Immigration Regulations: IMC progress report; South African Tourism Review Report: Minister of Tourism briefing

Meeting report

Review of SA Tourism

The Minister of Tourism, Mr Derek Hanekom, briefed the Committee on the SA Tourism (SAT) Review Report. In support was Mr Victor Tharage, Director General: National Department of Tourism (NDT).

There had been a need for an external review of SAT. The Review Panel had been appointed in February 2015 and had submitted its report in June 2015. The report had been discussed with the SAT Board. The Committee was provided with a synopsis of the Review. The scope of the Review covered SAT’s mandate, the strategy and performance of SAT, governance and the organisational structure of SAT, stakeholder relations and the role of SAT in relation to other entities responsible for tourism and/or tourism-related functions across the value chain. Some key findings and responses were:

Mandate of SAT

One of the findings by the Review Panel was that there needed to be a clear distinction between the roles and responsibilities of SAT and the NDT. The possibility existed that there could be an overlap of work. Minister Hanekom had accepted the finding and the SAT Board said that the mandates and working relationship of SAT and the NDT needed to be clarified.

International Marketing

The Review Panel found that there was a need for an innovative and fresh international marketing approach. It also said that SAT needed a strategic partner for the hosting of SAT trade shows, like the Tourism Indaba. Mr Tharage said that the NDT had already identified players who could be a possible partner for SAT. The SAT Board had requested such information from the NDT. Minister Hanekom had accepted both findings. The SAT Board had agreed with the findings. Innovation at SAT would be based on fresh insights to be generated through new market insights. The SAT Board had said that SAT would be sourcing a private sector partner for the Tourism Indaba.

Domestic Tourism

The conclusion had been reached by the Review Panel that domestic tourism should remain a core mandate of SAT, albeit exercised in partnership with national, provincial and local role players. It was also recommended that the domestic tourism strategy should be strengthened and that the strategy should take advantage of new markets, such as the black middle class. Minister Hanekom had accepted the findings and the SAT Board had said that the domestic tourism strategy was being reviewed and that a domestic think tank was being convened. Everyone agreed that domestic tourism needed to be affordable to South Africans.

Tourism Grading Council of SA (TGCSA)

The Review Panel had recommended that the TGCSA be removed from SAT’s operations as it was not well aligned to the organisation. It had been suggested that the TGCSA be moved to the South African Bureau of Standards (SABS) or the NDT and if not, it should be independent. Minister Hanekom had disagreed with the Review Panel and felt that the TGCSA should remain with SAT where it was supported by an institutional architecture. There was no negative impact that the TGCSA was having on SAT. Relocating the TGCSA would only deflect funds and effort from where it was more needed. The SAT Board had accepted the Minister’s stance, but had urged for greater clarity to avoid confusion and/or industry concern.

SA National Conventions Bureau (SANCB)

The recommendation of the Review Panel was that the business case for SANCB’s existence, and the motivation for the use of state resources for subvention funding, needed to be strengthened. Self-funding mechanisms had to be considered with the maturation of the SANCB and the business events industry. Minister Hanekom had accepted the recommendation and agreed that a level of self-funding should be explored in the long term, but as yet it was not a viable option. The SAT Board had agreed to assist management to relook at the case for a bid fund to make a more compelling case. International best practice saw subvention funds being funded from the fiscus, and self-funding was considered inappropriate.

Institutional positioning and partnerships

The Review Panel stated that SAT needed to be underpinned by a partnership between government and industry. SAT needed to work in a manner that was fundamentally collaborative. Minister Hanekom had accepted the Review Panel’s findings and said that an accessible, flexible, engaging institution was necessary to support tourism, focussing on collaborative destination marketing and development. The SAT Board had pointed out that SAT was preparing a detailed and comprehensive stakeholder engagement plan to include a new Memorandum of Understanding with the TBCSA, improved strategic alignment with the provinces and cities, as well as improved engagement with BrandSA and key cultural and natural heritage management agencies.

Strategy, analytics and market intelligence

The finding by the Review Panel was that research had to be positioned at the heart of strategic planning, including through reviewing the Tourism Growth Strategy. Minister Hanekom had agreed that excellent research must underpin decision making. Mr Tharage explained that what the Review Panel was saying was that there should be a move away from traditional data sets, which spoke to the number of tourists coming into SA. Other data sets should be looked at as well. For example, the Kruger National Park had its own database. Part of the issue was that if the data was available, it had to be decided to which markets it should be disseminated -- China, India and Germany etc. The SAT Board had agreed with the Review Panel’s findings and was reviewing the research function at SAT, and would present a revised strategy and function. Links with the NDT’s research function would also be explored and optimised.

