturing and non-manufacturing industry employment and workers’ earnings. This study employed a Bayer and Hanck cointegration test to examine the cointegration among the variables, which found the existence of cointegration. In addition, the ARDL approach was employed to ascertain the long-run effect of the import from China, growth in manufacturing and non-manufacturing industry on the manufacturing and non-manufacturing industry employment and workers’ earning, while “Fully Modified Ordinary Least Square (FMOLS)”, “Dynamic Ordinary Least Square (DOLS)”, and “Canonical Cointegrated Regression (CRR)” estimators were employed for robustness. We found a negative long-run effect of imports from China on manufacturing sectors’ employment and workers’ earnings, while a positive of its effect was found on service industry employment. Moreover, growth in the manufacturing industry was found to have a positive long-run effect on manufacturing industry employment and workers’ earnings, while it has a negative long-run effect on service industry employment. As for the growth in the service industry, it was demonstrated to have a negative and positive long-run effect on manufacturing industry employment and non-manufacturing industry employment.

The implications of the African Continental Free Trade Area on South African agricultural trade: An application of the partial equilibrium mode

Background: The African Continental Free Trade Area is currently a negotiated agreement that comprises 54 African countries and aims at eliminating trade barriers between its member states. Advocates of the Free Trade Area point to the numerous benefits of the agreement, though less has been said about the potential implications on economic strategic sectors such as the agricultural sector.Aim: The study explores the potential economic impact of a full tariff liberalisation as proposed under the African continental Free Trade Area on South African agricultural trade.Setting: A 100% tariff cut on agricultural commodities was simulated among all 54 members of the African Continental Free Trade Area.Methods: The study adopts the SMART partial equilibrium model to simulate the potential impact of a full tariff liberalisation as proposed under the African Continental Free Trade Area on South African agricultural trade.Results: The simulation revealed that South Africa will gain a total trade value of approximately US$199 million, and the total trade diversion from third parties will stand at US$42 million. South African agricultural commodities with the greatest export potential to the African market include sugar cane, maize, citrus fruit, cigarettes and sauces. Industries that are vulnerable to the free trade area include dairy, poultry, and vegetables. The full tariff liberalisation is projected to decrease South African’s export revenue.Conclusion: The study recommends that South African infant industries that are vulnerable to the agreement be listed in an exclusive list and that government should enhance the competitiveness of the affected industries.

A proposed risk framework as a tool for sustainability for the South African wine industry

Aim: There is an existing gap in the literature that addresses the importance of risk management as a tool for sustainability in the winemaker’s activities and operations. The purpose of this article is to propose a risk management framework for the South African wine industry that can be used as a tool for sustainability.Setting: The study comprised 10 participants at five wine-producing estates located in the five different wine-growing areas within the Stellenbosch region.Method: The study is exploratory in nature, adopting a case study approach. Interviews with wine producers in the Stellenbosch region of the Western Cape province of South Africa were conducted in order to identify the various risks they face.Result: A thematic analysis was used to analyse the data. The four steps of risk management were used as a reference point and to underpin the proposed risk management framework. The study was done using the Supply Chain Operations Reference model, which is divided into six process categories, namely plan, source, make, deliver, return and enable.Conclusion: The article makes a twofold contribution. Firstly, wine producers might use the proposed framework to identify and mitigate their risks and thus as a tool for sustainability. Secondly, the proposed framework is expected to contribute to the existing body of knowledge on risk management and sustainability.

TRAM: A Graphical User Interface for Risk Analysis in the Underground Coal Mines

Over the last few decades, the Australian, New Zealand, Canada, UK, USA and South African mining industries have applied risk management techniques to regulate the hazards in mines. In the Indian mining industry, it was mandated only after the revision of the Coal Mines Regulations in 2017. An effective risk assessment is required to develop a practical risk management plan. TRAM (Tool for Risk Assessment in Mines) is a Graphical User Interface (GUI) that acts as a risk analysis and ranking tool for underground coal mines. This study aims to describe the structure and application of TRAM developed. TRAM is based on the proposed methodology which incorporates Fuzzy logic, the Analytic Hierarchy Process (AHP) and VIKOR, which stands for Multi-Criteria Optimization and Compromise Solution. In the proposed methodology, three risk parameters, consequence (C), exposure (E) and probability (P) were used to assess the risk of identified hazards, hazard groups and overall mine. A case study of risk analysis of an underground coal mine is used to illustrate the application of the TRAM. The developed TRAM has a user-friendly interface, allowing even inexperienced experts to perform effective risk analysis for mines in a short period of time.

