Cuba/SA relations & implications of Cuba/USA developments; Pan African Parliament Construction Project

Meeting report

Mr S Mokgalapa (DA) brought up the saga of President Omar al-Bashir and the International Criminal Court (ICC) that had played itself out over the past couple of days. He suggested that the Minister brief the Committee on the matter.

South Africa-Cuba relations and latest developments on Cuba-US relations 
The political leadership of the Department of International Relations and Cooperation (DIRCO) as well as its Director General extended apologies for not being able to attend the meeting.

DIRCO briefed the Committee on South Africa-Cuba relations as well as on the latest developments on Cuba-US relations. The delegation comprised of Ms Yolisa Maya Deputy Director General: Americas - Europe and the Caribbean, Ms Thandiwe Fadane Chief Director: Latin Americas and Caribbean, Mr Lenin Shope, Chief Director: Africa Multilateral, Mr Caiphus Ramashau Chief Financial Officer (CFO), Ms Bernice Africa Chief Director: Property Management and Mr Serake Matsebe Parliamentary Liaison Officer.

Ms Yolisa Maya Deputy Director General: Americas - Europe and the Caribbean said the strategic relationship shared between SA and Cuba dated back to the fight against Apartheid and Cuba’s commitment to help overthrow colonialism in Africa. Cuba’s selfless role in the liberation of SA was acknowledged. SA now needed an economic diplomatic strategy in Cuba. SA’s focus in Cuba had been too much on politics and solidarity. Other countries were taking advantage of economic opportunities in Cuba. However there were impediments to improved economic relations. Most significantly was the total economic blockade of Cuba by the USA and the extra-territorial application of the Helms-Burton Act. Further, the geographic distance between SA and Cuba was huge and what made matters worse was the lack of air transport and air cargo to Cuba. A further problem was export credit facilities.

US-Cuba relations had been frosty since the period of the Cold War and the imposition of the embargo in the 1960s. The current Pope who was of Latin origin and together with Canada began secret talks in 2013 to normalise US-Cuba relations. Eighteen months since the start of the talks, the Cubans released Alan Gross an American contractor arrested in Cuba for spying as well as other political prisoners. The USA released the last three of the Cuban Five as a reciprocal sign of goodwill. This marked a new political juncture in the relationship between Cuba and the USA and sparked the re-establishment of diplomatic relations after more than five decades of unilateral sanctions on Cuba. It had to be borne in mind that the embargo could only be lifted through the US Congress as the President of the USA no longer had the executive authority to repeal an Act of Congress. The re-establishment of diplomatic relations led to the re-establishment of limited economic ties and the possibility of developmental assistance from the USA and other financial institutions like the International Monetary Fund (IMF) and the World Bank. The USA regionally was isolated on the Cuba issue as Latin American countries were positioning themselves not to attend the next Summit of the Americas in Panama if Cuba was still excluded. Globally over the years there was almost a universal denunciation of the unilateral embargo on Cuba, with the exception of the USA, Israel and a few very small island states.

Some of the implications for SA were that no matter what, SA was moving ahead with economic relations with Cuba even if the Helms-Burton Act remained in place which could mean that South African businesses and banks ran the risk of US penalties. SA needed to identify products which had a competitive edge over those of the US, especially in agriculture. Cuba at present imported 80% of its food requirements implying a small industrial base. Cuba had to create jobs on a massive scale. Cuba’s 2013 imports were over $13bn. SA needed to come up with a basket of goods on offer to Cuba. Since 2012, SA had been unable to implement a much needed R350m economic assistance package to Cuba due to threats of sanctions from the US.

Mr Caiphus Ramashau, DIRCO CFO, pointed out that SA was ready to make its first payment to Cuba in the form of a R40m grant, the funds had been released. This was to be followed by an R100m grant. The remaining funds would be made available in the form of a credit line. The challenge was who was going to administer the credit line and DIRCO was trying to find an entity to administer this. It was considered work in progress as all legal requirements had to be adhered to.

