Govt probes Shein amid concerns over its rapid gains in SA
As parts of business and labour in SA sound the alarm that Chinese fast-fashion retailer Shein could be exploiting tax loopholes to undercut local retailers and manufacturers, the government has confirmed an investigation is underway.
Shein meanwhile says it is committed to ethical business and wage practices as well as abiding by the laws and regulations, but there are mounting concerns in some quarters about the rapid gains it is making the South African market.
Founded in 2008, Shein is a Chinese online retailer that ships to more than 150 countries. It markets its clothes primarily via social media, and has gained a fast-growing market in South Africa - as was evidenced by long queues outside its local logistics partner`s premises during the past festive season.
The retailer`s clothing sells at super-cheap prices, with dresses on offer from far below R100.
The company has been accused of violating worker rights, with reports of 75-hour working weeks. Being a seller of cheap fast fashion, it has also been criticised for adding to waste and environmental problems.
But central to the concerns of the Southern African Clothing and Textile Workers Union (Sactwu) and the National Clothing Retail Federation (NCRF), is a belief that Shein may be exploiting tax loopholes to bring in goods far more cheaply than other international players and local companies.
They also believe the Chinese retailer could be undermining both the manufacturing and retail aspects of the Retail-Clothing, Textile, Footwear, Leather Master Plan (R-CTFL), which the government and local clothing sector agreed on in 2019 to try and encourage more local content and jobs.
Sactwu`s national industrial policy officer, Etienne Vlok, says the union has concerns about Shein`s growing impact in SA.
`We think it is bad news for workers, it`s bad news for the economy and it`s bad news for the environment.`
He said the union and the NCRF, which represents top retailers such as Foschini owner TFG, Truworths, Woolworths, Mr Price, Pick n Pay Clothing, Queenspark, Cape Union Mart, the LA Group, Cotton On and Retailability, had raised their concerns with the Department of Trade, Industry and Competition (DTIC).
They are hoping for a probe of whether there are any loopholes that could be helping Shein.
The DTIC confirmed to News24 that its investigation on Shein is progressing in partnership with organised business and labour.
Vlok said that the model Shein used appeared to be based on avoiding or paying reduced import duties, `exploiting the ecommerce loopholes`.
`In terms of customs legislation if you bring in small packages, you don’t pay duties, that is because the duties are reserved for larger consignments. And so, what Shein seems to be doing is exploiting that loophole by exporting in very small quantities often directly to the customer or their local distribution warehouses. They also, we have been told, apportion the contents of packages so that they can be put in more than one smaller parcels, so they stay below the threshold for duties on small packages. This means they are paying much less import duty than they would otherwise do.`
SARS did not want to comment, saying it was not permitted to disclose the confidential tax affairs of any taxpayer.
Another issue for Vlok was that there did not seem to be any meaningful local investment in SA by Shein, adding that at best `there may be a couple of jobs in warehouses`.
As a result, there was no significant benefit to SA in terms of additional revenue, taxes or jobs being created and that the fiscus was also possibly losing out because import duties were `not being paid in the way that they were intended`.
`Our concern is that this has a negative impact on the industry because those import duties are supposed to support local job creation and local investment. It has a negative impact on local clothing manufacturers and also on those businesses in SA who do comply with import duties. Now it means that suddenly, Shein is bringing in a garment for which they may be paying only a third or quarter of the duties payable, whereas its competitors, both local and international, may be paying the full duty.`
`This has an impact on the jobs of those businesses, but it could also mean that those local companies may start to use the same loopholes if they are legal and find other ways to ensure they are more competitive, which is a race to the bottom we should not be getting into.`
Questions over labour practices
Vlok said it was well-documented that Shein also used `sweatshop labour` to produce extremely cheap products.
`There have been reports done on the conditions in their factories and the conditions seem to be very bad with people working weeks on end with one day off a month, sometimes working 18-hour days. A kind of return to old sweatshop models, quite different from what we`ve been seeing recently in China where employment conditions have been improving.`
As for the environmental impact, he said Shein`s fast-fashion model resulted in products being made that were `not of a high quality` and `not supposed to last beyond a couple of months`.
`The result is the consumer is winning in the short term because they are getting a very cheap product, but that product does not last. Then the products have to get disposed of and new products have to be bought. The disposed of clothes then land up in landfills, damaging the environment.`
Michael Lawrence, who heads up the NCRF, said his organisation thought that Shein`s practices in SA `may not be fair` and was concerned about the legality of its business model.
