Cross-Border Charges Policy Framework Overview

Etiyel Chibira PRESENTATION ON CROSS-BORDER CHARGES Roads Policy Funding Framework Workshop 07 March 2018

OUTLINE OF THE PRESENTATION Agenda Introduction Why Implement Cross-border Charges Legal Basis for Cross-Border Charges Policy Alignment Countries that Implemented Cross-Border Charges Concluding Remarks

INTRODUCTION INTRODUCTION INTRODUCTION Introduction Reducing operational constraints Regulating competition Liberalising market access Strengthening public sector capacity Empowering cross- border Mandate of the C-BRTA Improving unimpeded flow operators

INTRODUCTION Introduction The C-BRTA is tasked to implement regional road transport agreementswith respect to cross-border road transport amongst other responsibilities. Key tasks that anchor the mandate of the Agency include reducing operational constraints that are faced by cross-border road transport from time to time and enhancing unimpeded flow of both freight and passenger transport by road in the region. The mandate also requires that the Agency ensures a fair, equal and even operating environment for cross-border road transport operators to conduct business. The Agency conducted a study to assess cross-border charges that other countries in SADC are charging on South African operators in response to operators complaints but also with a view to harmonize the regulatory framework.

WHY IMPLEMENT CROSS-BORDER CHARGES Why Implement Cross-Border Charges In order for the country to fully implement the SADC protocol, agreements and harmonise regulatory framework. We are not compliant to regional agreements The cross-border road transport environment between South Africa and the rest of the region is unharmonised, uneven, unequal and disadvantages South African operators South Africa is the only country in SADC that is not levying cross-border charges on foreign cross-border operators transiting or destined to the country. Foreign cross-border road transport operators (freight, bus and taxi vehicles) do not pay cross-border charges in the RSA. The fact that South Africa is not levying cross-border charges whilst South African operators pay cross-border charges means that South Africa is indirectly subsidising foreign cross-border road transport operations at the expense of South African operators. The cost of doing businessis very high for South African operators conducting cross-border operations compared to operators from the rest of the region.

LEGAL BASIS TO IMPLEMENT CROSS-BORDER CHARGES Legal Basis to Implement Cross-Border Charges The Cross-Border Road Transport Act, Act 4 of 1998 provides the legislative basis for implementation of cross-border charges. o Section 24 of the Act provides that the Board must advise the Minister, as the need arises or upon request of the Minister, on cross-border road transport policy matters, including strategies to counteract restrictive measures implemented by other states. o Section 51 of the Act indicates that the Minister, after consulting the Board, may make regulations, not inconsistent with this Act, relating to: (a) the fee structure for permits and other fees (b) the consignment notes and passenger lists and (c) anything that must or may be prescribed in terms of this Act

LEGAL BASIS TO IMPLEMENT CROSS-BORDER CHARGES Legal Basis to Implement Cross-Border Charges Section 2(1) of the Act further states that the Minister may, subject to the provisions of the Constitution, enter into an agreement with another state whereby arrangements are made with that state to control and regulate cross-border road transport between the Republic and that state based on reciprocity, similar treatment and non-discrimination and where appropriate, extraterritorial jurisdiction. The SADC Protocol demands that road transport policy and regulatory mechanisms in respective countries be based on equal treatment, non-discrimination, reciprocity and fair competition. Article 4.5 provides for the nature of charges member states may activate. Article 4.5.2 Member states may introduce levies including cross-border charges as part of funding sources. Article 5.2 development of harmonized road transport policy providing for equal treatment, non- discrimination, reciprocity and fair competition. Article 5.4 conclusion of standardized bilateral or multilateral agreements based on the principles of non-discrimination, reciprocity and extra-territorial jurisdiction.

POLICY ALIGNMENT Policy Alignment The implementation of cross-border charges is aligned to key directives in the National Development Plan Vision 2030 with respect to the need for harmonising policies between South Africa and regional trading partners. The White Paper on National Transport Policy, the Roads Policy, the National Freight Logistics Strategy (NFLS) and National Road Freight Strategy (NRFS) undergoing review elevates the need for harmonising the regulatory framework between the country and neighbouring countries and elimination of constraints faced by cross-border road transport operators. There is also recommendation for charging of tariffs on road users and pursuit of other funding mechanisms towards the broader goal of providing a safe, secure and efficient road transport system.

COUNTRIES THAT IMPLEMENTED CROSS-BORDER CHARGES Countries that Implemented Cross-Border Charges Mode of Transport Levied Cross-border charges per Country Passenger Transport Country Freight Transport Bus Taxi Botswana No Taxis Malawi Mozambique Namibia Lesotho Swaziland No Taxis Zambia Zimbabwe DRC - -

EXAMPLES OF CROSS-BORDER CHARGES Examples of Cross-Border Charges Implemented Foreign Vehicle Road safety tax Foreign Vehicle Access Fees Foreign Entry per person fees Foreign Border crossing fee Foreign Parking fees Foreign Visa Vehicle card entry fee Tourism yellow fever vaccination Foreign Transport permit per entry Government tax Disinfection fee Late foreign vehicle arrival fee Vehicle escort fee Weighbridge fee Municipal fee Bridge access fee Foreign vehicle environmental management fee Goods inspection fee

CONCLUSION Conclusion Implementation of cross-border charges for foreign operators will ensure that we: Harmonise the Regulatory Framework and create a fair and equal environment. o Enable South Africa to comply with the SADC Protocol. o Enable South African operators to compete fairly with foreign operators. o The country will generate over R10 Billion Net per annum. While an impact assessment is still to be conducted our view is that the levying of cross-border charges on foreign cross border operators will not have a significant impact on the overall cost of doing business in the region. Indications in the region are that cross-border charges are here to stay. We recommend that South Africa consider implementing cross-border charges.

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