National Department of Tourism Strategic and Annual Performance Plans 2015/16

Tourism

27 March 2015
Chairperson: Ms B Ngcobo (ANC)
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Meeting Summary

The National Department of Tourism (NDT) briefed the Committee on its Strategic Plan and Annual Performance Plan 2015/16 - 2019/20. In attendance was Deputy Minister Tokozile Xasa. She extended the apologies of the Minister of Tourism, Mr Derek Hanekom, who was unable to attend the meeting. Prior to the actual briefing the Committee was given insight into figures for the 2013 Tourism Satellite Account that had been released the previous day. The tourism sector in SA directly contributed approximately R103 million or 2.9% towards the Gross Domestic Product of SA. Even though tourist arrival figures were up there was a decline in arrival figures from countries such as China, India and Brazil, which was a concern. The reason behind the decline could be anything ranging from the outbreak of Ebola in parts of Africa to policy and regulatory issues like the visa regulations that had been a major discussion point recently. The tourism sector in SA directly employed 655 609 people or 4.4% of SA’s total labour force. Inbound visitors spent over R94m within the South African economy. South African visitors spent over R124m within the South African economy and approximately R63m in other economies. SA had a positive tourism trade balance of over R31m with the rest of the world.

The briefing kicked off with an overview on the plan of the NDT leading up to the National Development Plan’s 2030 vision. It set out what the NDT wished to do over the next five years.  The legislative and policy mandate of the NDT as well as some of the NDT’s planned policy initiatives were outlined. The NDT’s departmental goals and its strategic objectives were also highlighted. The Committee was additionally provided with a breakdown of organisational risks that had emerged in the NDT’s Programmes. For example in Programme 2: Policy and Knowledge Services, non-compliance with responsible tourism standards was identified as an organisational risk. One of the mitigating factors relating to the risk was that the NDT had to identify policy and legislative impediments and to develop appropriate interventions.

An analysis of the NDT’s Medium Term Expenditure Framework (MTEF) budget had shown an increase from roughly R1.2bn in 2011/12 to R2.1bn in 2017/18. Estimates of expenditure for the NDT in total for the MTEF were R1.8bn in 2015/16, R2.05bn in 2016/17 and R2.1bn in 2017/18. Figures were also provided as per breakdown per Programme and as per economic classification.

Programme 1: Administration

The purpose of the Programme was to provide strategic governance and risk management, legal and corporate affairs, information technology, financial and supply chain management, internal audit and strategic communications support service to the NDT. A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set to achieve the goal was to ensure economic, efficient and effective use of the NDT’s resources. One of the performance indicators used was to have a number of documents developed and implemented. The baseline used was to review the Strategic Plan and the Annual Performance Plan for 2015/16. Hence the medium term targets for 2015/16, 2016/17 and 2017/18 were to review the Strategic Plan and Annual Performance Plan for the respective financial years.

Programme 2: Policy and Knowledge Services

The purpose of the Programme was to support sector policy development and evaluation, research and knowledge management, and the promotion of transformation and responsible tourism.  A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set was to enhance understanding and awareness about the value of tourism and its opportunities. A performance indicator chosen was to have a number of platforms facilitated to improve tourism sector stakeholder engagement and to have the National Tourism Sector Strategy (NTSS) implemented. No baseline was used but medium term targets for 2015/16, 2016/17 and 2017/18 were to have within each financial year two national tourism stakeholder forum meetings.

Programme 3: International Tourism

The purpose of the Programme was to provide strategic policy direction for the development of SA’s tourism potential throughout various regions of the world. A strategic outcome orientated goal was to increase the tourism sector’s contribution to inclusive economic growth.  A strategic objective set was to facilitate tourism capacity building programmes. One of the performance indicators used was to have a number of initiatives facilitated to support South African missions in developing tourism. The baseline used was to have two initiatives to support South African missions abroad. The first was the provision of marketing collateral in foreign languages and the second was to have capacity building on tourism functions as part of economic diplomacy training for South African missions. The medium term targets were in 2015/16 to have one initiative facilitated to have a capacity building programme for South African missions abroad and in 2016/17 and 2017/18 respectively the targets were to have two initiatives facilitated to support South African missions.