Occupational Health and Safety Statistics as an Indicator of Worker Physical Health in South African Industry.

Operations in general industry, including manufacturing, expose employees to a myriad of occupational health hazards. To prevent exposure, occupational health and safety regulations were enacted, with both employers and workers instituting various risk reduction measures. The analysis of available occupational disease and injury statistics (indicators of worker physical health) can be used to infer the effectiveness of risk reduction measures and regulations in preventing exposure. Thus, using the READ approach, analyses of occupational disease and injury statistics from South African industry, derived from annual reports of the Compensation Fund, were conducted. The publicly available database of occupational disease and injury statistics from the South African general industry is unstructured, and the data are inconsistently reported. This data scarcity, symptomatic of an absence of a functional occupational disease surveillance system, complicates judgement making regarding the effectiveness of implemented risk reduction measures, enacted occupational health and safety regulations and the status of worker physical health from exposure to workplace hazards. The statistics, where available, indicate that workers continue to be exposed to occupational health impacts within general industry, notwithstanding risk reduction measures and enacted regulations. In particular, worker physical health continues to be impacted by occupational injuries and noise-induced hearing loss. This is suggestive of shortcomings and inefficiencies in industry-implemented preventive measures and the regulatory state. A robust national occupational disease surveillance system is a regulatory tool that should detect and direct policy responses to identified occupational health hazards.

Treating Customers Fairly (TCF) in the South African Banking Industry: Laying the Groundwork for Twin Peaks

This article examines South Africa's ‘Treating Customers Fairly’ (TCF) regime, deployed as aspirational from 2011, and its development into a legally binding regime with the imminent enactment of the Conduct of Financial Institutions Bill. TCF is principles-based and outcomes-determined, designed to protect financial consumers and ensure they are treated fairly and enjoy consistently good outcomes from financial service providers. The article examines enforcement and investigates current gaps in success by reference to Ombud data. The findings will be of relevance to other African countries contemplating the adoption of a Twin Peaks financial system regulatory regime of which TCF is a core component.

The South African software industry lacking project critical success factors: a project team perspective

The South African software industry lacking project critical success factors: a project team perspective

Technical capabilities of Business Intelligence Systems in South African medium to large organisations

Companies are putting in place systems that might assist in attaining their business goals and vision to improve the running of their business processes. Companies are looking at Business Intelligence (BI) as a means to attain a competitive edge over competitors, predict future trends, improve strategic decision making, facilitate quick and reliable decision making, or make the day-to-day running of business easier. The study looks at the perspective of middle to top management on the context of BI, with main focus on the technical capabilities of BI within medium to large companies in South Africa. To obtain factors relevant to the South African business context, an online survey was conducted with various sectors of South African industry. The study is part of research conducted collaboratively by the University of the Western Cape and Neu-Ulm University of Applied Sciences in Germany. It focuses on exploring usage of Business Intelligence Systems (BIS) together with Corporate Performance. Online surveys were conducted that targeted medium to large companies in Germany and South Africa by questioning middle to top management on issues surrounding BIS and Corporate Performance. On this basis online survey approach was taken to ensure required number of participants would be covered and approached. Therefore, the research adopted stratified sample method for the online survey. Stratified sampling enabled the expansion of the research by gathering and collaborating participants responses on the research question and eliminate the possibilities of unreliable sample from large population.

