Luncheon with. Thomas C Hippele,

Transcription

1 Luncheon with Thomas C Hippele, President and Co-Founder of SwissCham Southern Africa South Africa Chapter, Tuesday, 12 th of July 2016, held at the Zunfthaus zur Schmiden, 8001 Zurich

2 Its activities and rise to an important voice of Swiss business in South Africa Ladies and Gentlemen, It is a great honour and pleasure for me to be with you today as your guest and speaker. Like any bilateral or mul;lateral Swiss Chamber of Commerce, there is a mother Chamber which in our case is your organisa;on and there is, at present, one country Chamber being ourselves, the South Africa Chapter; other country Chapters are well on the way. At your AGM in 2016, you have bestowed a great honour on me by appoin;ng me as a member of your Board. In my speech, I would like to give a brief background on SwissCham Southern Africa South Africa Chapter s history, then say something about our membership and then elaborate on our ac;vi;es and importance in South Africa. ThereaMer, I shall speak about our co- opera;on partners in general, and in par;cular co- opera;on with SCSA in Zurich and respec;ve future possibili;es for a more intense co- opera;on with yourselves. Then, I would like to show you our work in South Africa which (with some;mes necessary lack of modesty) I would call important, not for the sake of my person but for the importance our Chapter has developed over the years in marers of communica;ng the posi;on of Swiss business in South Africa to Government throughout all levels and in the compe;;ve environment of the country. Last but not least, I will gladly answer ques;ons, both on the actual speech and the work of our Chapter but also in general about South Africa in contexts which may be relevant for members of a Chamber of Commerce. Accordingly, I will also say a few words about the environment being South Africa as a poli;cal and economic reality in which we operate.

3 HISTORY SwissCham Southern Africa South Africa Chapter (SCSA- SAC) was formed and inaugurated on the occasion of an official visit by the then Federal Councillor for Economic Affairs, Doris Leuthard, in The first mee;ng of the Chapter took place thereamer in Johannesburg and we established ourselves as a bilateral Chamber of Commerce and industry. The presence of Swiss enterprises in South Africa dates back well over 100 years. Today, Switzerland is the sixth or seventh largest investor in South Africa (sixth or seventh depending on the data considered). At the ;me of the forma;on of the Chapter, Switzerland was s;ll number four or five. Before the Chapter was formed, well known Swiss enterprises and Swiss business people were organised within the Swiss Business Council (SBC), from which the first approximately 40 members became members of the Chapter. Originally, our Chapter was supposed to be formed before your organisa;on, but we experienced some delay as a group of South Africans not having obvious business interest in Switzerland had formed a Chamber of Commerce and Industry South Africa Switzerland, during the ;me the Business Council was considering its transforma;on. The Business Council as such did not have the ac;vi;es of a Chamber and was open on invita;on only. Once that with hindsight funny but at the ;me not- so- funny compe;ng Chamber had been dissolved by nego;a;on and with a pinch of force, the way was open for the Swiss Business Council to disband in October 2007 and join forces with the Chapter. OBJECT (PURPOSE) AND WORK OF THE CHAPTER The Chapter is an independent bilateral, non- poli;cal, non- governmental and subscrip;on based non- profit organisa;on, dedicated to strengthening and expanding trade rela;ons between the private sectors of Switzerland and South Africa. The Chapter, known as SwissCham in Southern Africa had its name SwissCham protected in South Africa and several neighbouring countries under the respec;ve trade mark legisla;on as a trademark for services. SwissCham (which name I will use as synonym for the Chapter) promotes and advances a business- friendly environment in general and the interests and views of Swiss business in South Africa in par;cular. In addi;on, we promote contacts and assist in building rela;onships between Swiss and South African business en;;es in the private sector. For our members, we hold business and social events with leading speakers from industry, Government and opinion leaders, provide an excellent networking and communica;on plaborm for our members and between members and the business environment and monitor poli;cal tendencies in South Africa and laws in the making, on which where appropriate and in the interest of Swiss business or for the freedom of trade and commerce in general, comment and seek dialogue with the South African Government on all levels of Government. Thus, SwissCham ac;vely voices where appropriate and in a construc;ve manner concerns and comments on dram policies, bills, legisla;on and Government processes leading to such and par;cipates in the requests for comments by the South African Government on intended legisla;on. Of course, we also approach policy makers or Government without an invita;on for comment when we deem it necessary.