Organisational structure and human resource development

The Review Panel had recommended that the SAT Board needed to ensure that top management was “fit” for its purpose. Minister Hanekom had accepted the recommendation and agreed that significant work was required to improve the levels of cooperation and engagement across SAT. The SAT Board’s response had been that many interventions were being undertaken to address leadership strengths and shortcomings, including issues like management style, communication to staff, and engaging with the media and stakeholders. Performance plans would reflect these elements too.

Budget and Finance

A recommendation had been made by the Review Panel that SAT needed to strengthen its business case for investment in marketing, and consistently had to make the economic argument for budget allocations. A review of the budget should be undertaken to include a range of important operational and management dimensions. A realignment of the budget should, among other things, focus on reducing overheads, increasing marketing expenditure and increasing the research budget. Minister Hanekom had accepted the recommendation. The SAT Board would review the business case of tourism to ensure that it was more coherent. In addition, the budget review and realignment would be taken into consideration in preparation of the next strategic plan.

Governance

The Review Panel had found that SAT’s corporate governance policy and code of conduct for Board members had to be updated, based on King III and the new protocol with the NDT. The new governance protocol between SAT and the NDT had to be urgently finalised. Minister Hanekom had accepted the findings and said that a new and more representative SAT Board was in place. The SAT Board had agreed with the findings and would review the format of the annual performance review of Board committees and look at benchmarking and best practice. The Review Panel had also suggested that SAT should introduce staff satisfaction and stakeholder satisfaction measures into its organisational performance management, and targets needed to be monitored by the Board. Minister Hanekom and the SAT Board had accepted the suggestion.

National Department of Tourism

The Review Panel had said that the primary role of the NDT should be to position tourism as a key economic sector and to unblock obstacles to tourism growth. The NDT should look at cutting back on its other focus areas and staffing levels, and rather focus on legislation, regulation and policy. A departmental review should consider how to refocus the Department for greater effectiveness. Minister Hanekom had agreed that the NDT’s primary role was to champion tourism and to unblock obstacles, but he felt that the NDT had a role beyond legislation, regulation and policy, which included inter alia skills development support, domestic tourism development and responsible tourism programmes, like the Expanded Public Works Programmes (EPWP). The Review Panel had also added that for SAT there needed to be a structured relationship of accountability, which should be complemented by a collaborative approach to working together. The SAT Board had agreed that the respective roles and responsibilities needed to be clarified and incorporated into the governance framework.

Minister Hanekom said that the Review Panel had made comprehensive recommendations which would allow the SAT to work more effectively. SAT had done some good work, but it could do even better. The environment was ever changing and one had to stay ahead of the game. Over the past six months there had been a decline in tourism numbers, which meant that a great deal of work lay ahead.

Discussion

Mr J Vos (DA) welcomed the Minister’s unpacking of the SAT review and the rationale that was behind it. He asked what could be learnt from it. He was glad that the review had been done externally. Total professionalism had been required. A review allowed for internal re-alignment, as the environment was ever changing. A review furthermore had to take stock of what tourism products were out there in SA. It should consider how to market the products, and to whom and how. There were different types of tourism out there, such as health, business, leisure and sports. SAT needed to do more destination marketing. The role of the Minister and the NDT should be more on product development. At present, there were shortcomings in product development. Much of the good work in the tourism sector was private sector driven. He noted that the Minister had stated at the Tourism Indaba that an international partner was to come on board. What was the purpose of bringing an international partner on board? Having one brand was extremely important. Taking stock of products was therefore important in order to keep abreast of changing trends. The problem was that different products were marketed by different agencies in the same region. There was a great deal of work that the NDT needed to do to repair SA’s internal brand.

It took years and millions of rands to build a brand. He asked what plans would be put in place to rebuild SA’s brand. A strong campaign was needed.

Minister Hanekom responded that taking stock of tourism products was part of the marketing approach of SAT. Niche areas were focussed on. Greater study and research needed to be done on expanding niche areas in tourism. For example, health tourism was taking off. More and more foreigners were coming to SA to have medical procedures done. Whether it was cosmetic or required medical procedures, it was all to the benefit of SA. Persons who even came to play golf in SA needed to be identified. Hence the message that SA put out needed to be ever changing. It was in SA’s favour that the country had so many things to offer. It needed to package its variety.