Programme 4: Domestic Tourism

The purpose of the Programme was to provide strategic policy direction for the development and growth of sustainable domestic tourism throughout SA. A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set was to enhance understanding and awareness of the value of tourism and its opportunities. A performance indicator used was the number of programmes coordinated to inculcate the culture of travel amongst South Africans. The baseline used was the 2014 countrywide Tourism Month Programme. Medium term targets for 2015/16, 2016/17 and 2017/18 respectively were to have a Tourism Month Programme for each financial year.

The Committee felt that the briefing had lacked detail regarding the efforts of the NDT. Members questioned whether the NDT did impact assessments of its efforts, especially its efforts at local government level. Was value for money obtained? Members also felt that monitoring and evaluation by the NDT needed to be done. On international tourism it was felt that the NDT needed to work hand in hand with SA Tourism and the Department of International Relations and Cooperation to prevent a duplication of activities. Duplication should be prevented at all costs as a huge chunk of the NDT’s budget was allocated to SA Tourism. The Committee felt that the NDT should monitor SA Tourism more closely. Members asked what informed the decision of the NDT to focus its efforts on certain heritage sites such as Robben Island and not others. It was asked whether the NDT had taken the Freedom Charter into consideration in doing its work given that President Jacob Zuma had emphasised its importance for 2015. Concerns were raised that the briefing had been silent on the oceans economy and cruise tourism and the opportunities that it could have for tourism in SA. Concern was expressed over the decline in arrival figures recently from SA’s BRICS partner countries like China, India and Brazil. What was the reason for the decline and could the losses to SA be quantified. It was felt that greater effort should be put into domestic tourism, as there had been a decline in figures over the past few years. Domestic travel needed to be affordable and there was a need for budget resorts for locals. There was disappointment that the NDT had failed to meet its full time equivalent jobs figures on its Social Responsibility Implementation (SRI) projects. Why was there no policy initiatives planned for the International Tourism and the Domestic Tourism Programmes? 

Meeting report

National Department of Tourism (NDT)
The NDT briefed the Committee on its Strategic Plan and Annual Performance Plan 2015/16 to 2019/20. The delegation comprised of Deputy Minister Tokozile Xasa, Mr Victor Tharage Acting Director General; Ms Morongoe Ramphele, Deputy Director General: Domestic Tourism Management; Ms Aneme Malan Deputy Director General: International Tourism Management; Mr Dirk van Schalkwyk, Chief Operating Office; Mr Ralph Ackerman, Chief Financial Officer; Ms Nomzamo Bhengu, Chief Director: Governance Support; and Ms Petra van Niekerk, Parliamentary Liaison Officer: Office of the Director General.

Deputy Minister Xasa extended the apologies of the Minister of Tourism, Mr Derek Hanekom, who was unable to attend the meeting. Tourism was a growth sector that had the potential to create jobs. Inclusive sector growth was needed. The Director General of the NDT, Mr Kingsley Makhubela, was on leave until the expiration of his contract. Mr Victor Tharage was filling the position of Acting Director General and would provide the Committee with figures on tourism statistics and progress that had become available the previous day.
 
Mr Tharage spoke to figures of the 2013 Tourism Satellite Account that had been released the previous day. The tourism sector in SA directly contributed approximately R103m or 2.9% towards the Gross Domestic Product of SA. Even though tourist arrival figures were up there was a decline in arrival figures from countries like China, India and Brazil, which was a concern. The reason behind the decline could be anything ranging from the outbreak of Ebola in parts of Africa to policy and regulatory issues like the visa regulations that had been a major discussion point recently. The tourism sector in SA directly employed 655 609 people or 4.4% of SA’s total labour force. Inbound visitors spent over R94m within the South African economy. South African visitors spent over R124m within the South African economy, and spent approximately R63m in other economies. SA had a positive tourism trade balance of over R31m with the rest of the world. The briefing itself would cover the objectives, risks and resources of the NDT. The Committee would be given insight into trends in the tourism sector and how the NDT’s budget had changed.