4 Whilst world- wide a tendency is (or was at least for quite a few years) to see bilateral or country- connected Chambers of Commerce as a dinosaur on its way to ex;nc;on, we could create a space for the Chapter, expand it, and in spite of e- mail, social media and other modern means of communica;on of which we make use ourselves, create a network and plaborm convincing entrepreneurs and companies to join us and stay with us. SwissCham therefore works constantly on maintaining credibility and stability, which we then expand to our members to which the Chapter has been a door opener and connec;on- facilitator (and lobbyist!) to assist growing and maintaining business to mul;na;onals as well as medium and small enterprises. By now, we are even approached by South African Government En;;es, economy- related NGO s and other chambers of commerce, invited to their events or for comment on marers and par;cipa;on in their work. STRUCTURE OF SCSA- SAC Board of Directors: SwissCham has a Board of Directors as according to South African law, it had to be formed as a non- profit company, which means that we are subject to the strict rules of governance, bookkeeping, audi;ng and corporate marers in the same way as a Limited company in South Africa, which is the big sister of the Proprietary Limited company; we obviously do not have a share capital or shareholders but instead have members. Accordingly, we have to have a Board of Directors which currently consists of seven members, but is in the process of being expanded again. Directors Thomas Hippele President Bob Judelsohn Vice President MD of Portman Wealth Management (Pty) Ltd. Roberto Agustoni Treasurer CEO of Pharmaco Distribu?on (Pty) Ltd. Dr. Jürg Schalch Director Chairman of saxum Insurance Limited Pankaj Sinha Director MD of Schindler LiCs SA (Pty) Ltd.

5 Anita Die;ker Balz Abplanalp Director Head of the Swiss Business Hub SA Director Minister Counsellor, Embassy of Switzerland Overseas Directors Georg Umbricht Director (non- execu;ve) Hansjürg Saager Director (non- execu;ve) Unfortunately, through serious illness, we lost our highly appreciated and much liked colleague on the Board, Ian Donald, Managing Director and CEO of Nestlé, a few months ago. In addi;on to the seven members on the Board in South Africa, we have two of your Directors, being Georg Umbricht and Hansjürg Saager, as non- execu;ve Directors on our Board. All Directors work without receiving any payment from the Chapter. ExecuFve Manager The Execu;ve Manager of the Chapter (since 2010 Daniela Maurer) is the backbone of our opera;on: whilst the Directors (including the President) can only dedicate a rela;vely small part of their ;me to SwissCham, the Execu;ve Manager works on a 70% plus basis for the Chapter, takes care of all marers organisa;onal, membership care, membership expansion, collec;on of membership fees and event costs, works permanently on organising the future programme and new speakers, monitors the poli;cal and economic developments in the country and in Switzerland, co- ordinates between SwissCham on the one hand and the members, Government, poten;al speakers, all our co- opera;on partners and third par;es on the other hand, just to men;on some of the tasks. In addi;on, she arends Board mee;ngs during which she reports on approximately half of the items on the Agenda, and prepares the Minutes of the mee;ngs. Finally, the finances of the Chapter are administered by her in co- opera;on with the Treasurer (Roberto Agustoni since incep;on of SwissCham ). In order to develop a scope of ac;vi;es such as SwissCham s, an Execu;ve Manager is needed as without such, the Chapter would not be in a posi;on to have the ac;vi;es and events it has or to perform the work it does.