He said if Shein was bringing in large containers of goods, NCRF did not know if these were `being correctly cleared through customs`.
`They are a market disruptor at price points we don`t understand and I think may suggest that things are not being done in a fully compliant manner in terms of a fair and competitive environment,` said Lawrence.
Of central concern to Lawrence as well was that offshore online clothing platform sales like Shein is not accountable to the same standards as local retailers.
`We have no way of protecting the consumer, we have no way of verifying the integrity of manufacture, we have no way of verifying the integrity of products at all. It`s one thing to say `let the buyer beware`, but we live in an environment where we have come to accept that in SA we are trying to build a confident consumer base off an accountable group of goods and service providers. That will include imported duties. We don`t have any opportunities for accountability mechanisms for offshore platforms like Shein.`
He said the federation had approached the government for help because the R-CTFL master plan was put in place to create `a community of accountability to achieve certain ambitions`.
He said the federation was not trying to take away `the competitiveness` or remove opportunities for improving quality and price for consumers, but that it wanted everyone who operated in the South African environment to be commercially accountable.
`And we don`t know whether Shein are or are not. What we are seeing is incredibly well priced product coming in that does not line up with our understanding of what is available in the international commercial retail market.`
A Shein spokesperson told News24 that the company was committed to respecting human rights and adhering to local laws and regulations in all its markets.
`Our suppliers must adhere to a strict code of conduct that is aligned to the International Labour Organisation core conventions.`
As for the environmental concerns raised, it claims its model was especially good at reducing wastage, because it avoid overproduction due to its on-demand model. `As a result, we only respond with larger production to meet demand if it`s warranted, reducing the unsold inventory percentage to single digits (versus an industry average of 30%).
Shein said it had also begun `on-shoring and near-shoring, opening new distribution centres around the world` such as its one in Whitestown, Indiana, that will help it reduce the fuel it uses for shipping.
It was also committed to sourcing only `forest-safe man-made cellulosic fibres and paper packaging products` by 2025 and had launched programmes such as Shein Exchange, where customers can resell their products.
`When we surveyed customers last year, more than two-thirds shared that they give Shein products to family or friends when they are done wearing them
Home Affairs rejects almost 9 000 ‘refugees’ in 12 months
Cape Town - The Department of Home Affairs (DHA) processed 10 643 newcomer asylum applications in five refugee reception centres during the 2022/23 financial year, and rejected 8 948 of them, Minister Aaron Motsoaledi revealed in Parliament. Although lobby groups are pushing against what they deem to be anti-foreigner sentiment from the DHA, a city activist grouping says Motsoaledi’s figures were slightly down from last year. The term “refugees” refers to people who have fled wars or persecution, while “asylum seekers” describes people who claim to be refugees but whose claim has not been reviewed. DA MP Adrian Roos asked Motsoaledi for the number of newcomer asylum applications processed for each refugee reception centre in the previous financial year, and how many were rejected as “unfounded”, “manifestly unfounded”, and those granted. V.4805
Click here for full article24. Apr. 2024 Reuters
Australia unveils direct pathway to citizenship for New Zealanders
SYDNEY, April 22 (Reuters) - Australia announced on Saturday a direct pathway to citizenship for New Zealanders living in the country, reversing controversial visa rules a day before a visit by New Zealand Prime Minister Chris Hipkins. Hipkins, set to visit Queensland state`s capital Brisbane on Sunday, hailed the move as `the biggest improvement in the rights of New Zealanders living in Australia in a generation`. The changes, effective from July, meant New Zealand citizens living in Australia for four years or more could apply for citizenship without having to become permanent residents first, Australian Prime Minister Anthony Albanese said in a statement. `We know that many New Zealanders are here on a Special Category Visa while raising families, working and building their lives in Australia. So I am proud to offer the benefits that citizenship provides,` Albanese added. V.4806
Click here for full article24. Apr. 2024 You
I’m officially a South African: joy of Limpopo man who’s battled to get an ID for 10 years