Discussion
Mr B Radebe (ANC), who was elected as temporary acting chairperson for the first half of the meeting, pointed out the impact that non government organisations (NGOs) had in effecting change in the countries in which they found themselves. He remarked that President Putin of Russia felt that if an NGO was foreign funded then the NGO should be regarded as a foreign agent.

Mr S Mokgalapa (DA) said that DIRCO was doing good work on economic diplomacy. He hoped that in DIRCO’s follow up meetings with the Committee a report would be given on progress made. He felt that the Cuban trade fair to be held in November 2015 should have been led by SA and not the USA. SA focussed too much on politicsSnoopys@2 and too little on economics. He asked what the return on investment for SA was in return for the R350m that it was donating to Cuba. Where were the funds coming from? Was it coming from DIRCO or the African Renaissance Fund (ARF)? If R140m of the R350m was grants, was the remaining amount part of a credit facility being provided to Cuba? It seemed relations between Cuba and the rest of the world would remain frosty until the Helms-Burton Act was repealed. There was a double standard in that the USA was having a trade fair with Cuba whereas the Helms-Burton Act prevented other counties from trading with Cuba.

Mr Lenin Shope, Chief Director: Africa Multilateral, replied that the Cuban trade fair had been in place since 2002 and the USA was always dominant. SA had not been napping. Europe and Canada had also been trading with Cuba. It was difficult for SA to trade with Cuba. Trade had to be in US dollars which was a challenge. This was the manner in which the USA kept other countries from trading with Cuba. The grant funding that SA was providing to Cuba had already been factored into Cuba’s national budget. PetroSA had already tried the Cuban market ten years ago. A company by the name of Glencore wished to mine nickel in Cuba. Cuba had wished Glencore to complete the construction of a refinery that the Russians had built. Glencore chose to rather build a refinery in SA. It was clear that things between Cuba and SA had been happening for some time.

Mr Ramashau replied that the R350m package was designed in such a manner for SA to take business to Cuba. R100m came from the ARF via the Industrial Development Corporation (IDC). There was also R110m from the Department of Trade and Industry also via the IDC. The remaining amount was a credit line for Cuba after a 12 month period of revision. A challenge to DIRCO was that everything had to be done in US dollars. National Treasury was assisting DIRCO on the matter. The total grant funding amounted to R140m. The remaining R210m was a credit line for Cuba but it depended on how Cuba had utilised the grant funding.

Ms Maya emphasised that the USA was continually being engaged on the Helms-Burton Act. She agreed that there was a double standard. There were members of the US Congress that were not in agreement with the Act and saw the other side of the story.

Ms O Maxon (EFF) pointed out that Cuba was a socialist state but that during the dark days of Apartheid it was the friend of the freedom struggle. It was simply wrong that SA was being dictated to by the USA on how it should act towards Cuba.

Mr M Maila (ANC) noted those individuals in the USA who did not wish the trade embargo against Cuba to be lifted were the very ones making the policies of the USA. Did SA not see Cuba as a democratic state? He felt that the Helms-Burton Act was holding SA back. He applauded the people of Cuba for resisting the trade embargo for so many years.

Mr Ramashau explained that the USA wished to have a regime change in Cuba, hence all their efforts to keep the rest of the world out.
 
Ms Maya confirmed that SA did view Cuba as a democratic country.

Ms D Raphuti (ANC) felt that SA was moving at a snail’s pace on its economic relations with Cuba. SA’s Brazil, Russia, India, China and SA (BRICS) partners were way ahead of SA. She asked what advice DIRCO could give SA to better seize opportunities. She admired the Cubans for keeping their heads held high during the trade embargo.

Ms Maya pointed out that South Africans did not understand Cuba. People needed to be educated. Business and state owned entities needed to be mobilised. Perhaps entities like South African Airways (SAA) and its partners could approach Cuba about possible flight routes between the two countries.