6 Members The Chapter has currently over 100 members and a few membership applica;ons are in the process of being made. At the ;me when I became the President of SwissCham, I set the ambi;ous target of having a stable membership (which means at all ;mes, as there are always - mainly smaller - businesses being sold or closed and memberships cancelled) of over 100, which target has been achieved by the end of Our membership ranges from self- employed businessmen s and - women s enterprises to small enterprises (50%) and further to medium enterprises (24%) right to large mul;na;onal corpora;ons (26%) and our members cover every sector and field of business of the South African economy. Large CorporaFons 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Medium Enterprises Large & mul;- na;onal Small Enterprises Corpora;ons ABB South Africa (Pty) Ltd. Buhler (Pty) Ltd. Clariant (Pty) Ltd. Credit Suisse DeloiRe & Touche Endress + Hauser Founda;on for Professional Development (FPD) Glencore Holdings (Pty) Ltd. Hil; SA (Pty) Ltd. KPMG Services (Pty) Ltd. Mediclinic Interna;onal Naledi Rail Engineering (Pty) Ltd. Nestle (South Africa) (Pty) Ltd. Novar;s (Pty) Ltd. Philip Morris (Pty) Ltd. Roche (Pty) Ltd. Schindler LiMs (Pty) Ltd. SGS (Pty) Ltd. Sulzer Holdings (Pty) Ltd. Swiss Interna;onal Airlines Swissport UBS Zurich Insurance Company (Pty) Ltd. Swiss Business Hub SA Sponsor Member

7 PROJECTS Whilst usually, as a Chamber of Commerce, doing projects of the kind is not our primary object, we nevertheless have engaged in a very large and equally important project: skills shortage has been iden;fied as a problem which needs to be urgently addressed, both by the private sector and the Government of South Africa. Having great experience in Switzerland with appren;ceships combined with profound training at a Technicon, the following project was defined and ventured into: Early in 2013, SwissCham in co- opera;on with the Swiss Embassy and the Swiss South African Coopera;on Ini;a;ve (SSACI), started an ini;a;ve on Skills Development against the background of a less- than- op;mal output from voca;onal colleges (TVET) in South Africa, which is a key contributor to the chronic shortage of skills faced by industry, including Swiss companies opera;ng in the country. The Government of South Africa recognises that Switzerland has a demonstrated outstanding strength in the area of voca;onal educa;on and training and its voca;onal ins;tutes produce highly skilled and employable students. Later in 2013, the Department of Higher Educa;on and Training (DHET), and SwissCham entered into a partnership aimed at improving the quality of teaching and learning in public TVET colleges, and making them centres of excellence in the na;onal skills development landscape. This partnership was officially announced on the 16th of April 2014 by the Minister of Higher Educa;on and Training, Dr. Blade Nzimande at the launch of the Department of Higher Educa;on and Training (DHET) SwissCham College Improvement Project, at the Ekurhuleni West College (EWC), in Germiston. Since then, a number of mul;na;onal Swiss companies opera;ng in South Africa are working collabora;vely to improve the standard of teaching and learning in South Africa s colleges. In support of Government s policy on skills development, these companies believe that the only way that colleges will produce graduates that have the skills required by industry is if industry gets involved in the delivery of the curriculum. Companies such as Nestlé, Schindler, Bühler, Sulzer, Geberit, Panalpina, ABB and Hil; have during the course of 2015 provided support to colleges in the form of guest lecturing, student and lecturer work placements, lecturer training and lecturer exchanges. Meanwhile, pilot programes are running in five different TVET colleges within the Gauteng province.

8 CO- OPERATION PARTNERS Whilst the majority of SwissCham s events are organised independently, there are a number of occasions at which the Chapter works with the Swiss Business Hub (an en;ty arached to the Embassy which is strongly and mainly connected to Switzerland Global Enterprise (S- GE) previously named OSEC) and/or the Embassy of Switzerland. Events where all three par;cipants have a role are for example the visits of Swiss Federal Councillors, Secretaries of State, events of the JEC (Joint Economic CommiRee), events involving an ac;ve discussion with South African na;onal Government and the like. Apart from these events, SwissCham has every now and then engaged with the Business Hub and from ;me to ;me with the Embassy of Switzerland for events which hold an interest to both or all three en;;es concerned and which some;mes take place at the Residence of the Ambassador of Switzerland in Pretoria. Apart from the aforesaid, there is an exchange, formally and informally, of informa;on and regular brainstorming involving the Swiss Business Hub and /or the Embassy. Co- opera;on is also sought where SwissCham submits official comment to the aren;on of a Department of the South African Na;onal Government and/or a Parliamentary Porbolio CommiRee on dram legisla;on which has been published for comment. Of course and at all stages, the main source of SwissCham s stance comes from introspec;ve posi;on- gathering with its members on the one hand and assessment of dram legisla;on by its Management and Board on the other hand. Whenever SwissCham comments on dram legisla;on or important economic marers, it is the lead partner as the comment will finally be SwissCham s responsibility and be submired under its lererhead. SwissCham is a member of the IRR (Ins;tute of Race Rela;ons), which Ins;tu;on has been around for more than four decades and was previously known as SAIRR (South African Ins;tute of Race Rela;ons). For those who do not know the IRR: it is a non- profit organisa;on, same as the Chapter, which is not mainly engaged in race rela;ons in the narrow sense but rather, it has become the best and most reliable economic analyst, source of sta;s;cs and scenario planner in South and meanwhile Southern Africa. Whenever highly informa;ve data and sta;s;cs and studies are required, both the private sector and the South African Government do turn to the IRR. Our rela;ons with the IRR gives us access to all their studies, a certain amount of hours spent individually on the Chapter s requests or projects, and a highly fruibul and precious exchange of thoughts when we are dealing with submissions on important new legisla;on or poli;cal tendencies.