For years his life was in limbo. He struggled to get a job, couldn’t get a driver’s licence and he wasn’t able to get married all because he wasn’t recognised as a South African citizen. Tebogo Khoza (26) was born in South Africa but he had nothing to prove it. For almost a decade he’s battled to show he is who he says he is and finally he has the precious piece of paper that will allow him to get on with his life. The North Gauteng high court in Pretoria recently ruled the department of home affairs should register him as a South African and issue him with an identity document. The first step was giving him a birth certificate and when he received it he could hardly believe his eyes. V.4807
Click here for full article18. Apr. 2024 Al jazeera
Zimbabwean migrants are part of South Africa`s fabric
The termination of the Zimbabwe Exemption Permit would damage South Africa’s reputation as a human rights leader in the region. A migrant worker is detained by South Africa Police Services officers after being stopped at a check point during an operation with the Home Affairs Immigration officers, September 22, 2022 [File: Marco Longari/AFP] From April 11 to 14, a full bench of the Pretoria High Court heard an application to set aside the termination of the Zimbabwe Exemption Permit (ZEP), a special facility allowing 178,421 holders temporary legal status to live, work, conduct business and study in South Africa. In April 2009, South Africa established the Dispensation of Zimbabwean Permit (DZP) to regularise the status of thousands of Zimbabwean nationals who had fled political and economic instability in their country, mostly between 2007 and 2009. ry. V.4798
Click here for full article18. Apr. 2024 News24
African billionaire migration affecting job creation - wealth report
Mauritius is one of the top 10 African countries with the most millionaires. • There are 52 African-born billionaires globally, and only 23 of them still live on the continent, according to the Henley & Partners Africa Wealth Report for 2023. • There are 138 000 American dollar millionaires, 23 billionaires, and 328 people worth more than a hundred million in Africa. • South Africa, Egypt, Nigeria, Kenya, and Morocco account for 56% of Africa`s high-net-worth individuals. African billionaires are migrating, affecting the ability of countries on the continent to create employment, according to the Henley & Partners Africa Wealth Report for 2023. The report noted that there were 52 African-born billionaires on the globe and that only 23 of them still lived on African soil, but not necessarily in their home countries V.4799
Click here for full article18. Apr. 2024 Businesstech
Amid economic hardships, investors see opportunity in South Africa
The South African economy has had its roughest downturn over the last three years, and despite ranking fairly well against fellow emerging economies in the BRICS block, the persisting challenges continue to threaten hopes of a thriving economy. These rough times the economy is experiencing has also seen business withholding capital and some redirecting it to stabilizing operations by investing in alternative power supplies instead of expansions. Previously when the same businesses were withholding capital, it was termed “investment strike” as the capital was not being redirected but simply withheld in a ‘wait and see’ silent protest. Both scenarios have the same impact but this time the money is being invested in a different sector of the same economy. V.4800
Click here for full article02. Jun. 2023 Businesstech
South Africa’s visa chaos, legal action is an option
The visa backlog at home affairs is causing serious headaches for people looking to travel or work in South Africa. Marisa Jacobs, Managing Director of Xpatweb, said that the Department of Home Affairs’ decision to withdraw the central adjudication system has led to a major visa backlog, with the minister of home affairs, Aaron Motsoaledi, saying that the backlog stands at over 60,000. The minister has, however, announced a new visa cession extending to 31 December 2023. V.4842
Click here for full article01. Jun. 2023 News24
Zimbabwe facing myriad `traditional` obstacles ahead of general elections
A tanking economy, lawfare, a shrinking civic space, propaganda, an electoral body under fire and disinformation have all come to the fore ahead of general elections in Zimbabwe. President Emmerson Mnangagwa has gazetted Wednesday, 23 August as the election date. Political parties have three months to convince the electorate to cast their votes for them. If there is a run-off, it will be held on 2 October. Various think tanks predict a close race between Mnangagwa and his biggest challenger, Nelson Chamisa of the Citizens Coalition for Change (CCC). The latest survey on the elections by US institute Fitch Solutions predicted a Mnangagwa victory because of the ruling party`s access to state machinery and resources. Zanu-PF`s overarching resources and influence compared to the opposition CCC, headed by Chamisa, will preserve its support in rural strongholds and win key votes in low-income urban areas. V.4841