Exploring hindrances for professionalising South African Private Security Industry: Experiences and recommendations

The professionalisation of the private security industry (PSI) can be beneficial and costly and these need to be measured against undertaking any professionalisation initiatives, since they can provide some degree of quality control to some businesses working in the field but can also impose hindrances and negative experiences to those wishing to enter the industry. The purpose of this study was to explore the following question: What are the experiences on hindrances to professionalisation of the PSI by Private Security Industry Regulatory Authority [PSiRA] in South Africa? Following a qualitative research approach, this study employed the exploratory research design. The judgemental sampling technique was adopted to select a sample of 40 participants from Gauteng (GP), KwaZulu-Natal (KZN) and Western Cape (WC) provinces. The findings highlighted that the majority of the participants agreed that the professionalisation of the PSI through PSiRA is facing many positive and negative experiences and hindrances, particularly in the private security training space where corruption and criminality are rife. This study recommends that, to overcome the noted hindrances, PSiRA needs to update the training curriculum, empower and train more inspectors and build relationships with industry stakeholders.

Development and preliminary validation of the work-unit performance questionnaire

Background: Serious shortcomings are identified in the Performance Index (PI), developed by Spangenberg and Theron (2004). Attempts are made to correct these shortcomings.Aim: The primary objective of this research study was to develop and preliminary validate a generic Work-Unit Performance Questionnaire, based on the Performance Index of Spangenberg and Theron (2004), correcting shortcomings identified in that particular PI.Setting: The study used convenience sampling that consisted of 202 respondents from a variety of South African industries. The article draws on findings in the thesis of Seland (2019).Methods: The development and preliminary validation of the Work-Unit Performance Questionnaire (WUPQ) was required. The WUPQ consists of dual subscales, the Work-Unit Competency Questionnaire (WUCQ), which consists of seven latent behavioural competency variables, and the Work-Unit Outcome Questionnaire (WUOQ), which consists of six latent outcome variables.Results: Both measurement models (WUCP WUOQ) showed close fit; however, two factor loadings in the WUCQ measurement model had to be constrained. Reasonable structural model fit was found in the sample. Support was found for 11 of the original 21 path-specific substantive hypotheses and for an additional hypothesis.Conclusion: The proposed model can be used by managers, with caution due to the intentional exclusion of competency potential and situational variables, to diagnose poor work-unit performance. Furthermore, it is encouraged that this research be the starting point for further analyses of work-unit performance and advance validation of the instrument.

Can Public Procurement Requirements for Railway Transport Promote Economic and Social Sustainability in South Africa?

When considering sustainability from a socioeconomic and environmental point, the South African public transport industry was not an integral part of such planning until the last decade. Various well-intended and well-defined public procurement and environmental regulatory policies and instruments were put in place over the years, however, they appear to be failing in achieving the goals of local job creation and alleviation of unemployment. This exploratory literature review study of various public documents, regulatory instruments, and review reports aims to evaluate current knowledge pertaining to the current level of sustainable transport from a life-cycle approach, in support of overall sustainable goals in South Africa. The research set out to assess the status of public procurement in the revitalising of public rail freight transport towards identifying areas of excellence that could be used to address under-performance in other areas. The documentary analysis found various areas where the public procurement policies within South Africa, which aims to promote local participation, are facing difficulties due to lack of access to modern technology as well as inadequate skills levels to be able to partake in the ventures. In exploring South African challenges and current solutions, the article recommends a holistic and integrated approach to provide for a sustained manufacturing and service supply stream within the local railway transport environment.

Sharpening the Axe: Identifying and Closing Gaps Within the Training Space of the South African Private Security Industry