Mr B Radebe (ANC) noted that the economic package to Cuba which DIRCO had spoken about had been passed by parliament in 2013. President Zuma had already promised the package to Cuba in 2010. SA was five years late in delivering. How could SA be dictated to by the USA? How were other countries dealing with the issue of land ownership along their coastlines? Land around SA’s coast was mostly owned by foreigners.

Mr M Masango (ANC) said that SA’s Freedom Charter spoke about peace and friendship. Friendship was not only informed by economic considerations. There were also geopolitical strategic considerations. Historically Cuba had always been supportive of SA’s struggle for freedom. In 1987 Cuba had deployed both military and medical personnel to Africa in its efforts to support democracy. Apartheid SA’s aggression had been stopped in Angola and Namibia. SA shared ideological and political similarities with Cuba.

Mr Shope explained that Cuba was demanding the closure of Guantanamo Bay. Cuba was additionally calling for the end of economic sanctions. It was furthermore claiming damages that should be payable to Cuba. He felt that it was unlikely that the USA was going to give up Guantanamo Bay. The economic blockade came into effect at the time when a socialist revolution and nationalisation was taking place in Cuba. The USA could intend to claim reimbursement for property that had been nationalised. The Helms-Burton Act had come into effect under President Clinton. The Act stripped the power from the President of the USA to lift the trade embargo. The embargo could henceforth only be lifted by an Act of the US Congress.

Ms Maya responded that SA had not taken care of its coastlines and its borders. SA’s coastline was almost 4000km long. Most of the coastline no longer belonged to SA anymore. There was a lot that needed to be done.

Mr Radebe said that the USA wished to block everyone out from Cuba. The currency swap offered by the BRICS countries would help. The grant funding to Cuba had advantages for SA. Seeds and other agricultural products would be sourced from SA. The USA agricultural sector was dominating Cuba.

Ms Maya stated that the Cuban Five had been released from imprisonment. The Cuban Five intended to visit SA and wished to meet up with the Committee.

Mr Masango pointed out that after the release of former President Mandela from prison, Cuba was the first country that he visited as he wished to personally thank Cuba for its assistance in freeing SA. SA was using various fora to exert pressure on the USA to lift the trade embargo, release the Cuban Five and for Cuba to be allowed to trade with other countries. The USA was even isolated by its own friends when it came to Cuba. The relations that Cuba and the USA were having at present were because of a deal which President Barack Obama and President Raoul Castro had entered into. The Cuban Five were travelling the world to thank all countries concerned for their support. They thus wished to thank the South African government, Parliament and other sectors for the contribution towards their release. The Cuban Five delegation was made up of fifteen individuals and would thank Parliament through this Committee.

Mr Radebe pointed out that in 2014 Parliament had take a unanimous decision that the Cuban Five should be released and that the blockade in Cuba should be lifted.

Mr Masango resumed his chairing duties.

Pan African Parliament Construction Project
Mr Caiphus Ramashau, DIRCO CFO, stated that the host agreement was still valid and had not lapsed or expired. In the agreement SA had committed itself to providing a dedicated, equipped and furnished permanent structure at its own expense to house the PAP complex. The agreement had been signed in 2004 but challenges surfaced in 2008 and 2009 regarding the land that had been identified for the PAP precinct. Environmental concerns had been raised about the land in question and matters were still not concluded. Gallagher Estate had hosted the PAP since 2004. There was no other option but to extend the lease agreement for a further five years from the 1 March 2015 to the 28 February 2020. The monthly rental was roughly R2.8m (including offices and parking) which was actually a 15% reduction from the previous rental of approximately R3.5m per month. DIRCO provided financial support for the services as agreed in the host agreement. Some insight was provided on the long term plan for securing permanent accommodation. Given the present fiscal constraints, DIRCO was engaging National Treasury for an alternative funding mechanism for the project. DIRCO was also considering a Public Private Partnership (PPP) as private sector funding could assist in the construction, maintenance and operations of the facility.