9 Co- operafon with SCSA The co- opera;on with SCSA is effected regularly through an exchange of thoughts between the Directors of the Chapter who are Directors of SCSA and vice versa. However, the official co- opera;on is rela;vely loose at present but there is a mutual wish on the sides of both SCSA and the Chapter to intensify the co- opera;on. Since quite a few years, all Minutes of the Chapter s Board mee;ngs are provided gaplessly to the Board of SCSA, same as all official submissions of the Chapter and its event reviews. A few years back, we introduced a rule at the Chapter that all members of SCSA, if arending our events, have the right to par;cipate at the same cost as we charge members and not at the higher cost which is charged to guests. The same seems to apply reciprocally to the extent that SCSA charges different rates. Furthermore, the management of the Chapter has created certain logos and an arrac;ve website, the logo having been made available in an appropriately changed format to SCSA and the Chapter s website shows a well- visible link to SCSA s. Finally, the informa;on on the Chapter s website is accessible to members of SCSA. So and hopefully for good reason, the co- opera;on between SCSA and the Chapter is friendly, posi;ve and construc;ve. However, it is in a way not all that intense. Not wan;ng to pre- empt discussions between the two Boards but in the sense of ideas for improving and intensifying the co- opera;on, there would be topics such as dual membership, (i.e. pay the one or the other who will then transfer a certain amount to the respec;ve other en;ty and be full members of both), berer flow of more detailed informa;on and regular teleconferences between the Boards or Execu;ve CommiRees to address common issues in more depth. Further, a regular exchange of ideas and informa;on as well as methodology between the Execu;ve Managements of SCSA and the Chapter could be an important factor to deepen the rela;onship and assist SCSA (and the Chapter) in expanding its ac;vi;es. Maybe, when the ques;on and answer and discussion session opens just now, some of you will have sugges;ons to make. Last but not least, the region of Southern Africa has started to move in a posi;ve direc;on a few years back: Mozambique is opening up for business, concluding reciprocal investment protec;on trea;es and developing the gas industry, but with a firm inten;on to expand from proceeds of its rich mineral and gas wealth into all sectors of the economy; Botswana is a highly arrac;ve des;na;on in Southern Africa, connec;ng to seaports to the east and west by rail and berer roads to overcome the disadvantages of its landlocked posi;on, just to name two. Accordingly, SCSA should be looking more intensely at crea;ng new Country Chapters, in Mozambique and Botswana as well as other countries of the region as may become appropriate in future. For the Chapter, these would be sister Chambers whilst SCSA is the mother Chamber or big sister and SwissCham in South Africa could, being in a berer posi;on, foster nego;a;ons and ac;vely support the crea;on of country Chapters in the region. SwissCham s Cons;tu;on is, as amended at the AGM in 2015 by unanimous consent of all members, a blueprint which could be exported into other countries, subject to small amendments according to local legisla;on.