Ms Bhengu provided a visual overview of the plan of the NDT leading up to the National Development Plan’s 2030 vision. It set out what the NDT wished to do over the next five years. She also touched on the vision and mission of the NDT to which minor editorial changes had been effected.   She outlined the legislative and policy mandate of the NDT as well as some of the NDT’s planned policy initiatives. She furthermore elaborated upon the NDT’s departmental goals and its strategic objectives. The Committee was provided with a breakdown of organisational risks that had emerged in the NDT’s Programmes. For example in Programme 2: Policy and Knowledge Services non-compliance with responsible tourism standards was identified as an organisational risk. One of the mitigating factors relating to the risk was that the NDT had to identify policy and legislative impediments and to develop appropriate interventions.
 
Mr Ackerman continued with specifics on the NDT’s budget. An analysis of the NDT’s Medium Term Expenditure Framework (MTEF) budget had shown an increase from roughly R1.2bn in 2011/12 to R2.1bn in 2017/18. Estimates of expenditure for the NDT in total for the MTEF were R1.8bn in 2015/16, R2.05bn in 2016/17 and R2.1bn in 2017/18. Figures were also provided as per breakdown per Programme and as per economic classification.

Programme 1: Administration
Mr van Schalkwyk spoke to the purpose of the Programme which was to provide strategic governance and risk management, legal and corporate affairs, information technology, financial and supply chain management, internal audit and strategic communications support service to the NDT. A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set to achieve the goal was to ensure economic, efficient and effective use of the NDT’s resources. One of the performance indicators used was to have a number of documents developed and implemented. The baseline set was to review the Strategic Plan and the Annual Performance Plan for 2015/16. Hence the medium term targets for 2015/16, 2016/17 and 2017/18 was to review the Strategic Plan and Annual Performance Plan for the respective financial years.

Programme 2: Policy and Knowledge Services
Mr Tharage stated that the purpose of the Programme was to support sector policy development and evaluation, research and knowledge management, and the promotion of transformation and responsible tourism.  A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set was to enhance understanding and awareness about the value of tourism and its opportunities. A performance indicator used was to have a number of platforms facilitated to improve tourism sector stakeholder engagement and to have the National Tourism Sector Strategy (NTSS) implemented. No baseline was set but medium term targets for 2015/16, 2016/17 and 2017/18 were to have within each financial year two national tourism stakeholder forum meetings.

Programme 3: International Tourism
Ms Malan explained that the purpose of the Programme was to provide strategic policy direction for the development of SA’s tourism potential throughout various regions of the world. A strategic outcome orientated goal was to increase the tourism sector’s contribution to inclusive economic growth.  A strategic objective set was to facilitate tourism capacity building programmes. One of the performance indicators used was to have a number of initiatives facilitated to support South African missions in developing tourism. The baseline set was to have two initiatives to support South African missions abroad. The first was the provision of marketing collateral in foreign languages and the second was to have capacity building on tourism functions as part of economic diplomacy training for South African missions. The medium term targets were in 2015/16 to have one initiative facilitated to have a capacity building programme for South African missions abroad and in 2016/17 and 2017/18 the targets were respectively to have two initiatives facilitated to support South African missions.

Programme 4: Domestic Tourism
Ms Ramphele noted that the purpose of the Programme was to provide strategic policy direction for the development and growth of sustainable domestic tourism throughout SA. A strategic outcome orientated goal was to achieve good corporate and cooperative governance. A strategic objective set was to enhance understanding and awareness of the value of tourism and its opportunities. A performance indicator used was the number of programmes coordinated to inculcate the culture of travel amongst South Africans. The baseline used was the 2014 countrywide Tourism Month Programme. Medium term targets for 2015/16, 2016/17 and 2017/18 respectively were to have a Tourism Month Programme for each financial year.

Discussion
Ms E Masehela (ANC) referred to page 13 of the briefing document and spoke to the Medium Term Expenditure Framework (MTEF) baselines on the page; the figures did not show where the NDT was coming from. The starting point should be a baseline amount for 2014/15. Much of the NDT’s budget was allocated towards transfers, how did the NDT do its transfers? Many entities of government departments often complained that they received their funds late. On page 28 mention was made that agreements with law enforcement agencies were being entered into, were there currently no such agreements? The Committee would have like to see an organogram of the staff complement of the NDT, and demographics on women and disabled persons in the NDT would have been useful. She pointed out that municipalities found it difficult to calculate Full Time Equivalent (FTE) jobs.

