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‘Retirement’ for Redisa

There is another state capture happening in South Africa, but this time the state is doing the capturing. The prize is close to R600 million a year in tyre levies, which had up to February flowed into Redisa ’s coffers.

Redisa is officially known as the Recycling and Economic Development Initiative of South Africa. This private company has set itself the Herculean task of establishing a greener form of consumerism in South Africa, also called a circular economy. The aims of a circular economy are to make new things with materials that can be recycled and then enable groups to profit from recycling these things.

The problem is that our current consumer model demands that people throw away stuff. To change the ingrained habits of both sellers and buyers requires help from government. When Redisa pitched the circular economy concept in 2012, it promised to turn waste into worth and create 10 000 jobs by the end of 2018. All government needed to do was to legislate a levy on tyres to fund this project.

Redisa tyres

Redisa likes to call this a ‘self-funding’ model, but consumers call it just another form of taxation – a tax that government last year realised it was seeing nothing of. Hence the then Finance Minister (Pravin Gordhan at that stage) announced in his 2016 February Budget speech that the government will in future take all the tax on tyres, ‘thank you very much’.

Redisa likes to call this a ‘self-funding’ model, but consumers call it just another form of taxation

That was the first part of the state capture of the tyre levy. The second part came in April last year, when the Department of Environmental Affairs announced it would

investigate if Redisa has prudently spent the R1,1 billion it had received up to then. It did not help that Redisa invested in an R18 million rand office while paying pickers only R2 a tyre, which is 20 cents more than what the pickers would get for the scrap metal inside a burned tyre.

Fast forward to June, and Redisa announced it had ceased tyre collections and would have to dissolve the initiative if government continued to hold on to its tyre levy.

Should we care that the tyre levy is now going to the government instead of some private company?

Absolutely, for the same government last year ‘irregularly’ spent (read stole or wasted) R500 million per hour of each day. No responsible citizen should allow funds that is delivering on its aims, albeit slowly, to go into the same deep dark hole as the plastic bag levy and the fuel levy.

Compared to government’s audited hourly theft, Redisa received clean audits from KPMG and it has made no secret that 18% of the levy flows from Redisa to Kasuga Taka Consulting, a management company in which Redisa directors are also members.

This 18% slice of the pie may be what is really at stake in this particular state capture, as one does not need major counting abilities to grasp that R2,30 per kilogramme on every tyre sold in South Africa quickly adds up.

Redisa is currently appealing in court against this state’s capture of the tyre levy, but they are wasting their effort. As toll-opposers Outa learned, one needs deep pockets to enter into ‘lawfare’ with government.

While that 18% consultancy fee did reroute hundreds of millions to Kasuga Taka’s account instead of, say, to pay tyre pickers more than R2 a tyre, this consultancy consultancy would be well advised to cut their losses and use their fee to implement a circular economy in industries that can use recycling to save on raw materials.

SA Breweries will save an appreciable percentage of its operating costs if it recycles all its glass bottles. All it needs is for a group like Redisa to make it worthwhile for people to run collection systems.

Can we as citizens stop government from running off with yet another hefty slice of our income? The best opportunity is in 2019, when we get to vote in a general election.

Organisations like Redisa, the Automobile Association and big fleets can also force government to ‘put a ring on it’ by ring-fencing the various levies charged on plastics, tyres and fuel, and then monitoring the money flow to ensure recycling happens in these sectors.

Rubber crumb from old tyres makes a shock-absorbing filler for any size pothole, to cite just one example of how this can work in a circular economy.

Such active citizenry is how South Africa can become a country in which waste really has worth. Meanwhile, all tyre shops and people affected by this state capture can contact the Waste Management Bureau at the Department of Environmental Affairs at 012 399 9803 for further information on legally disposing of waste tyres, or the Environmental Affair’s call centre at 086 111 2468.

(Good luck getting through though, as this writer can attest!)

By Alwyn Viljoen


Tristan Wiggill
Special Features Editor at Business Fleet Africa