Click here for full article29. May. 2023 SA Migration
Automatic abandonment of asylum application: An analysis of the Scalabrini Centre of Cape Town v Minister of Home Affairs judgment
The process of applying for asylum in South Africa is governed by the Refugees Act 130 of 1998 (Refugees Act). Sections 22(12) and 22(13) were introduced into the Refugees Act by the Refugees Amendment Act 11 of 2017, which came into effect on 1 January 2020. These provisions, and their subsequent Regulations, were the subject of litigation launched in the Western Cape High Court. The Scalabrini Centre of Cape Town instituted proceedings against the Department of Home Affairs (DHA), challenging the constitutional validity of sections 22(12) and 22(13) and Regulation 9 and Form 3 of the Refugee Regulations. These impugned provisions create an automatic presumption that asylum seekers have abandoned their application if they do not renew their asylum visa within 30 days after its expiry the effect of this automatic presumption can be far-reaching and may lead to asylum seekers who have genuine claims being deported back to circumstances in which they can face further persecution. V.4838
Click here for full article29. May. 2023 iol
Judge tells Home Affairs to get house in order, stop wasting taxpayers’ money
A judge gave the Department of Home Affairs a tongue lashing for wasting taxpayers’ money by not doing its work and ignoring applications made by the public. He said these ended up in the courts, usually with the taxpayers footing the legal bill on behalf of the department. Judge MP Phooko, sitting in the Gauteng High Court, Pretoria, said it was time “Home Affairs got its house in order”. He pointed out the courts were flooded with applications from people who could not get any answers from the department, regarding their legal status in the country. In the late V.4839
Click here for full article29. May. 2023 North coast courier
Tongaat Home Affairs official gunned down in street
The woman is believed to have been on her way home at the time of her murder. An as yet unidentified Home Affairs official was shot and killed in Gopalall Hurbans Road in Tongaat on Thursday afternoon at around 4pm. Members of Reaction Unit South Africa (RUSA) swiftly responded to multiple reports of the shooting. Eyewitnesses told RUSA officials a male passenger abruptly exited a still-moving car before drawing a firearm and opening fire on the woman driver. Her vehicle veered off the road and collided with a construction barrier. V.4840
Click here for full article26. May. 2023 News24
Rwanda`s most wanted genocide fugitive arrested in SA after three decades on the run
Rwanda`s most wanted genocide fugitive has been arrested in South Africa after three decades on the run. A collaborative operation by the International Residual Mechanism for Criminal Tribunals (IRMCT), the Fugitive Tracking Team and South African authorities resulted in the arrest of Fulgence Kayishema, 63, on Wednesday afternoon in Paarl, Western Cape. It had been known for years that Kayishema, who once worked as a bouncer, was hiding in South Africa. However, fractured relations between South Africa and Rwanda made it difficult to track and arrest him. V.4837
Click here for full article25. May. 2023 Moneyweb
Zimbabwean prisoners want to be paroled and repatriated
The release of Zimbabwean prisoners in South Africa appears to be supported by both governments. A campaign has kicked off to repatriate thousands of Zimbabwean prisoners eligible for parole. A letter sent by attorneys representing the Zimbabwe Exemption Permit Holders Association (Zepha) to the ministers of Home Affairs and Justice and Correctional Services demands action to facilitate the release and repatriation of Zimbabwean prisoners eligible for parole by Tuesday (23 May), failing which the matter will be taken to court. “The release of Zimbabwean prisoners eligible for parole is within the interests of justice and would save taxpayer money,” say Zepha’s attorneys. “Our instructions are to request that your respective departments work with the Zimbabwean Embassy in processing Zimbabwean prisoners in South Africa eligible for parole to be released and repatriated to Zimbabwe.” V.4836
Click here for full article22. May. 2023 iol
Don’t straighten my curls to fit your ID, angry Cape Town woman tells Home Affairs
Johannesburg, Is a picture really worth a thousand words? This is the question a Cape Town woman asked when she collected her new passport at a bank in the city. Much to her dismay, the woman, who does not want to be identified, found that her curls had been photoshopped by the Department of Home Affairs (DHA) and she was given a straight hairstyle. When asked about the alteration, the bank official told her all her curls could not fit into the passport photo and DHA had to change her hairstyle. In a Facebook post, the woman wrote: “Went to collect my passport at the bank (after a totally pain-free) process. When the guy handed me my passport obviously the first thing I did was turn to the photo page. Anyone who knows me, knows I hate photos, especially posed photos, which this was. I absolutely screeched. The guy looked petrified. Whaaaat? He asked. I told him to look at the photo. V.4834