Mr Ackerman said that the NDT could include in the MTEF figures baselines. SA Tourism had to provide the NDT with its cash flow requirements for its financial year; it formed part of the NDT’s cash flow. National Treasury had to give its approval. Quarterly assessments of SA Tourism were done by the NDT to monitor its performance.

Ms Ramphele stated that the Department of Public Works (DPW) did the calculations for full time equivalent jobs. The DPW should assist municipalities.

Mr Tharage said demographic representativity of the NDT would be provided to the Committee.

Ms P Adams (ANC) noted that National Treasury set out the criteria in terms of how strategic plans and annual performance plans should be compiled. It should be done in terms of the SMART Principle. It should be SMART (specific, measurable, assignable, realistic and time bound). The Strategic Plan lacked detail. If six municipalities were to be engaged by the NDT the committee should be given details of who they were, where they were and why they had been chosen. She referred to the page 55 and asked in relation to domestic tourism efforts that if 100 rural enterprises were to be supported for development what would the impact be on the communities involved. In its choice of rural enterprises did the NDT engage with traditional leaders and councillors etc? It had to be remembered that tourism was a concurrent function and that the NDT should not move into the competence of local government. She felt that workshops given did not hold value unless assessments were done. She asked whether the NDT received value for money in the workshops that it provided. Money was being poured into a bottomless pit at local government level. There was a need for monitoring and evaluation. Jobs needed to be created to eradicate poverty.  On international tourism in its efforts to support South African missions abroad, was it not a duplication of activities of SA Tourism? Should the NDT not be working with SA Tourism and the Department of International Relations and Cooperation over the issue? How was the United Nations World Tourism Organisation (UNWTO) used to enhance international and domestic travel?
Speaking to the Policy Knowledge and Services Programme and referring to page 43, she asked regarding the NDT’s efforts on world heritage sites what informed the NDT’s choice of focusing on Robben Island and Vredefort Dome. What was the NDT’s relationship with the Department of Arts and Culture and if there was a relationship how close was it. On destination development she asked why the NDT concentrated on the Walter Sisulu Botanical Gardens. It was stated on page 42 that the NDT was engaging in capacity building workshops at local government level, however no information was provided on whether assessments and monitoring and evaluation were being done. She reiterated the importance of assessments, which would identify challenges.

Mr Tharage responded that the NDT had tried to provide as much detail as it could in its briefing document. On the choice of focus on Robben Island and Vredefort Dome relating to tourist guides, Robben Island was the main tourism magnet in SA. The intention was to focus on tourism magnets. There were three categories of focus ie world heritage sites, national parks and botanical gardens. Vredefort Dome was also a popular attraction. The NDT had seen an opportunity to bring in the element of transformation in the training of tourist guides. It was found that current guides only had general knowledge; there was a need for guides to have specialised knowledge. The idea was to have an immediate impact hence the focus on these heritage sites. He agreed that municipalities had challenges of capacity. The efforts that the NDT was engaged in took on board the Department of Cooperative Governance and Traditional Affairs (COGTA), the South African Local Government Association (SALGA), the NDT and municipalities themselves. Ways were looked at as to how municipalities could work together with the tourism value chain in a particular area. The impact that the NDT’s efforts were having would be visible in the future. There had been pilot projects and lessons had been learnt. Discussions were ongoing. The NDT did have formal relationships with government departments like the DAC and memorandums of understanding were in place. There were bilaterals at political and official levels.  Robben Island was being discussed with the DAC. There were good working relationships. A daily good working relationship with the South African Police Services (SAPS) was also in place. The NDT furthermore also had a working relationship with the Cross Border Road Transport Regulator. The NDT heeded the comments by Members that it needed to evaluate the impact that it was making but it had to deal with budgetary constraints. In 2016 the NDT intended to evaluate completed SRI projects.  There was no duplication of work between the NDT and SA Tourism. The work each did was complementary. SA Tourism could not do pure international relations work. SA Tourism had a pure marketing function. For example SA Tourism could not do bilateral work.

Ms Ramphele explained that the NDT did have a needs assessment of municipalities that applied to all projects in a locality. A project had to be accounted for in the municipality’s Integrated Development Plan (IDP). Capacity building had to change mindsets. On the N12 Treasure Route Project the NDT had associations with the Maluti Drakensberg authorities and with the Kingdom of Lesotho. There were 44 municipalities along the Route. 