On the Tourism Indaba, the feedback received had been that when hosting a trade show it had to be done well and the right buyers needed to be attracted. The need for an international partner had been identified in the SAT Review. The Review Panel had felt that SAT focused too much on the Indaba. An international partner would bring in a host of experience, networks and expertise. The process had gone out to tender. The international partner would have an interest in bringing buyers to SA and for the Indaba to be a success. It was felt that SAT was too operationally absorbed by the Indaba.

On having one brand, the issue was that Brand SA and SAT did different branding. The question to ask was whether SA’s message was resonating. Did the message speak to the people? SAT on the one hand did branding, and on the other side had marketing efforts. The issue was primarily about getting international travellers to SA. There needed to be a geographic spread. SA needed to use its magnets, like Table Mountain etc, to attract people. Minister Hanekom said that he had been part of the discussion on country branding versus destination branding. SA needed to use whatever it had that was tempting to attract people. SA’s culture and heritage was also rich and should be attractive to international travellers. A coming together of minds was required to overcome the challenge of a lack of coherence in branding.

Ms S Xego-Sovita (ANC) was pleased that Mr Vallie Moosa, who had been a past Minister on Tourism, had sat on the panel that had done the review on SAT. She pointed out that the findings of the panel were not too different from what the Committee had discussed in meetings. It was therefore not difficult for the Committee to agree to the recommendations made by the panel. She was also pleased that the SAT Board had been restructured. Persons with the required expertise were now sitting on the Board. Board members were also now being remunerated whereas in the past, sitting on the board was voluntary. She was glad that everyone was on board to market SA with one message.

Minister Hanekom, on the payment of the new SAT Board members, said that when it had been voluntary it had excluded persons who could not afford to do it voluntarily. In this way, perhaps valuable people had been lost.

Mr S Bekwa (ANC) asked what the stance of the Minister on the Tourism Grading Council of SA (TGCSA) was.

Ms E Masehela (ANC) welcomed the inputs made on domestic tourism, as it was very important. A strategy was needed on how to deal with the ring-fenced funds that had been allocated to domestic tourism. She pointed out that many establishments like hotels and restaurants used illegal immigrants, as they were a cheap source of labour. How did the NDT intend to address the issue?

Minister Hanekom said that SAT should be at the centre of domestic tourism. He said there were many marketing centres in provinces and cities. The issue of domestic tourism was not only about the strategy, but also about the details. He would be glad to provide the Committee with details on how the ring-fenced funds were spent. The ring-fenced funds amount was considered neither small nor large. He pointed out that non-South Africans were being employed all over SA. They were employed everywhere as gardeners and domestic workers, for example. The issue was about a migration policy, which was not the domain of tourism. The NDT did intend to invest more funds in the training and skilling of South Africans. There were programmes in place, but they were a bit fragmented.

Mr G Krumbock (DA) said that it seemed as if the TGCSA was in a period of flux. Nobody knew where it should be located. When the TGCSA had appeared before the Committee, it had been clear that the manner in which it had been set up was not the best for SA. The whole point of having the TGCSA and grading was to ensure quality assurance. With grading being voluntary and being disincentive, not many establishments wished to be graded. Grading should be made compulsory and should be free. The cost of grading should be picked up by the NDT. He asked the Minister where grading was heading, and why the TGCSA should be located with SAT.

Minister Hanekom reacted that the question was not about the TGCSA being part of SAT, but rather about shared services. There were three options for the TGCSA. They could be located with SAT, in some other organisation or they could stand alone. If they were to stand on their own, then a huge amount of funding was needed. Placing them with another institution was also not easy. He did point out that SAT viewed the TGCSA as being complementary to its organisation. The Review Panel had suggested that the appointment of a Chief Assurance Officer for TGCSA should be held in abeyance. On grading, the TGCSA had been tasked to come up with a more comprehensive policy concept. The issues it had to consider amongst others was why grading was needed, and how was it affected by TripAdvisor. Whether grading should be free or subsidised needed to be considered carefully. A strong case had been made for full-time paid assessors. Assessors also needed to be well trained. The assessor should also play an advisory role. The basket of benefits to establishments was also very important. The integrity of the system should be ensured. Government must use graded establishments. There needed to be real value. The TGCSA should come up with a draft policy framework. The current Tourism Act had anomalies. One of them was that it stated that the Minister must appoint a TGCSA.   

Ms Xego-Sovita agreed with the Minister that domestic tourism was not the sole responsibility of SAT. She asked who was at the centre to coordinate activities.