Click here for full article22. May. 2023 SABC News
Registration of newborns being hampered by power cuts: Home Affairs
The Department of Home Affairs says rolling blackouts are having a negative impact on the registration of newborn babies, within the stipulated 30-day time frame. It says the use of generators during power outages is not without challenges. The department briefed Parliament’s Portfolio Committee on its performance in achieving its targets for the third and fourth quarters of the 2022/2023 financial year. V.4835
Click here for full article19. May. 2023 News24
Drag me to court,` Motsoaledi dares DA after claims he broke the law for UAE visit
DA MP Angel Khanyile said Home Affairs Minister Aaron Motsoaledi broke the law when he failed to gazette his declaration of the Bulembu Airport as a national point of entry to allow the Emirati president and his entourage into the country. • Self-admitted legal layperson Motsoaledi previously told the Portfolio Committee on Home Affairs he interpreted the law himself, and didn’t obtain a legal opinion. • Responding to the debate on his portfolio’s budget, Motsoaledi challenged Khanyile to drag him to court or to law enforcement agencies if she believed he broke the law. Home Affairs Minister Aaron Motsoaledi mockingly challenged the DA to “drag [him] to court or law enforcement agencies” after the party claimed he broke the law to allow the Emirati president and his entourage to enter South Africa at the Bulembu Airport last month. V.4832
Click here for full article19. May. 2023 Businesstech
Changes for e-Visas in South Africa
Home Affairs minister Aaron Motsoaledi says South Africa’s e-Visa systems will be expanded in the coming financial year to include more visa types. Delivering his budget debate address on Wednesday (17 May), the minister said that work is underway to develop and expand the current e-Visa system. He said that Home Affairs is critical to president Cyril Ramaphosa’s investment drive to kickstart the economy, and through Operation Vulindlela, has been given the mandate to improve the country’s overall visa regime. The minister said that to this effect, South Africa’s e-Visa system will be expanded to 20 more countries during the course of the year. V.4833
Click here for full article17. May. 2023 Cape times
MPs dissatisfied with new Home Affairs system updates
The BMCS system is replacing the 2010 Movement Control System (eMCS) and enables the capturing of fingerprint and facial biometric data of all travellers who enter or exit South Africa. Cape Town - The Department of Home Affairs report on challenges of the roll-out of the Automated Biometric Identification System (ABIS) and the Biometric Movement Control System (BMCS) left MPS unimpressed and requesting a quarterly update moving forward. The BMCS system is replacing the 2010 Movement Control System (eMCS) and enables the capturing of fingerprint and facial biometric data of all travellers who enter or exit South Africa. According to the department, in the 2022/23 financial year the system was rolled out to 34 Ports of Entry and up to 30% of immigration counters. V.4830
Click here for full article17. May. 2023 Pindula News
SA Opposition Supports ZEP Renewal For People From Matabeleland
The African People First (APF) opposition party in South Africa has supported Zimbabwe Exemption Permit (ZEP) renewal for people from Matabeleland, citing historical connections. This comes after representatives from the Ndebele King Bulelani Khumalo’s office, from the Mthwakazi Royal Kingdom, raised concerns about Zimbabweans facing deportation when their permits expire next month. The APF also spoke to South African Home Affairs Minister Aaron Motsoaledi about the issue. In a statement dated May 8, APF secretary-general Julie Pillay Mbuthuma said: We are hereby pleased to give you positive feedback on the meeting held with Motsoaledi on May 8, at his chambers, spearheaded by our president (Muzi) Hlengwa, accompanied by APF deputy president Bishop Dlamini and national chairperson Bee Hlengwa. V.4831
Click here for full article10. May. 2023 daily news
‘Our lives are on the verge of ruin’
WITH less than two months before the South African government terminates the Zimbabwean Exemption Permits (ZEP), gloom and despair have set in for the permit holders and their families. In January 2022, the South African cabinet decided that the ZEP arrangement had to be terminated by December 31, 2022, and applicants should apply for other visa regimes for which they qualify, or for a waiver of certain requirements of the visas they apply for to retain their legal status in the country. On September 2, 2022, Home Affairs minister Aaron Motsoaledi issued a directive extending the ZEPs for an additional six months, until June 30, 2023. V.4826