Ms Malan on the training of missions’ staff abroad, stated that training was provided by the NDT in collaboration with SA Tourism. The NDT and SA Tourism had different roles to play in the training. The NDT took lead in training. The Tourism Business Council of SA (TBCSA) also brought the private sector perspective to the table. The NDT focused on the development side of things whilst SA Tourism focussed on the marketing side. There was hence no duplication. The modules of training differed in relation to the types of recipients of the training. The Department of International Relations and Cooperation (DIRCO) was also taken on board. The NDT worked with all missions consequently no specific missions were mentioned in the briefing. Marketing collateral was being distributed to all missions. On monitoring, the NDT had done a quick survey of missions to check on the value of marketing collateral done. The NDT worked with the DIRCO and missions on better sharing of information. The NDT had a list of benefits relating to the UNWTO. Some of the benefits were access to information, participation in new institutions and continuous skills development opportunities.  

Deputy Minister Xasa added that the NDT did have a monitoring and evaluation unit.

Ms S Xego-Sovita (ANC) noted that President Zuma had stated that 2015 was the year of the Freedom Charter. Did the strategic objectives of the NDT take that into account? The tourism sector had been monopolised for a very long time. She asked whether the Tourism Incentive Programme (TIP) would also be doing marketing that was to be the domain of SA Tourism. SA Tourism received a huge chunk of the NDT‘s budget. Were the 3008 equivalent jobs to be created Tourism Enterprise Partnership (TEP) or NDT jobs? On the facilitation of capacity building programmes for policy makers at local government level by the NDT, would it not be a duplication considering that local government had its own programmes. What were the benefits of the TIP? Why was an allocation received by SA Tourism been returned to the NDT? What had informed the decision to return the funds?

Mr Tharage said that the TIP guidelines would be released in April 2015. The NDT was trying to popularise the TIP. On workshops and road shows the NDT needed to reach out to communities. There was greater need to disseminate information.

Ms Ramphele explained that the 3008 jobs were only for the Expanded Public Works Programme. Jobs created by the Tourism Enterprise Partnership were separate.

Deputy Minister Xasa, on the issue of the Freedom Charter, said that the NDT was looking at programmes to cover issues of ownership and that women should form part of management.

Mr J Vos (DA) noted that President Zuma in his State of the Nation Address (SONA) had stated that efforts were going to be made to open up the oceans economy. The briefing was silent on the oceans economy as well as on cruise tourism. Deputy Minister Xasa had mentioned that the Director General of the NDT was to be on leave until the expiration of his employment contract. He asked for an explanation and how the NDT envisaged filling the post. He was concerned that arrival figures from the Brazil, Russia, India, China and SA (BRICS) bloc countries were low. He suggested that the NDT with the cooperation of partners like the Tourism Business Council of SA (TBCSA) try to quantify the losses to SA. What were the efforts of the NDT to focus on SA’s BRICS partners and to strengthen the partnership? On domestic tourism he felt that there should be a concerted effort to increase domestic revenue and domestic trips. There had been a decline in domestic tourism over the last few years. Social Responsibility Implementation (SRI) projects had the ability to make communities work again.  He was disappointed that the NDT had failed to meet its full time equivalent jobs figures on its SRI projects. Where did things go wrong? Capacity needed to be provided to beneficiaries. Domestic Tourism was supposed to be a major driver in the tourism sector. He referred to page 7 and asked why there were no policy initiatives planned for the International Tourism Management and Domestic Tourism Management Programmes of the NDT. On page 10 he asked whether domestic travellers had been considered as a new source market. Domestic travel also had to be affordable and the creation of budget resorts was considered important. He referred to page 31 which stated that research was planned for domestic tourism in terms of looking at the needs of the domestic tourist. What was the desired income? He asked what the timeline for the research was. What happened if research revealed that there was a policy initiative needed for domestic tourism when the NDT had none planned? Lack of capacity was one of the major challenges that local governments were facing and as a result tourism at local level was suffering. There needed to be serious intervention by the NDT at local government level. Tourism bureaus at local government level were under efficient. Tourism bureaus could play an essential role to market local products and towns. Tourism bureaus should be better funded. Was there something that that the NDT could do to champion tourism bureaus and perhaps to capacitate them better. Cooperation was needed from provinces and local government. The NDT should also do work on route development such as the Nelson Mandela Route. Tourism bureaus could also assist with route development.

Ms Ramphele explained that the failure of the NDT in meeting its target for FTE jobs was due to the fact that it could not access the incentive for the Expanded Public Works Programme (EPWP). The NDT had requested that the labour incentive be reduced and consequently there were less FTE jobs. If most of the funds for projects went towards wages then infrastructure suffered as a result. The NDT also struggled to obtain service providers in provinces like Limpopo and the Free State.
On domestic tourism, programmes needed to be put in place. The NDT in conjunction with the Industrial Development Corporation (IDC) did a study on the affordability issue of people. People also lacked information on places that they could visit locally. The NDT had requested provinces and municipalities to provide the NDT with lists of tourism properties that were being under utilised. The NDT through its SRI projects was assisting municipalities to revamp tourist facilities. On the issue of affordability the NDT had also engaged South African National Parks (SANParks) on discounts that could be given. Engagement with the Department of Basic Education had also taken place to try to encourage travel from a young age. From a private sector perspective the Federated Hospitality Association of SA (FEDHASA) had also been engaged over encouraging South Africans to travel. On the concern raised that there were no policy initiatives in the pipeline she responded that there was an MOU with the Department of Basic Education.

Deputy Minister Xasa stated that tourism was a proper profession. More learners were entering the realm of tourism. Even educators were being empowered to teach tourism. On the issue of the Director General of the NDT, Mr Makhubela, being on leave up until the expiration of his employment contract she stated that there were processes running its course. The Director General’s term was due to end on the 31 May 2015. Mr Makhubela had been unwell for a while and was placed on special leave until the expiration of his contract. His employment contract would not be renewed. These were issues of governance that could not be divulged. There were lessons learnt from SRI projects. A report on SRI projects would be provided to the Committee.

Ms Malan spoke to the issue of BRICS and said that there were MOUs in place with the respective countries. There had been MOUs with Russia and India and not too long ago MOUs with Brazil and China had also been concluded. SA had tourism offices in all the BRICS countries with the exception of Russia. She noted that Russia was a difficult market to work in. The profile of tourism had been uplifted within the BRICS setting. She added that the TIP would come aboard in areas where SAT was not focused.

Mr Tharage on the issue of oceans economy said that the NDT was engaging in discussions on blue flag beaches. The NDT’s interpretation of the oceans economy was broad. Some activities taking place were shark cage diving and fly-fishing. There were many other activities. Cruise ship tourism was a challenge to the NDT; work in the realm of policy was needed regarding cruise ship tourism. Even the USA was grappling with the issue. Some of the problem areas were registration status, taxes and local employment. The NDT needed to consider cruise tourism from a policy perspective.

The Chairperson noted that the NDT provided a great deal of training, workshops and roadshows, which cost a great deal of money. Did all these activities have an impact? Was there value for money? The NDT needed to monitor SA Tourism better as a major part of its budget was allocated to them. Tourism needed to become a profession of choice. The NDT needed to collaborate with the Department of Cooperative Governance and Traditional Affairs (COGTA) and the Department of Arts, Culture (DAC) and even the Department of Energy to deal with defunct national parks.  Had the NDT looked at the impact that the TEP had made. Was there value for money? Had the NDT evaluated the 350 Small Medium and Micro Enterprises (SMMEs) that the TEP had assisted?

Ms Ramphele, on whether the NDT was getting value for money from the TEP, explained that the TEP had commissioned a study on the impact of its own work.  From the NDT’s side it scrutinised the TEP’s reports. As of the 2014/15 financial year the TEP only provided the NDT with audited reports.

Deputy Minister Xasa noted that the NDT was gradually doing assessments. The NDT was conducting an overall study on what it could do for SMMEs and not only those assisted by the TEP.

The Chairperson requested that the NDT provide the Committee with quarterly reports. The NDT had areas of under spending which the Committee wished to look at.

Committee Minutes
Committee Minutes dated the 20 March 2015 were adopted without amendment.

The meeting was adjourned.
 

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