While defending the broad ambitions of government’s various industrial and economic policies, Department of Trade and Industry (DTI) chief economist Stephen Hanival has conceded that the objectives of these policies – and of any amendments to them – have often been “badly communicated” to the business sector, often resulting in a lack of buy-in from private sector players.

Hanival, who was speaking at the DTI’s Economic Policy Dialogue, in Johannesburg, said the department acknowledged the need for policy clarity, and encouraged “frank and granular” discussions around legislative concerns.

“Often, helpful policy objectives are communicated quite badly to the business community and [as such] we need a more nuanced debate around policies. These policies are positive developments, but they’re just not well communicated or understood.

“The department is concerned if we are not sending the right messages,” he said on Tuesday.

Hanival’s comments came in response to concerns raised at the forum by Nedbank Group chief economist Dennis Dykes and Investec chief economist Annabel Bishop, both of whom cited an “uncertain” local policy environment as a chief driver of South Africa’s continued economic “underperformance”.

“Some parts [of local economic policy] are positive, most notably around the fiscal regime and incentives, but then you get a bomb-blast [of policy uncertainty] around legislation such as the Mineral and Petroleum Resources Development Act (MPRDA) [Amendment Bill ]and the Labour Relations Act Amendment Bill. There is also far too much discretion given to the Minister,” he commented.

“[This leads to] a gap between policymakers and the private sector, which results in insurmountable obstacles, which are not [actually] insurmountable at all.”

The MPRDA Amendment Bill remained a bone of legislative contention, with the private sector reproachful of government for not being transparent about the extent to which legislation governing hydraulic fracking and shale gas exploration in the country would be included in the amendment.

Engineering News Online last week quoted law firm ENSafrica oil and gas expert Dr Luke Havemann as stating that the country did not have the “most appropriate” legislative and regulatory framework regarding fracking, and that the MPRDA Amendment Bill had been heavily contested on several fronts.

“Commentary on the MPRDA has, for years, been highly critical of its aim to regulate terrestrial mining and oil and gas. Many, including myself, believe that [the] oil and gas [industry] should have its own . . . specific legislative and regulatory framework,” he noted, bolstering the argument for improved communication on government policy.

Meanwhile, responding to further assertions by both economists on Tuesday that various economic policies needed to be “tweaked”, Hanival addressed the “elephant in the room” by again calling for “frank and open” discussions between the Department of Mineral Resources and business factions.

“Lets have a detailed, honest engagement where the private sector can communicate to the department exactly what these areas of contention are.

“We need a plan that everyone agrees with and is implemented, rather than [every policy or amendment] being debated to the nth degree,” he asserted.

While acknowledging concerns by employers over amendments to the Labour Relations Act, which they claimed would stifle productive business management and employment creation, Hanival countered that these were a necessity to ensure the creation of an inclusive economy that was cognisant of the needs of its lowest-paid workers.

“Companies tell the department all the time about their labour markets issues, but they don’t understand the complexities of the labour market, or the dynamics present between labour brokers and their workers. Many [employers] simply aren’t meeting basic labour legislation requirements,” he noted.

However, according to Dykes, the new labour law codes – while well intentioned – would likely hurt investor confidence and ultimately subdue employment growth.

“Ultimately, labour concerns need to be balanced with economic considerations,” Bishop added.

The National Assembly last year adopted the Labour Relations Amendment Bill, which curtailed labour brokering but stopped short of an outright ban on the profession.

This came despite attempts by opponents to block the vote, claiming it would destroy “hundreds of thousands” of jobs, notably owing to the limits it placed on temporary employment.