One-Stop Border Post between South Africa & Mozambique: SARS & Department of Home Affairs briefing

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Finance Standing Committee

12 June 2012
Chairperson: Mr T Mufamadi (ANC)
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Meeting Summary

The South African Revenue Service (SARS), which currently chaired the Border Control Operational Coordinating Committee (BCOCC), and the Department of Home Affairs briefed Members on the bilateral legal framework between South Africa and Mozambique to establish a combined border control post (one stop border post or OSBP) between the two countries. SARS provided clarity on the ratification and legislative requirements and sought to obtain feedback and in principle approval from Members to allow the commencement of signing the annexes. The agreement itself had already been signed.

Delays at border posts not only increased the direct costs for all stakeholders but obstructed the opportunities for growth and development, most especially for small businesses. Local markets were often small, particularly in developing economies, and trade provided potential for greater outputs at lower costs. Trade also allowed developing countries to become part of the global supply chain. A World Bank study estimated that cutting the days needed to clear exports by half could enable a small or medium sized enterprise to increase its share of exports in total sales from 1.6% to 4.5%. Another study carried out in sub-Saharan Africa showed that reducing inland travel times by one day would lead to almost a 7% increase in exports. These were evidence-based statistics to show that improving efficiency at the ports of entry could have some really beneficial economic spin-offs. In Africa alone there were currently four one stop border posts. These were either operational or in pilot stages. There were 55 other initiatives which were in different stages of planning. Having one facility shared by the officials of the two countries could significantly reduce the cost of establishing and maintaining border facilities. By working closely together, border management officials from both countries were able to capitalise on other important aspects of border management efficiency, including on process flows and sharing of data, including sharing of intelligence. There were, of course, challenges, such as the complexity of the international legal frameworks required to allow for the sovereign laws of each state to be implemented between the other state's territory. Having the two countries agree on an overarching legal framework was just the precursor to a process of revising individual pieces of legislation.

The Department of Home Affairs (DHA), whose Director-General was Chairperson of the Inter-Agency Clearing Forum (IACF), said that currently, there were nine primary agencies involved with border post management on the South African side of the border alone. Each agency had its own mandate and legislative framework. The Department indicated the role of the various departments within the border processes. It was the responsibility of the South African National Defence Force (SANDF) to guard the borderline. The SANDF had no powers of arrest, hence the role of the SAPS was crucial. The State Security Agency had to provide intelligence information to the stakeholders at the port of entry. At the border post itself, the primary department was Home Affairs, which was responsible for facilitating the movement of the people. However, SARS was responsible for customs. The secondary departments included the Department of International Relations and Cooperation (DIRCO), the Department of Health (DoH),the Department of Agriculture, Forestry and Fisheries (DAFF), and the South African Reserve Bank (SARB). Immigration and customs procedures required a careful balance between the needs of security and the facilitation of the movement of goods and people. The prevention of the illicit movement of goods and people was carried out jointly by Home Affairs, SARS, and SAPS, with critical input from the State Security Agency. The DAFF and the DoH carried out border control functions to prevent cross-border transmission of diseases. The Department of Transport (DoT) had an important role to play in regulating the movement of cross-border transport. The Department of Public Works (DPW) provided facilities and maintenance. Coordinating this in one country between members of one administration was challenging enough, but additional challenges were a second country, international law and different languages.

SARS noted that location of the border posts was not always conducive to collocation in a single facility. The Lebombo/Ressano Garcia location was a good example of uncooperative typography. The planning teams from both countries had come up with a novel solution by moving the processing of cargo from the congested border post to a facility separate from facilities for pedestrians and cars, buses and taxis. Each of these facilities would be staffed by officials from both countries to provide a single border clearance service for travellers and travellers. This design had led to the unintended, positive consequences of segmenting the different categories of travellers, each with a different risk that allowed for specialisation of processes and resources at each point.

SARS explained the legislative progress thus far in this exciting project. Mozambique was keen to accelerate the process, as its parliament had ratified the agreement in 2007. Three annexes to the agreement had been drafted. The first provided a methodology for designating and delimiting all areas. The second annexe allowed for the joint control and management of border facilities and clarified the exercise of authority and power in this area. The third annexe dealt with the ownership, management and maintenance of shared infrastructure. The text of these annexes had been agreed to at an official level in both countries. Members’ support was asked for parliamentary ratification. The process of amending the relevant legislation to incorporate this agreement into domestic law would follow after ratification. Progress on physical infrastructure was described. For the first time, the departments concerned were realising 'cluster budgeting'. Progress on operational readiness was described. There was planning to exchange data with Mozambique by way of systems connectivity. SARS was confident that, with Members' support, it would be possible to go ahead with the signing and ratification of the agreement and annexes by the final quarter of this year. It was then necessary to develop the integrated processes of the various departments, including the corresponding departments of the Mozambique government, and to ensure that all personnel were adequately trained for the implementation. The agreement fell within the ambit of Section 231(2) of the Constitution and would, after signature, require formal ratification by Parliament and incorporation into South African domestic law of before the framework could take effect.

The Chairperson noted that this was the first bilateral agreement in which the parliamentary committees had been involved from the onset. ANC Members asked if the road was fenced between the customs clearance area and the border, if the buses and taxis could be cleared in one area too, sought clarity on the budget in as much as there were interdepartmental agreements, asked what the specific budget for the infrastructure plans was, what the cost of the whole project was, from where the money was sourced, when all the infrastructure would be complete, when revenue would begin to be collected, asked about the broader funding model, what the employment possibilities as a result of this initiative were, what the opportunities in terms of procurement of services were, to what extent South Africans benefiting were benefiting, if South Africa's approach was an optimal one, as Mozambique had finished its part of the process in 2007, asked about the role of local government on both sides in terms of rendering of services, what the impact of this project was in contributing to job creation now and for the future, how the clustered budgeting would work, if there was a certain percentage coupled to it, and with whom the buck would stop. A DA Member saw the one stop border post as a very positive development, and was also pleased with the consideration for small business. As a reduction in direct costs, it was a step in the right direction. He asked for more details on the financial implication of two separate sovereign countries sharing some of the income and on the involvement of the SARB in the movement of money. He was worried that a concern similar to that of two years ago concerning value added tax (VAT) fraud might arise with the one stop border post and asked if the correct methodologies would be used to ensure that South Africa got its fair share of revenue. A COPE Member asked if there were any examples from the four existing one stop border posts in Africa to show that the concept was working especially from a security point of view and preventing the illegal trade in ivory and rhino horn, and if long queues could be avoided at the bus facility.

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