The ever-present threat of crime in South Africa continues to drive the rise and demand for Private Security Industry (PSI) services amongst various governmental institutions, businesses and citizens to ensure their safety. This rise for the Private Security Services (PSS) persistently presents new challenges to the Private Security Industry Regulatory Authority (PSiRA) such as poor security training standards and deployment of untrained security officers attached to the Private Security Companies (PSCs), which negatively impacts the professionalism of the security industry. This study was guided by this objective: Identifying and closing the gaps within South African training space of PSI. This qualitative study was guided by the exploratory research design. The judgemental sampling technique was adopted to sample 40 participants confined to Gauteng (GP), Kwa-Zulu Natal (KZN) and Western Cape (WC) Provinces. The selected relevant stakeholders were attached to the South African Police Service (SAPS), Department of Labour (DoLl), Department of Home Affairs (DoH), National Prosecuting Authority (NPA) and the legal fraternity) and the PSI Directors and security officers to form part of the Focus Group Discussions (FGDs) and hybrid semi-structured interviews. The findings highlighted that the majority of the participants agreed that the private security industry training space is affected by security service providers letting PSiRA down by not training at, but rather engaging in, criminal activity through selling and people buying PSiRA security certificates. Some of the challenges mentioned include; poor training standards, non-compliance to legislated training standards, unqualified security training facilitators and outdated security Grades, misuse of security equipment leading to serious injuries and death, corruption in the industry, some of it being perpetrated by PSiRA inspectors, the very people who are supposed to keep the industry in check. This study recommends that, in order to overcome the challenges in the security training space, PSiRA needs to do away with the outdated security Grades by developing a new policy framework which will enable the creation of a new security-training curriculum and revise the training methods to suit the ever-changing security industry.

Covid-19 and the South African wine industry

ABSTRACT South Africa has faced multiple waves of COVID-19 infections since March 2020 with various levels of economic restrictions imposed to control the pandemic’s spread. Such actions included intermittent bans on alcoholic beverage sales, which have had a substantial impact on the wine sector. This purpose of this paper is to quantify this impact, using a partial equilibrium simulation model to separate the direct impact of sales restrictions from the indirect impact of collapsed GDP growth and consequently also consumer spending. In 2020 alone, it points to a reduction in domestic sales and in exports as a result of the pandemic and the efforts to control its spread. The subsequent stock build up induces a prolonged period of weaker prices, and combined with additional actions imposed up to the end of July 2021, cost actors in the industry R3.6 billion in primary gross production value from 2020 to 2027, even without accounting for further value addition between bulk sale and retail value.

THE FIRE, THE BURGLARY AND THE PRAETORIAN EDICT DE NAUTIS, CAUPONIBUS ET STABULARIIS

The travel and tourism industry is the world’s largest industry. This industry is also seen as one of the priority growth areas for the South African economy. In South Africa travel and tourism activity is expected to grow at a rate of 4.8% per annum in real terms between 2007 and 2016. This will mean an increase in travel and tourism economic activity in South Africa from R198.1 billion in 2006 to R511.5 billion in 2016. Based on these figures it is estimated that the travel and tourism industry will contribute 9.3% of the South African Gross Domestic Product (“GDP”) by 2016. One of the main benefits of the travel and tourism industry is its potential for attracting foreign currency. Already, tourism is the fourth largest foreign exchange earner in South Africa. Furthermore, the travel and tourism industry has major potential for generating employment. It is expected that by 2016 the travel and tourism industry will provide 1.5 million jobs (or one in every 11.6) in South Africa. South Africa’s travel and tourism industry has experienced significant growth in the last decade. This resulted in a substantial number of guest houses and bed-and-breakfast establishments opening their doors in every city, town and in between. This growth is evidenced, for example, in that South Africa is well on its way to reaching its target of attracting 10 million foreign visitors per year with a reported 7.6% increase in foreign visitors in the first five months of 2008 to a total of 3 983 061. With the rise in travel and tourism activity, it can be safely forecasted that there will be a rise in litigation revolving around the respective rights of tourists and tourist service providers. In a nascent travel and tourism law jurisprudence, each case decided in this regard ought to be carefully considered by both legal practitioners and the industry. A matter came before the then Cape High Court during 2002, based on an action whose (continued) existence in South African law had been questioned more than eighty years earlier. The case was Gabriel v Enchanted Bed and Breakfast (2002 2 SA 597 CPD (hereinafter the “Gabriel case”)). Just to confirm that this was not to be an isolated reliance upon an almost obsolete remedy, the Gabriel case was followed in 2005 by Roy v Basson NO (2007 5 SA 84 CPD (hereinafter the “Roy case”)). The legal remedy in question is the Praetorian edict de nautis, cauponibus et stabulariis. (Considering the fairly unique nature of the legal ground under consideration in these two cases it is somewhat surprising to note that the court in the Roy case did not refer to the Gabriel case at all). Both these cases concern the liability of the proprietor of an inn in terms of the Praetorian edict de nautis, cauponibus et stabulariis and are therefore of particular relevance for the South African travel and tourism industry. It is therefore opportune to consider the Praetor’s edict and its application anew.

