Volume 9, No.3 - September 2000

Job Creation Trust

an update on how your money is creating jobs

Background

On 30 October 1998, at the Presidential Job Summit, the three major trade union federations namely, Congress of South African Trade Unions (COSATU), National Council of Trade Unions (NACTU) and the Federation of Unions of South Africa (FEDUSA) called on their members to make a financial contribution of one day's wages in order to help create jobs.

This invitation was extended to the entire South African societ. Business was challenged to contribute one day's profit to the Job Creation Fund. About a year and half after its launch on 19 February 1999, about R50 million has been collected and more is still pouring in.

There was a quiet period between March 1999 while technical and administrative issues were being finalised; issues such as registering the trust as a non-profit-making, non-taxable organisation,investing part of the funds with Sanlam, getting auditors and reconcilers of the fund, and mostly negotiating with the Development Bank of South Africa (DBSA) to administer and manage the projects that will be funded by the Trust.

Objectives of the Job Creation Trust Fund (JCT)

The primary objectives of the JCT are to minimise unemployment. The subsidiary objectives and programmes of the trust are:

• Youth Employment
• Aids Awareness
• Women and Rural Poverty alleviation

The objectives and programmes of the Trust encompass a combination of social and income generation component.

Governance of the Trust

The Trust is comprised of 12 Trustees, most of whom are key figures from the labour movement. There are also Trustees who are eminent community and religious leaders. These trustees then spearheaded the formation of a technical committee made up of technical experts who deal with development projects/programmes from the religious members of the trust and from each of the federations.

This technical committee was mandated to take all the technical decisions, which include finalising the criteria, calling for programmes and selecting them. The last two tasks are to be done in collaboration with the DBSA.

Financial and legal capacity of the Trust

Currently, SANLAM is collecting, registering and depositing the donations of the Trust. The Trusts funds are currently being managed by Standard Bank, which has the Trust Account.

In terms of the Trust Deed, the Trust can borrow and collect money. The Deed also empowers the Trust to lend money to person's organisation or company (Clause 10.16). The Trust can also establish separate and designated funds.

Proposed role of DBSA in relation to JCT projects

DBSA'S role will be Project/Programme Management. This entails the whole process encompassing:

• Project solicitation and identification;
• Project Appraisal and Approval;
• Project Implementation and Monitoring, and
• Evaluation.

  The way forward

The soliciting of projects will be as wide as possible. The funding criteria and advertisements for concept papers will be placed in both electronic and print media and they should supply DBSA's contact details. The DBSA will use the criteria developed by the trustees, to sift through the one-page concept documents, and select the appropriate ones, for discussion and further sifting by the JCT Technical Projects Subcommittee.

Project appraisal

The DBSA would then communicate with the "Promising Concepts" and ask for more information as per standardised project proposal form, as well as communicate to the unsuccessful ones i.e. write letters of regret. Project approval The detailed project proposal will be assessed by DBSA against the set criteria. The recommended projects/programmes will be sent to the Technical Projects Subcommittee for further scrutiny and then to the Political Projects Subcommittee (the three heads of the federations and the two religious leaders) for final approval.

The DBSA must then go to that particular community or NGO and do a pre-feasibility study i.e. access the risks upfront and an environmental and social assessment, where appropriate, and together with the community finalise the project proposal.

Signing of contracts

Then DBSA will then sign contracts with the project managers, performance contracts, and disbursement contracts. To minimise pilferage, DBSA should disburse the money in trenches, on completion of major tasks/milestones. These Project Reports will be forwarded to the Technical Projects Subcommittee. After evaluation the Technical Projects Subcommittee will make recommendations to the Political Projects Subcommittee regarding the transfer of funds. Project money will be forwarded to the DBSA on request, also in tranches from Standard Bank/Sanlam.

Project monitoring and surveillance

DBSA will monitor all projects/programmes and send regular written reports to the JCT. Monitoring involves continuous assessment in relation to time frames and project objectives. Monitoring also includes DBSA ensuring capacity building or whatever remedial action necessary wherever & whenever appropriate.

Project Disbursement Management

This function essentially entails:

• Establishing financial procedures and systems for draw downs;
• Payment to project beneficiaries or implementers;
• Maintenance of Database.

  Evaluation

DBSA will evaluate the projects for impact, on completion, and then one year after completion. This will feed back on future initiatives, allowing the JCT to learn from experience.

Cost recovery issues

Though the payment for services to be rendered by the bank to the trust is still being negotiated, it seems likely that it will be on a cost recovery basis with an upper ceiling placed on how much the Trust can pay towards administrative expenses. The bulk of the funds should be dedicated to the original intention i.e. job creation and not eaten up by administrative expenses.

Organisational arrangement within DBSA

Essentially, the bank has envisaged the appointment of three regional co-ordinators to coincide with the current operations regions. These Regional Co-ordinators are expected to devote about 30% of their time to the Trust. A Programme Manager, who is likely to devote at least 50% of the time, will do the overall management of this programme.

The Programme Manager and the Team of Programme Regional Co-ordinators will occasionally use other specialist and programme managers in their regions for the purpose of appraising the projects. Overall managerial responsibility of this programme will be with Operations Secretariat.

Submit your application now !

Proper structures are now in place for implementation and the public is requested to submit a one-page job creation concept proposal. This concept document should have a contact address including telephone numbers, what the initiative is/will be and an estimated number of new jobs to be created. The job creation fund supports1 projects which:

• Are co-operatives;
• Improve the social infrastructure (e.g. building of community halls; creches, clinics, etc);
• rehabilitate natural resources in public ownership e.g. spring protection;
• Upgrade and maintain public productive infrastructure (e.g. footpaths and trails in national parks and game reserves; soil conservation
• Are labour intensive (Rand per person employed per month is high) i.e. have evidence of job creation.
• Have a multiplier effect, are viable and sustainable. The JCT targets the following groups and areas in its funding priorities:
• Reskilling programmes and literacy programmes for the retrenched thus enabling them to rejoin the labour market.
• Women: at least 50% of all the beneficiaries would be women. "Beneficiaries" mean those who will find employment in those projects).
• Rural Poor: community capacity building and job creation projects located in rural areas.
• Youth: infrastructural projects, training in rural areas done by and for the youth.

Each of the job projects that is the recipient of JCT funds must contain, as an integral part of its primary programme, an Aids / HIV education programme. The recipient organisation must have democratic structures and preferably have a good implementation track record in job creation and community empowerment. All provinces shall be represented - if not equally then equitably.

Further inquiries can be directed to Nonhlanhla Ngwenya, Anna Twala and Josephiulda Nhlapo-Hlope at Tel: 011 339 - 4911. The one page concept documents should be sent by 30 November 2000 to: