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Friday Mar 09, 2012

De Lille declares war on Cape Town's red tape

Cape Town businesses say they are battling "unnecessary and complicated" red tape, in some cases stifling job creation and forcing them to bypass the law.

Against this backdrop, mayor Patricia de Lille has ordered a review of "outdated" by-laws. It is being run by the office of the speaker, Dirk Smit, who has called on UWC to help.

Officials from the provincial government and the city are also tackling "regulatory bottlenecks". Another suggestion is a forum of business owners and government officials to discuss regulatory concerns.

Last year, the city, the provincial government and the Cape Chamber of Commerce and Industry commissioned Mthente Research and Consulting Services to assess regulations affecting business.

Some 228 businesses took part, mostly in the city. Others were in Stellenbosch, Paarl and the Drakenstein.

Close to 75 percent of those surveyed said red tape was a moderate or major constraint.

They also reported increased "compliance costs", having to rope in extra resources to meet the requirements in some cases.

One participant said the firm normally handed over "red tape" to lawyers. However, this was expensive.

Some participants said they were being "forced to operate illegally in order to get around the red tape that currently constrains their operations".

Government officials taking part in a workshop as part of the study acknowledged that they did not give businesses enough help in complying with the law.

One City of Cape Town official said some staff "did not have the mindset" to help people. "They try to find a reason why something cannot be done.

"(For instance) there was a concert in the stadium and the permit office had not issued the permit and so the concert was almost cancelled four days before it was held. The problem was that the city was not looking to find a solution."

Other stumbling blocks for businesses were finding reasonably priced premises and applying for rezoning.

Problems in starting a business mainly came when registering with the Department of Labour and the South African Revenue Service.

When hiring staff, burdens were finding skilled employees and meeting employment equity requirements.

Further down the line there were problems with tender documents, with just over 37 percent saying it was "difficult to comply" with requirements.

Businesses also highlighted how transport – including Metrorail and traffic congestion – hampered productivity.

The study recommended more investigations, training in compliance, and the formation of a forum of employers and officials to keep businesses abreast of regulations.

De Lille said the "Red tape to red carpet" initiative was a joint project between the city, the provincial government and the chamber of commerce.

"All relevant aspects of council operations are being evaluated... specifically with a view to ensure we promote economic development."

De Lille said the office of speaker was reviewing by-laws in a process that started last August. Once recommendations were received, the relevant portfolio committee and department would develop possible changes.

"That will then be taken for public participation before they are formally considered by council," De Lille said.

Cape Argus

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