The Chairperson referred to the different types of tourism like sports, business and health, and asked whether there was closer collaboration by SAT with other government departments. What work was being done on marine/sea tourism? She asked whether a Conventions Fund would be established by National Treasury for the SANCB. She also asked if a legislative review of the TGCSA would be considered. A survey was needed in terms of which provinces could assist the SAT with its branding work. Were the jobs that illegal immigrants were doing part of the jobs that had been created by the NDT?

Minister Hanekom said that the Compensation Fund for the SANCB was budgeted for. However, there needed to be contributions beyond what the state was paying for. It was a matter to be dealt with down the line. The SANCB played an important role in bringing conferences to SA. He had had discussions with the Minister of Economic Development, Mr Ebrahim Patel, regarding infrastructure for coastal/sea tourism. Infrastructure did not fall within the realm of tourism. Road access to sites was important. He was open to the idea that the issue could find its way into the Presidential Infrastructure Coordinating Commission. The oceans/sea economy was there. There were undeveloped areas around SA’s coast, like the West Coast. There was a partnership with the Wildlife Environment Society of SA (WESSA) in place. The idea was to maintain SA’s beaches’ blue flag status. They should be kept clean and safe.

Mr Tharage said that the SANCB bids against other countries to get conferences to be held in SA. It cost money to host conferences, but the revenue from them made it worthwhile. Research had been done on how best to establish the Compensation Fund.

Immigration Inter-Ministerial Committee (IMC) outcomes

Minister Hanekom provided the Committee with insight into the IMC’s outcomes on the immigration regulations. Short term measures would be effective from November 2015 to January 2016. Where an application was made in person to countries where no South African missions existed, the Department of Home Affairs (DHA) would accept applications for visitor and medical visas sent by post. Biometrics and photos of travellers would be captured on arrival at ports of entry. The DHA would also implement biometrics (fingerprints and photos) at ports of entry. Pilot sites would be opened up at OR Tambo Airport, King Shaka Airport and Cape Town International Airport.

There had been the introduction of an Accredited Tourism Company (ATC) programme for countries like China, India and Russia, with its possible extension to other visa-requiring countries. There would additionally be continued issuing of long-term Multiple Entry Visas to frequent travellers that would be valid for a period exceeding three months, but not exceeding three years.

In the medium term, from within three months to one year, where applications were made in person the DHA would increase Visa Facilitation Centres (VFCs) in countries like China, India, UK, Nigeria, DRC, Angola, Ghana, Kenya and Uganda. The DHA would fast-track the opening of VFCs in Zimbabwe, the United Arab Emirates (UAE) and Botswana.

Long term measures beyond one year, where applications were made in person, were that the DHA would install systems for pre-flight checks (including operation centres) at international airports, upgrade Advance Passenger Processing (APP) systems, implement a Passenger Name Record (PNR) to enhance risk assessment, and also finalise the automation of the visa and permitting system.

On child travel requirements for South African children travelling out of SA -- outbound travel -- the IMC had accepted the implementation of the current child travel requirements, including the parental consent affidavits, as these sought to protect children. On child travel requirements for foreign children coming into SA -- inbound travel -- for visa-requiring countries, the provision of original birth certificates or certified copies of required documents would continue during the visa application process. This was in line with the practice in many other countries. For children from visa-exempt countries, travellers would be strongly advised to bring along proof of the relationship and consent from the absent parent/s or guardian/s. This was required by the USA, UK and Canada. Child travel requirement measures within three months were relevant, for example, where a South African school soccer team wished to travel abroad. School principals would issue letters confirming the permission for children to travel on school tours. This authority would also be extended to include registered sports bodies. Validity of the Parental Consent Affidavits would be extended to a period of no longer than six months. It applied to visa requiring countries. The validity period at present was three months. Child travel requirement measures implemented within three months to one year by the DHA was to change the term ‘Unabridged Birth Certificate’ to ‘Birth Certificate containing parental details’. Details of parents would be printed in South African passports. Parents whose particulars were printed would not be required to carry birth certificates.

In general, the DHA was to also consider the introduction of visas on arrival for nationals of visa-requiring countries which held valid visas for the UK, the US and Canada -- and other countries with stringent visa requirements. Other administrative issues affecting relevant departments would be resolved through inter-departmental engagements. The DHA should facilitate legal instruments to implement the recommendations. This required amendments to immigration regulations. Relevant departments had to engage their relevant stakeholders to present the approved recommendations. Cabinet had extended the life of the IMC to deal with issues that may arise whilst implementing the Cabinet decision.