10 Apart from the aforemen;oned co- opera;on partners, SwissCham has in marers of great importance such as the new B- BBEE legisla;on, the termina;on of bilateral investment protec;on trea;es, the planned infringement of intellectual property rights, just to name a few, ac;vely worked with other Chambers in South Africa, such as the American Chamber, the German Chamber, the French Chamber, the Bri;sh Chamber, the Scandinavian Chamber and the Austrian Chamber, just to name a few. We have also engaged with the Free Market Founda;on and similar organisa;ons being ac;ve in the field of crea;ng a berer and more compe;;ve economy. SWISSCHAM S WORKING ENVIRONMENT Our working environment is South Africa, i.e. the South African business environment consis;ng of the country s economy, laws, Government, percep;on in the rest of the world and resources of all kinds available in South Africa. Unfortunately, the world economy is not at its best and the appe;te of the larger established economies to invest in BRICS states and emerging markets has been dampened for the ;me being. In addi;on, South Africa has engaged in the enactment of quite a few laws which are regarded as hos;le to investors and has moreover, effec;ve last year, terminated numerous reciprocal investment protec;on trea;es with mainly European countries, which countries in total make for not less than 80% of all Foreign Direct Investment (FDI) in South Africa. Last but not least, South Africa s taxes are rela;vely high compared to many other markets (and the Government is insis;ng that tax holidays or tax breaks are not proper incen;ves for investors, unlike many other Governments who have successfully established such tax incen;ves); labour is expensive, produc;vity is low and there is a lot of red tape around obtaining work and residence permits for investors and/or managers of foreign owned companies and their families, the currency is not very stable and has serled at a very low exchange rate making the many imports into the economy expensive. Also, Broad- Based Black Economic Empowerment, known as B- BBEE, makes investment more burdensome. Many of the aforesaid are factors which are homemade by which I mean they are in the hand of the South African Government and lawmakers (Parliament) and thus a choice that has been made, which could be changed to the berer or the worse.

11 As you are no doubt fully aware, the economy in South Africa is not great at this stage. Apart from some unfortunate policies on which the Government has ventured, the general state of the world economy, the already men;oned diminished appe;te of investors to engage in emerging markets and a high level of corrup;on have done their fair share to bring about this situa;on, paired with a percep;on outside South Africa that the Government of the country is more engaged in ruling party internal rivalry, securing voters and marers of personal interest rather than formula;ng and firmly implemen;ng posi;ve and credible strategies towards improvement. Interna;onal ra;ng agencies have rated South Africa at one notch above junk status, which ra;ng was recently confirmed, preceded by well- founded fears that we may not be able to maintain such status and have to take the jump on the dump. In mid where we are now, the country s economy is hovering on the brink of recession having been assessed at a growth level of 0.1%. According to some leading economists, the recession has already clawed us from behind. In addi;on, we are facing a wider unemployment rate just under 40% and tensions of a social nature and based on inequali;es between different racial groups are exploited by quite a few poli;cians and poli;cal par;es. The danger of such exploita;on is that social and racial tensions, instead of being soothed, are inflamed which may result in an even more difficult and difficult- to- control overall environment. The sad story is that the vision held by Nelson Mandela and FW de Klerk at the ;me the new South Africa was born, being the vision of a country where tensions subside and a Na;on can be built, have not become reality and have been s;fled by the very same poli;cal bodies from which these two remarkable Nobel Prize laureates emerged. Say something posi;ve, man! - that is what my South African friends would now shout at me and so would probably governing poli;cians. However, there are ;mes when posi;ve news and views come easier and ;mes when they become more difficult. Nevertheless, and with inner convic;on, I can say that South Africa has, apart from all the aforemen;oned factors which make its environment and reality, also truly posi;ve ones:

12 there is an emerging middle class in the country which by now has expanded considerably during the last 20 years and most of the people who have arrived in this expanded middle class come from a previously disadvantaged background. This is per se good news as it is a trite fact that a stable middle class of a reasonable size is an important poli;cal stabilizer. Whilst the size of our middle class is not yet as strong as it should be, we have made remarkable progress. Moreover, in any country, the spirit of the people and the way they are, play an important role when it comes to gewng an economy out of troubled waters. South Africans are innova;ve and entrepreneurial people. There is, especially in amongst the younger people, a strong wish towards independence in the sense of self- employment and having one s own business. There are also many good and innova;ve ideas born in South Africa. Thus, if the poli;cal environment did away with some red tape resul;ng in the small and micro businesses and entrepreneurs being empowered, we may see a stronger and faster turn in the right direc;on. Ladies and Gentlemen, please accept my sincere thanks for having me as a speaker today and for your interest in my presenta;on. I would now be available for ques;ons, regarding the Chapter but also about the South African business environment. Thank you very much!