Gender and Police Leadership: An Analysis of Metropolitan Police Departments in South Africa

Despite a number of initiatives aimed at improving the representation and progressive of women in the law enforcement. Studies continue to document the persistence of gender inequality within law enforcement agencies all over the world and South Africa is not an exception. This article bring to light gender inequalities in the law enforcement sector where women in leadership ranks remains low. Historically, the police career was male-dominated and females were not allowed to work in the police. Therefore, equal gender representation in the workplace should by now be at an advanced developmental stage in South Africa since the abolition of discrimination rules. The Commission on Employment Equity of South Africa reported that women comprised 44.8% of the economically active population, yet males were still in charge of senior management positions in South African industries including the law enforcement environment. The data was collected from female officers from Metropolitan Police departments in Gauteng province. The findings suggest that culture, stereotypes, economic and socio-political dynamics, and physical fitness were perceived as barriers that hindered the representation of women into senior leadership positions.

HUNG OUT TO DRY? ATTORNEY-CLIENT CONFIDENTIALITY AND THE REPORTING DUTIES IMPOSED BY THE FINANCIAL INTELLIGENCE CENTRE ACT 38 OF 2001

According to the South African Law Reform Commission, money laundering is the manipulation of illegally acquired wealth in order to obscure its true source or nature. This is achieved by performing a series of transactions with the proceeds of criminal activities that, if successful, will leave the illegally derived proceeds appearing as a product of legitimate transactions or investments. Professional money laundering assists and strengthens organised crime and may contribute to the undermining of the civil society and the financial system of a country. Attorneys as professionals are no doubt in a precarious position. On the one hand there is the duty to keep in confidence private information pertaining to clients’ affairs which is no doubt essential to the attorney-client relationship and on the other hand there is the duty to the community to uphold the ethics of the profession. Attorneys may find that they are caught between these seemingly conflicting duties and the question is which duty is more important. This article weighs the newly-imposed duties on the legal profession pertaining to money laundering against the equally important principle of attorney-client privilege and asks whether it is possible to reconcile anti-money laundering obligations with legal professional privilege. The article considers the latter duty in light of the ethics of the legal profession in South Africa and the foundation of legal professional conduct. In addition, the position in the United Kingdom and in Canada is also considered. Against this background it is argued that there is no need to regulate the South African professional legal industry any further. Until FICA’s reporting provisions are formally challenged in the Constitutional Court, attorneys will continue to remain uncertain as totheir position, notwithstanding the fact that guidance notes have been issued to aid attorneys in this regard. In order to comply with FICA and simultaneously preserve the attorney-client relationship, attorneys need to educate clients on the provisions of FICA. Furthermore, legal practitioners should have a sound legal knowledge of FICA in order help the State combat organised crime and laundering activities. Finally, it is advisable to keep up to date with the latest guidelines which regarding the independence of the profession; possible infringements of the fundamental right to privacy and potential threats to the confidential attorney-client relationship. It is the awareness of this precarious balance that will ensure compliance with the FICA without causing the attorneys’ profession to lose its credibility.