Mr Shope clarified that the host agreement between the South African Government and the African Union regarding the Pan African Parliament (PAP) had not expired. The host country agreement was still valid. All that needed to be relooked at was the annexures attached to the agreement. The services being given to the PAP had not been affected. He did concede that the PAP had faced challenges with its Information Communication Technology (ICT). A challenge encountered by DIRCO was that the PAP wished to be negotiated with and not via the African Union as had been done. He pointed out that the President of the PAP had complained about the state of the offices, residences and vehicles of the PAP. The President also wished to have his own police escort. The host country agreement did cater for VIP protection. A further issue was expenditure incurred by the President of the PAP. He travelled abroad a great deal and DIRCO had to place a limit on it. There had been cases of theft taking place at the PAP even though the South African Police Service (SAPS) was required to search all vehicles going in and out of the precinct. Apparently the searches had not been done. SA needed to have a rethink on how it dealt with organisations like the PAP. There was also a clash between the President of the PAP and a clerk who was a South African.

Mr Mokgalapa noted that the essence of the issue with SA hosting the PAP was for SA to protect its dignity. He asked for timeframes on when construction was to start. What surety did the Committee have that the permanent facility would be provided to the PAP? He understood the challenges that DIRCO faced in working with the Department of Public Works (DPW). He asked who was responsible for moving the process forward. Had new land been identified with no Environmental Impact Assessment (EIA) issues attached to it? He asked if the timeframes that DIRCO was speaking of were realistic given the complexities of intergovernmental relations within the three spheres of government.

Mr Ramashau referring to the working relationship with the DPW said that the approach was to look at the entire package of hosting the PAP. The property to house the PAP was the property of the South African government.

Mr A Shaik Emam (NFP) asked what the estimated cost of the construction project was. What were the benefits to SA? Who would be responsible for security and maintenance of the facility? Was it SA or the PAP’s responsibility?

Mr Ramashau said that the estimated cost for the PAP building was just over an R1bn. DIRCO wished to have a blueprint approach on how to maintain the properties. On security, DIRCO had dedicated SAPS teams which provided assistance. Engagement on security would be reinforced by DIRCO.

Mr Maila was glad that the host agreement had not expired. He was concerned about the delay in the building of the PAP facility since 2004. Once again a lease agreement had been signed for a temporary building to house the PAP. Was the Committee going to see the lease running its course without the facility being completed? The concern was that the lease amount was exorbitant.

Mr Ramashau pointed out that the lease agreement did have a clause which allowed the termination of the lease after three years in the event that the PAP constructed building was complete.

Ms Maxon agreed that the delay since 2004 was unacceptable. Once again a lease was being renewed which was costing a huge amount of money. She asked which members of the public had been the stumbling block in the initial EIA on the project. She asked why South Africans were not really employed by the PAP. A balance was needed when one looked at the issues.

Mr Ramashau said that the delays were also a concern to DIRCO. DIRCO had repositioned its directorate to give the issue greater priority. There was now a specialised directorate.

Ms T Kenye (ANC) also expressed concern that the project had been delayed since 2004. She asked if the land was the same land that had been identified in 2008. She noted that the Committee had requested a report on the African Peer Review Mechanism (APRM) which was still not yet forthcoming from DIRCO. The timeframes given by DIRCO was a grey area. When was the construction to start? She asked what the host country agreement said about what positions the host country should hold in the PAP. Why were South Africans only holding clerk positions?

Mr Shope agreed that there should be South Africans in senior positions within the PAP.

Ms Raphuti said that there seemed to be a great deal of confusion about the land that was to be used for the project. What was the public’s participation? The delay since 2004 had resulted in there being fruitless expenditure up until the present. The leasing costs were far too high. The demands of the PAP President should be obtained in writing and forwarded to the Committee. What was the PAP building going to cost SA?