Discussion

The Chairperson said that the changes to the immigration regulations needed to be communicated to people in languages that people understood.

Mr Vos said that Minister Hanekom had initially supported the immigration regulations, but it had come about that the regulations did not bode well for tourism. He was pleased that a middle ground had been found. He was a bit disappointed that a great deal of time had been wasted in the interim. The tourism sector did not have the luxury of time. The real work now had to begin. The regulations needed to be communicated abroad and this would take time and money. The regulations had already done much damage and damage control had to be done in haste.

He pointed out that the DHA had referred to incorrect figures. The Director General of the DHA had said that 30 000 children were trafficked. He pointed out that the South African Police Services (SAPS) and other agencies had said that the real figure was a fraction of 30 000. He did feel that even if the figure was lower, it was still way too much. He asked why economic and regulatory assessments of the regulations had not been done. He noted that the Minister of Home Affairs, Mr Malusi Gigaba, had done a review of the regulations but had excluded tourism stakeholders.

The effect of the immigration regulations had been felt throughout the tourism industry. Hotel bookings, airline ticket sales and international arrival figures were all down. He asked what steps had been put in place to have SAT’s offices, SA’s ambassadors and its missions explain that SA’s regulations had been amended. He noted that one of the biggest Chinese tour groups, called Walk Through Africa Tours, had stopped its marketing of SA. A concerted effort was needed, and the DHA alone was not up to the task.

He asked what the turnaround times for the vetting of abridged birth certificates were. Many people used technology today to do bookings and did not necessarily use tour operators. How could the DHA even consider accepting applications by post? Snail mail was far too slow and unacceptable. The envisaged building of visa facilitation centres in countries like India was quite a challenge. How did the Ministers in the IMC envisage building the centres within one year without placing a burden on the taxpayer? He emphasised that in the end, the best solution was e-visas. He had researched e-visas thoroughly. Why could the benefits of e-visas not be explored? Evidence had shown that tourism had increased in countries which had e-visas, such as Turkey. The immigration regulations had caused SA to lose a huge amount of revenue. It was private sector and government revenue that had been lost. The Minister of Finance would agree that any loss of revenue for SA was bad.

Minister Hanekom responded that he would like to see the evidence which showed that he had said the visa regulations were good. He had understood the rationale behind the intention of having the visa regulations. The reality was that the visa regulations were having a negative effect on tourism. Sometimes there were competing mandates by government departments. It was not always intentional. It was not unique only to SA. He agreed that he would have liked the matter to have been concluded earlier. Thankfully it was now sorted out. The real work had to begin in earnest. Tourism numbers had been negatively affected. The NDT had done a study to show the negative impact of the visa regulations. It was difficult to treat it as an exact science.

The manual vetting of an unabridged birth certificate was no longer a requirement for countries not requiring visas. It was now a matter of getting the matter across and to communicate it far and wide. The Committee would be kept abreast of progress. Regulations would be amended to reflect the current changes. The law had to be changed. There was no need for an amendment bill. The process would not take long. It would be done speedily. Countries like Australia did postal applications, in person applications and it offered e-visas. Applications could be done via accredited travel agents as well. The Turkish model would be looked at. Many countries had a combination of application types.

The visa facilitation centres were not to be built for tourism purposes. It was relevant to the DHA. The changes to the visa regulations needed to be communicated by whatever means. A clear succinct message was needed. It had to be done in haste by missions and other government officials abroad. It was correct that tourism needed to regain lost ground. SA had to be marketed aggressively to regain the confidence of the world. He said that tourism figures for July 2015 were 17% up compared to figures for July 2014. There had to be an upward trajectory.

Ms Xego-Sovita appreciated the intervention of President Zuma to form the IMC to resolve the visa regulation issue. Cabinet had approved the recommendations of the IMC. The visa regulations were the responsibility of the DHA. She suggested that Minister Hanekom protect tourism interests, but not at the expense of the security of SA. She was pleased that the life of the IMC had been extended. The Committee needed to be updated of any progress.

Minister Hanekom was also pleased that the life of the IMC had been extended. Continued monitoring was required.  

The Chairperson said that the Committee, in its Budgetary Review Recommendations Report (BRRR), had recommended that Minister Hanekom do an impact study of the unintended consequences of the visa regulations. There were so many illegal persons entering SA, what was going to be done about the issue? It was perhaps more an issue that should be dealt with by the DHA.

Minister Hanekom did not wish to comment on the matter of illegal persons coming into SA.

The meeting was adjourned.