The relationship between resilience and organisational control systems in the South African aviation industry

Background: Organisational control systems, such as quality assurance and corporate governance, configure an organisation’s internal environment to manage the velocity of change and pro-actively stabilise disturbances. Resilience in a socio-technical system is a multi-disciplinary approach to instil a system’s transformability and adaptive capacity to achieve desirable outcomes and continuous improvement. This study confirms theoretical postulations that detachment between the disciplines of quality assurance and corporate governance reduces resilience in a socio-technical system. Coherence between these disciplines in a complex socio-technical system is achieved through four components of organisational resilience: strategic management and company culture, monitoring and awareness, exposure management and responsive adaptation.Objectives: This study aimed to explore stakeholders’ perceptions of the relationship between the components of organisational resilience and organisational control systems in the South African aviation industry.Method: A cross-sectional survey was used to collect data from 203 stakeholders in the South African aviation industry. The data set was subjected to descriptive and inferential statistical analyses.Results: A strong positive linear relationship exists between organisational control systems and organisational resilience and its four components: Strategic management and company culture, Monitoring and awareness, Exposure management and Responsive adaptation.Conclusion: This study revealed that a harmonised application of organisational control systems, such as quality assurance and corporate governance, stimulates organisational resilience in a socio-technical system through the autonomous advancement of four components of organisational resilience. Furthermore, the robustness of organisational control systems activates an organisation’s capacity to adapt sustainably, whilst maintaining stakeholder value within complex socio-technical systems, such as the aviation industry.

Supply chain design dimensions for supply chain resilience in the South African fast-moving consumer goods retail industry

ABSTRACT This paper intends to empirically establish the supply chain design dimensions that influence the ability of retailers in South Africa’s fast-moving consumer goods (FMCG) industry to perform effectively with resilience. It further examines the extent of supply chain design dimensions impacting the variance on resilience in this industry. The study surveyed managers and supervisors of major South African supermarkets within the FMCG industry and employed univariate and multivariate methods to analyze the data collected. The paper established that technology advancement, economic influence, environmental changes, desired supply chain outcomes, and transport networks are the supply chain design dimensions with the most impact on the capability of the retail industry to perform efficiently and effectively with resilience. Furthermore, the paper revealed that transport networks, as an integral part of retail industry, impact the most on the variance of resilience for product availability. The findings imply that, despite the susceptibility to external and internal disruptions, performance and operations with resilience resonate with proper investments in technology, the available capacity under turbulent economic behavior, and a transport network for better customer experience. The paper further acknowledges the disruptive environmental changes, desired supply chain outcomes, and the need for a supply chain design for resilience in the retail industry.

FACTORS THAT INFLUENCE THE DECISION TO OUTSOURCE MAINTENANCE IN THE PROCESSING INDUSTRY

The success rate of outsourcing in South Africa is fairly low. Companies that make the incorrect decision to outsource maintenance place themselves at risk of poor maintenance performance, a high operational cost of maintenance, and substantial costs to redevelop internal maintenance capabilities. The identification of the factors applicable to the decision to outsource maintenance can form the basis of a decision framework or model, and has the potential to improve the quality of decision-making in maintenance management. This paper discusses the results of a survey that was carried out to determine the main decision factors that maintenance and asset managers could use when they consider outsourcing some maintenance work. Most of the 62 respondents were from the oil and energy sector or the chemicals sector of South African industry. The main decision factors were identified as contractor experience, the availability of a suitable contractor, and the scarcity of skills or employees. The findings of this survey are useful for maintenance and asset managers to decide whether or not to outsource an activity, and to rank potential contractors.

Trade and profit efficiency of manufacturing industries in South Africa

The relationship between trade and industrial performance has received a great deal of empirical attention over the past three decades. Much of this empirical attention has however focused on productivity, employment, and output growth oblivious of profit effects – the primary motive for manufacturers. Different from this literature, this paper contributes to the existing body of knowledge by testing the hypothesis that trade affects profit efficiency of manufacturing industries through its effect on technical and allocative efficiency. Using a panel stochastic frontier model based on 28 South African manufacturing industries observed between 1970 and 2016, evidence confirms a strong positive effect of export intensity on profit efficiency that operates mainly through technical efficiency. Import penetration appears to have improved allocative efficiency without having a discernible effect on profit efficiency. The former result lends empirical support to the long-standing view that outward-oriented policies have the potential to enhance industrial profit maximization while the latter result suggests that inward-oriented polices at worst promote suboptimal input allocation.