SA’s only waste tyre plan goes into pro­vi­sional liq­ui­da­tion

The Star Early Edition - - BUSINESS REPORT - Roy Cokyane

THE CON­TRO­VER­SIAL Re­cy­cling and Eco­nomic De­vel­op­ment Ini­tia­tive of South Africa’s (Redisa), the only ap­proved waste tyre plan for the coun­try, has been placed in pro­vi­sional liq­ui­da­tion, fol­low­ing an ur­gent High Court ap­pli­ca­tion by Water and En­vi­ron­men­tal Af­fairs Min­is­ter Edna Molewa.

The ap­pli­ca­tion was launched by Molewa af­ter she be­came aware of Redisa’s in­ten­tion to cease col­lect­ing waste tyres ef­fec­tive from last Thurs­day.

It also fol­lowed Molewa last week giv­ing no­tice that she was con­sid­er­ing the pos­si­ble with­drawal of Redisa’s in­te­grated in­dus­try waste tyre man­age­ment plan for mul­ti­ple rea­sons, in­clud­ing Redisa’s fail­ure to achieve its ob­jec­tives and the lack of proper gov­er­nance and/ or ac­count­abil­ity.

Molewa said on Fri­day that the suc­cess­ful ur­gent liq­ui­da­tion court ap­pli­ca­tion to the Cape Town High Court was made “to safe­guard the op­er­a­tions and as­sets” as­so­ci­ated with the Redisa plan.

Darusha Moodliar from Sanek Trust Ser­vices has been ap­pointed liq­uida­tor of Redisa.

Redisa’s de­ci­sion to cease all waste tyre col­lec­tions fol­lows the im­ple­men­ta­tion ef­fec­tive from Fe­bru­ary 1 this year of an en­vi­ron­men­tal tyre levy through the Cus­toms and Ex­cise Act.

This re­sulted in the pre­scribed levy of R2.30 a kilo­gram ex­clud­ing VAT be­ing paid to the SA Rev­enue Ser­vice (Sars) in­stead of di­rectly to Redisa.

Her­mann Erdmann, the chief ex­ec­u­tive of Redisa, claimed last week Redisa had not been al­lo­cated any funds post Fe­bru­ary 1.

In terms of the court or­der, the pro­vi­sional liq­uida­tor was di­rected to take im­me­di­ate con­trol of the busi­ness of Redisa, in­clud­ing the ad­min­is­tra­tion and im­ple­men­ta­tion of the ap­proved plan, the reg­is­tered of­fice of Redisa and “of all as­sets” found at its of­fices in Clare­mont in Cape Town.

This in­cludes con­trol over and “full and un­re­stricted ac­cess to the Or­a­cle com­puter sys­tem and all bank ac­counts” held by or on be­half of Redisa.

The pow­ers of the pro­vi­sional liq­uida­tor in­cluded the power and au­thor­ity to con­tinue to con­duct the busi­ness of Redisa as a go­ing con­cern.

Molewa as­sured all stake­hold­ers that her de­part­ment was act­ing in the best in­ter­ests of the waste tyre man­age­ment in­dus­try, the work­ers, small, medium and mi­cro en­ter­prises and the public and would en­deav­our to man­age the process in the best man­ner pos­si­ble.

Redisa’s ap­proval in 2012 by Molewa was marked by con­tro­versy, with both the SA Tyre Man­u­fac­tur­ing Con­fer­ence (SATMC) and Re­tail Mo­tor In­dus­try Or­gan­i­sa­tion (RMI) and the Tyre Deal­ers Association both launch­ing court ap­pli­ca­tions to op­pose this ap­proval and for Molewa to con­sider ap­prov­ing more than one waste tyre plan for the coun­try. The SATMC failed to re­spond to a Busi­ness Re­port re­quest for com­ment.

Jakkie Olivier, the chief ex­ec­u­tive of the RMI, said it had from the out­set viewed the Redisa plan with great scep­ti­cism for a num­ber of rea­sons.

These in­cluded Redisa’s fla­grant dis­re­gard to ad­dress the gov­er­nance is­sues as re­vealed by the for­mal re­view of Redisa by an ac­cred­ited au­dit firm and the un­work­a­bil­ity and poor ex­e­cu­tion of the plan. He said the RMI had warned right up front “the in­ten­tion was self en­rich­ment” and had re­quested that waste tyre levies not be paid di­rectly to Redisa but through Sars to en­sure con­trol of these funds by the Au­di­tor-Gen­eral and through the Public Fi­nance Man­age­ment Act.

Olivier said Molewa’s ac­tion came in the face of mul­ti­ple and con­tin­ued rep­re­sen­ta­tions over an ex­tended pe­riod to both Redisa and the en­vi­ron­men­tal af­fairs de­part­ment about the poor op­er­a­tional func­tion­al­ity of the Redisa plan.

“We’re pleased with the swift ac­tion (by the Min­is­ter) at the end, but it’s a sad mo­ment, be­cause it’s what we asked for from the be­gin­ning and over many years,” he said.

Olivier ex­pressed con­cern about the huge in­con­ve­nience that would be caused to the tyre fit­ment in­dus­try by Redisa’s liq­ui­da­tion, be­cause tyre dealer would now not have any method of re­moval or dis­posal of waste tyres and lim­ited ca­pac­ity to store waste tyres. He said the non col­lec­tion of tyres also left waste tyre col­lec­tors “at a point of des­ti­tu­tion”.

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