Mr Mpumlwana asked if there was nothing in the host country agreement which spoke about the percentage of local South Africans that should be employed by the PAP. He was concerned that security provided at the PAP was not necessarily going to be provided by SA, since the PAP wished to have its own security.

Mr Ramashau said that the percentage of locally recruited staff for the PAP had not been defined in the host country agreement. There was a need to reinforce it.

Mr Radebe agreed that the leasing costs were too high. The PAP building should be built by 2020. He was concerned about Public Private Partnerships (PPPs) in relation to the project. There was much state land in Johannesburg and Pretoria. Why was Midrand only being considered? He confirmed that the ICT of the PAP was in a poor state. He felt that someone at DIRCO had been sleeping on the job.

Mr Ramashau replied that engagement had taken place with stakeholders such as the DPW and the City of Tswane on the location of the PAP. DIRCO was working directly with the PPP Unit within National Treasury.

Ms C Dudley (ACDP) asked what had happened to the plans of nine years ago to build a new parliament which would include premises for the PAP. Why not go back to that?

The Chairperson felt that the PAP needed to be close to the airport, close to the Gautrain and had to have accessible good roads. It did not mean that the PAP had to be in Midrand. There were many positives and spinoffs for SA in hosting the PAP. Security needed to be discussed between DIRCO, State Security and SAPS. The result of the discussion needed to be communicated to the President of PAP. He pointed out that no country would allow a foreign owned security company to handle security.

Mr Shope agreed that the security issue needed to be discussed with the AU and should be incorporated into the host country agreement. He noted that the President of the PAP did have a VIP escort. The President of the PAP had fired his local driver and had hired a foreign driver.

Ms D Mosala, Committee Content Adviser, informed members that the previous site considered for the PAP precinct had been a wetland. She suggested that the Committee undertake an oversight visit to the temporary premises of the PAP.

The Chairperson stated that the Committee could not hold DIRCO solely accountable for the delay. Government was a signatory to the host agreement. The matter could still be discussed and the Committee could be provided with an update in three to six months' time.

Mr Mokgalapa suggested that the Committee make it a standard item on the Committee’s agenda for DIRCO to brief the Committee on progress with PAP building construction. Would every six months be practical?

The Chairperson was reluctant to take the suggested approach. The construction project was a government wide matter and not only the responsibility of DIRCO. DIRCO should rather consult with other stakeholders and report back to the Committee.

Mr Radebe agreed that DIRCO could report back to the Committee regularly.

Recent visit of President Omar al-Bashir from Sudan
Mr Mokgalapa referred to the recent International Criminal Court (ICC) issue which had played itself out in SA and suggested that the Minister brief the Committee over the issue. Light could be shed on what happened and what government’s stance on the matter was.

Mr Maila responded that if an investigation into the matter was ongoing then nobody should be asked to appear before the Committee to discuss the matter. He noted that there was an AU resolution that African countries seemed to be a target of the ICC.

The Chairperson asked whether the Committee agreed to the proposal of Mr Mokgalapa.

Mr Mpumlwana did have a problem with summoning the Minister. There was a separation of powers that had to be considered. The Minister could not be summoned for every issue that came up.

Mr Radebe stated that parliament was tasked with having oversight over the Executive. The Committee could not pre-empt an ongoing investigation. He suggested that Deputy Minister Landers be requested to brief the Committee on the ICC itself and not on the matter under investigation.

The Chairperson agreed to Mr Radebe’s suggestion.

Ms Raphuti and Ms Kenye also agreed to it.

Ms Dudley noted that the House would be debating the matter within the next few days and it would seem as if the Committee would not have a chance to discuss the matter beforehand.

The Chairperson said that Minister Landers would be requested to brief the Committee about the ICC on Wednesday, 24 June 2015. The briefing should speak to the attitude and stance of SA towards the ICC. SA was also a signatory to the Rome Statute. Clarity should also be provided on what the view of the SA Government was on President Omar al-Bashir of Sudan attending the recent AU Summit held in SA.

The meeting was adjourned.